Carbon Information Disclosure Research Articles

Ecological risk management: Effects of carbon risk on firm innovation investment

We investigate the impact of carbon risk on firms' innovation investments. Using a two-way fixed-effects panel regression with a panel dataset of Chinese listed firms for 2018–2021, we find that carbon risk inhibits firms' innovation investments. We also confirm the U-shaped relationship between carbon risk and innovation investment over the long term. We further reveal the conditioning roles of financial constraints, new investments, and carbon information disclosure at the firm level. Additionally, we find that firms' environmental awareness alleviates the impact of carbon risk on innovation investment. The results of this study have implications for firm managers, encouraging them to integrate carbon risk considerations when making the decision to promote firm innovation.

Carbon Disclosure and Common Ownership

The crossholding of multiple firms by major shareholders in the same industry is known as common ownership. In this article, we examine how common ownership affects the carbon-related disclosure practices of cross-held firms. We report that common ownership decreases a firm’s propensity to disclose carbon information as well as the quality of such disclosures. A one standard deviation increase in measures of common ownership decreases the likelihood of participating in the Carbon Disclosure Project (CDP) survey by as much as 19.4%. Our results are robust to exogenous events, such as changes in common ownership and robustness tests, including Heckman two-stage regression and the exclusion of the financial sector. Further analyses demonstrate that the negative impact of common ownership on carbon disclosures is stronger in carbon-intensive sectors than in other sectors and for hard than for soft disclosures.

Corporate Social Responsibility, Carbon Information Disclosure, and Enterprise Value: A Study of Listed Companies in China’s Highly Polluting Industries

In 2022, China actively carried out economic transformation and sought high-quality development. To date, enhancing enterprise value is still one of the top priorities for enterprises. Enterprises should take various measures to continuously enhance their value in order to strive for their survival and development. The fulfillment of social responsibilities not only brings benefits to all stakeholders, but also establishes a good corporate image in front of the public and can increase enterprise value. At the same time, in the context of “carbon peaking and carbon neutrality”, carbon information disclosure has an important impact on enterprises and their stakeholders. Taking the data of listed companies within China’s Shanghai and Shenzhen A-share highly polluting industries from 2018 to 2022 as samples, this paper studies the relationship between the level of social responsibility fulfillment, carbon information disclosure, and enterprise value, and makes an empirical analysis. This research finds that social responsibility has a significant positive impact on enterprise value; carbon information disclosure has a significant positive impact on enterprise value; and carbon information disclosure plays a significant positive regulating role in the relationship between social responsibility and enterprise value. Finally, according to the research results, this paper puts forward relevant suggestions from two perspectives: enterprise and government.

Evaluation index system for carbon information disclosure quality in China's electric power sector based on a mutual information and back propagation neural network model

This paper employs the Mutual Information (MI) and Back Propagation (BP) neural network model to screen the preliminarily constructed evaluation index system for carbon information disclosure (CID) quality of public companies in China's electric power sector (EPS), which is subsequently incorporated into the fuzzy comprehensive evaluation (FCE) method for evaluation application. The results show that (1) after screening, 19 out of the 31 preliminarily constructed indicators constitute an optimal index set, and (2) the evaluation application of the screened index system validates the feasibility and applicability of the index system. Simultaneously, the evaluation results reveal a generally low CID quality in the EPS.

The influence of disclosing product lifecycle carbon footprint information on consumer purchase intentions based on the APE model perspective: An ERP and questionnaire study

BackgroundCarbon emissions are increasingly becoming the primary cause of climate change, and carbon information disclosure can affect consumer purchase intentions. However, existing studies only focus on the disclosure of carbon information for a single lifecycle stage, gnoring consumers' overall perception process. MethodsThis study uses scenario experiments and event-related potential experiments in combination, based on the associative-propositional evaluation (APE) model, to explore the differences in the impact of disclosing product information with high carbon emissions in different lifecycle stages (production stage, use stage, recycling stage) on consumers' purchase intentions. ResultsThe questionnaire results found that consumers' willingness to purchase products with high carbon emissions in the use stage was the lowest; The behavioral results found that the purchase rate of products with high carbon emissions in the recycling stage was the lowest; The brain electricity results found that products with high carbon emissions in the use stage induced the largest P2 component; Products with high carbon emissions in the recycling stage induced the largest N2 component. ConclusionThe attitudes of evaluation with proposition dominance among consumers tend to attribute carbon emissions in the use stage to their own behavioral choices. The attitudes of evaluation with association dominance among consumers reflect the cognitive conflicts existing in consumers' understanding of carbon emission information during recycling. This study expands the perspective of researching the disclosure effects of product carbon footprints and provides references for corporate marketing strategies and policy formulation.

