In the current process of economic and social development, ESG principles are receiving increasing attention, and discrepancies in ratings assigned by different rating agencies to listed companies' ESG performance are becoming increasingly common. Are company management teams manipulating the tone of their annual reports to mitigate the negative impact of ESG rating discrepancies? To investigate this question, this study employs a sample of non-financial listed companies on the Shanghai and Shenzhen A-share markets in China. Using relevant panel data from 2015 to 2024, it empirically examines the relationship between ESG rating divergence and annual report tone management. Findings reveal a significant positive correlation between ESG rating divergence and annual report tone management, with corporate reputation and investor sentiment partially mediating this relationship. Heterogeneity tests reveal that ESG rating divergence amplifies the extent of annual report tone management more markedly in firms with poorer internal control quality and lower information transparency. These findings enrich the literature on factors influencing annual report tone management, provide robust support for refining ESG rating standards, and offer actionable recommendations for corporate sustainability and investor decision-making.

Zhang Yuan, Wang Yiman. ESG Rating Divergence and Annual Report Tone Management: Empirical Evidence from Chinese Listed Firms. International Journal of Frontiers in Sociology (2026), Vol. 8, Issue 1: 28-39. https://doi.org/10.25236/IJFS.2026.080104.

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