Sustainability ratings are vital tools for assessing corporate contributions to sustainable development, yet discrepancies among rating agencies undermine their credibility. This study explores these divergences through the lens of signaling theory, analyzing how companies strategically communicate sustainability efforts via advocacy, adaptation, and innovation signals. Using sustainability reports from German multinationals (2016 and 2021) and fuzzy-set qualitative comparative analysis (fsQCA), we identify signal configurations that lead to positive ratings across different agencies. Our findings reveal that simple, clear signals aligned with institutional norms are more effective than complex or costly ones. While innovation signals were influential in earlier assessments, their impact diminished over time, reflecting evolving stakeholder expectations. Sentiment also plays a nuanced role, influencing some agencies' evaluations but not others. Despite methodological differences, overlaps in evaluation criteria suggest partial standardization among raters. This study challenges the assumption that costlier signals are inherently more credible, emphasizing clarity and congruence as key to reducing information asymmetry. It offers actionable insights for companies to align sustainability communications with institutional expectations and for policymakers to harmonize rating methodologies, ultimately enhancing the utility of sustainability ratings in driving sustainable development goals.
