The signals of green governance on mitigation of climate change – evidence from Chinese firms

Abstract

Purpose– This paper aims to examines whether Chinese firms’ signals of green governance, including environmental management, green innovation, and greenhouse gas (GHG) and pollution emission, vary significantly with their ownership structure and aim of being environmentally sensitive.Design/methodology/approach– From corporate social responsibility (CSR)-China website and CNINFO, a total of 781 CSR reports released during 2008-2010 were collected. The collected data were coded and analyzed using content analysis.Findings– In overall disclosure of environmental protection information (TotalEP), no significant difference existed between state-owned enterprises (SOEs) and privately owned enterprises (POEs). Chinese environmentally sensitive industries (ESIs) have a tendency to disclose significantly more information about their actions of environmental protection than their counterparts. Moreover, SOEs and ESIs scored higher than their counterparts on energy saving and carbon reduction and development of circular economy. A steady increase was also observed in the disclosure ratio for CO2emission. During 2008-2010, SOEs and ESIs were relatively more committed to the disclosure of SO2emission as compared to other emission items.Practical implications– Managers should disclose signals of green governance actively to avoid adverse selection caused by information asymmetry which further lower their financing cost.Originality/value– There is still a lack of evidence as to whether Chinese firms are implementing actions to slow down climate change. This paper endeavours to provide an insight into Chinese firms’ compliance with the green governance requirements of the Eleventh Five-Year Plan. The study hopes to fill the current gap in understanding the environmental behaviours of Chinese firms under pressure to alleviate climate change.