Exploring the Paradox of ESG Ratings in Emerging Markets: Insights from the Moroccan Context

This study explores the paradoxical role of ESG ratings in emerging markets, focusing on Morocco, where these tools are simultaneously promoted as signals of credibility and transparency while producing distortions, inconsistencies, and symbolic compliance. Drawing on 31 semi-structured interviews conducted with six categories of stakeholders, including institutional investors (n = 7), CSR/ESG managers from listed companies (n = 8), sustainability consultants and auditors (n = 6), academics and researchers (n = 5), representatives of market institutions (n = 3), and public-sector executives involved in ESG-related regulation (n = 2), the research relies on thematic analysis informed by legitimacy, institutional, and stakeholder theories. The findings reveal three mechanisms underlying the ESG paradox: (1) investors rely on ESG ratings as instruments of risk management and long-term value creation, (2) companies face opaque and sometimes contradictory rating methodologies that are poorly adapted to local institutional realities, and (3) global ESG standards generate pressures for symbolic conformity, increasing the risk of greenwashing and widening the gap between disclosure and actual practices. The study advances ESG research in non-Western contexts by uncovering how institutional voids, fragmented governance frameworks, and power asymmetries shape ESG evaluation dynamics in Morocco. It also underscores the need for locally grounded benchmarks, methodological harmonization, and stronger institutional coordination, including the potential development of a national ESG rating framework. Limitations relate to the qualitative scope, the Moroccan specificity, and potential social desirability bias among interviewees.