External governance monitoring and corporate behavior : impact of negative media coverage pressure on ESG rating divergence

From a global warming perspective, an enterprise's environmental, social, and governance (ESG) performance and disclosure have received significant attention from external stakeholders, e.g., green investors. Based on agenda-setting theory, this study empirically explores how negative media coverage pressure influences ESG rating divergence in China. The empirical findings suggest that negative media coverage pressure increases ESG rating divergence-these outcomes remain valid after a series of robustness and additional tests. The mediating effects of the outcomes show that negative media coverage pressure increases ESG rating divergence by exacerbating external attention tracking. Furthermore, the impact of negative media coverage pressure on ESG rating divergence is more pronounced in enterprises with low institutional investor shareholding, non-state-owned firms, corporations with low reputations, and firms with low audit quality. In sum, this study offers insight into how negative media coverage pressure influences ESG rating divergence and presents practical recommendations for corporations to improve the information disclosure framework.