The impact of emission trading schemes and government pressure on corporate climate change disclosure in China

Abstract

With the various impacts of global warming and climate change on businesses, corporate climate change disclosure has become a highly prominent topic in recent years, drawing significant attention from various sectors of society. In emerging economies experiencing rapid economic growth, such as China, climate change disclosure holds significant relevance for businesses in presenting their sustainability efforts to their stakeholders and society. Therefore, it is necessary to investigate the key factors propelling climate change disclosure. This study focuses on listed companies in the pilot regions of China's Emissions Trading Scheme (CN-ETS) to explore the influence of external factors on disclosure performance. The difference-in-differences approach is conducted to examine the impact of ETS policy implementation on corporate climate change disclosure. The results indicate that ETS does have a certain level of effect on disclosure performance. Additionally, the influence is more significant for companies facing higher government pressure. Our findings provide several policy implications for the future development of climate management and corporate climate change disclosure practices in China and other emerging economies.