<p>ESG rating divergence is a reflection of the different approaches taken by different agencies to assess a company's ESG effectiveness, which could influence the stock market's precise valuations and pricing efficiency. This article tested the aforementioned effects using Chinese A-listed firms. Our research indicates that ESG rating divergence significantly increases stock market mispricing. The mechanism is that investor disagreement and investor emotional fluctuations are made worse by ESG rating divergence, hence increasing stock market mispricing. Further analysis suggests that ESG rating divergence causes the company's stock to be undervalued. Cross-sectional data demonstrates that the impact of ESG rating divergence on stock market mispricing is particularly noticeable when listed firms have significant financing constraints, large analyst earnings forecast deviations, and low levels of free float shares. Our study provides empirical proof that ESG rating divergence leads to stock market mispricing and supports the idea of the "noise effect".</p>