CSR Performance and Firm Value: Disentangling the Role of ESG Rating Providers

Albane C. Tarnaud; Mohammed Zakriya

doi:10.1111/1467-8551.12920

CSR Performance and Firm Value: Disentangling the Role of ESG Rating Providers

Albane C. Tarnaud^*
, Mohammed Zakriya

^*Corresponding author for this work

Research output: Indexed journal article › Article › peer-review

4 Citations (Scopus)

Abstract

We study the impact on firm valuation of a novel exogenous shock to environmental, social, and governance (ESG) data that affects how firms’ corporate social responsibility (CSR) gets measured by a third-party ESG data provider. Our analysis reveals a significantly higher sensitivity of firm values to CSR ratings for firms whose CSR ratings were affected by the change in ESG reporting methodology. Moreover, firms with low capital constraints or low institutional ownership tend to drive the value sensitivity of CSR ratings when ESG reporting gets revamped. These findings provide insight into how ESG rating providers could influence and shape firms’ actual CSR engagement.

Original language	English
Pages (from-to)	1553-1577
Number of pages	25
Journal	British Journal of Management
Volume	36
Issue number	4
DOIs	https://doi.org/10.1111/1467-8551.12920
Publication status	Published - Oct 2025
Externally published	Yes

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 12 Responsible Consumption and Production

Keywords

Corporate social-responsibility
Costs
Financial constraints
Governance
Shareholder value

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10.1111/1467-8551.12920

Cite this

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title = "CSR Performance and Firm Value: Disentangling the Role of ESG Rating Providers",

abstract = "We study the impact on firm valuation of a novel exogenous shock to environmental, social, and governance (ESG) data that affects how firms{\textquoteright} corporate social responsibility (CSR) gets measured by a third-party ESG data provider. Our analysis reveals a significantly higher sensitivity of firm values to CSR ratings for firms whose CSR ratings were affected by the change in ESG reporting methodology. Moreover, firms with low capital constraints or low institutional ownership tend to drive the value sensitivity of CSR ratings when ESG reporting gets revamped. These findings provide insight into how ESG rating providers could influence and shape firms{\textquoteright} actual CSR engagement.",

keywords = "Corporate social-responsibility, Costs, Financial constraints, Governance, Shareholder value",

author = "Tarnaud, \{Albane C.\} and Mohammed Zakriya",

note = "Publisher Copyright: {\textcopyright} 2025 British Academy of Management.",

year = "2025",

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doi = "10.1111/1467-8551.12920",

language = "English",

volume = "36",

pages = "1553--1577",

journal = "British Journal of Management",

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T1 - CSR Performance and Firm Value

T2 - Disentangling the Role of ESG Rating Providers

AU - Tarnaud, Albane C.

AU - Zakriya, Mohammed

PY - 2025/10

Y1 - 2025/10

N2 - We study the impact on firm valuation of a novel exogenous shock to environmental, social, and governance (ESG) data that affects how firms’ corporate social responsibility (CSR) gets measured by a third-party ESG data provider. Our analysis reveals a significantly higher sensitivity of firm values to CSR ratings for firms whose CSR ratings were affected by the change in ESG reporting methodology. Moreover, firms with low capital constraints or low institutional ownership tend to drive the value sensitivity of CSR ratings when ESG reporting gets revamped. These findings provide insight into how ESG rating providers could influence and shape firms’ actual CSR engagement.

AB - We study the impact on firm valuation of a novel exogenous shock to environmental, social, and governance (ESG) data that affects how firms’ corporate social responsibility (CSR) gets measured by a third-party ESG data provider. Our analysis reveals a significantly higher sensitivity of firm values to CSR ratings for firms whose CSR ratings were affected by the change in ESG reporting methodology. Moreover, firms with low capital constraints or low institutional ownership tend to drive the value sensitivity of CSR ratings when ESG reporting gets revamped. These findings provide insight into how ESG rating providers could influence and shape firms’ actual CSR engagement.

KW - Corporate social-responsibility

KW - Costs

KW - Financial constraints

KW - Governance

KW - Shareholder value

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DO - 10.1111/1467-8551.12920

M3 - Article

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SP - 1553

EP - 1577

JO - British Journal of Management

JF - British Journal of Management

IS - 4

ER -

CSR Performance and Firm Value: Disentangling the Role of ESG Rating Providers

Abstract

UN SDGs

Keywords

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