Study on the Game of Carbon Disclosure under the Perspective of Philosophy of Science and Technology

The society gradually pays attention to carbon information disclosure, and it is very important for human beings to pay attention to carbon information disclosure and the formulation of a series of regulations in their actions on climate issues, but some enterprise subjects ignore carbon emissions and falsely disclose carbon information based on the principle of profit maximization, which leads to the difficulty of solving environmental problems. From the perspective of philosophy of science and technology, this paper tries to study the game strategy and information asymmetry among enterprises in different situations by taking information asymmetry as an entry point through game theory and Bayes' theorem, further analyze the negative impacts of false disclosure of enterprises and the chaos caused by the tragedy of the commons, etc., and analyze and interpret them through the theory of environmental justice and environmental ethics, and finally analyze and interpret them from the aspects of reducing information asymmetry. Finally, we summarize and reflect on the aspects of reducing information asymmetry, introducing environmental system and formulating industry norms.

The impact of green finance on corporate carbon disclosure: Financial regulation as a moderator

The transparency of corporate carbon information has become a key topic in today's context of increasing attention to global climate change issues. Based on the data of A-share listed companies from 2013 to 2021, this study explores the relationship between green finance, financial regulation and corporate carbon information disclosure. The study shows that: (1) Green finance can promote corporate carbon disclosure. (2) Financial regulation plays a positive moderating role between green finance and corporate carbon information disclosure. (3) The heterogeneity test reveals that green finance plays a stronger role in corporate carbon information disclosure among state-owned enterprises (SOEs) compared to non-SOEs.

Green credit policy and enterprise carbon performance: evidence from China

ABSTRACT Exploring enterprise carbon performance (ECP) via green capital allocation is important for achieving the dual carbon goal. In this article, the impact of the green credit policy (GCP) on ECP is empirically examined using a difference-in-differences model. The results show that GCP significantly improves ECP, and this conclusion remains valid after a series of robustness tests. Low-carbon technology and carbon information disclosure are central transmission mechanisms that are positively adjusted by green consumption, environmental regulation, and marketisation degree. Furthermore, state-owned and declining enterprises are affected more strongly by GCP than non-state-owned, growing, and mature enterprises. The impact of GCP on ECP increases over the enterprise life cycle.

Carbon information disclosure as a driving force for corporate digital transformation: a textual analysis from China

Carbon information disclosure as a driving force for corporate digital transformation: a textual analysis from China

Impact of carbon disclosure on debt financing costs

Creditors, such as banks, often use disclosed environmental information to assess a company’s environmental risk and ensure the safety of debt funds. Consequently, carbon disclosures have become an important consideration for creditors when making investments. This study explores the relationship between carbon disclosure and debt financing costs using data on listed companies from 2008 to 2019. The results show that carbon disclosure can reduce the debt financing costs of enterprises, and that this influence is more significant for private companies than for state-owned enterprises. Instrumental variables and Propensity Score Matching (PSM) were used to evaluate the robustness of negative relationships. Furthermore, carbon disclosure has a more significant impact on debt costs with less environmental supervision pressure, weak residents’ environmental awareness, and weak product market competition. These findings provide guidance for companies’ carbon information disclosure and support the establishment of official carbon disclosure standards.

The impact mechanism of carbon emission reduction performance on financial performance based on carbon neutral targets: Evidence from Chinese energy enterprises

Purpose: Low-carbon and green technologies are crucial for achieving industrial structure upgrades and significant leaps forward in the development of energy enterprises. Therefore, this paper examines the correlation between carbon emission reduction and financial performance in energy firms.
 Design/Methodology/Approach: A two-way fixed-effects model is developed using data from 33 Chinese energy-listed companies between 2015 and 2020.
 Findings: The benchmark regression results show that improving a company's carbon emission reduction performance leads to better financial performance. Moreover, assuming corporate responsibility for reducing emissions can boost companies' reputations and foster better relationships with stakeholders. The trustworthiness of the standard regression outcome is validated through alternative independent variables, reducing time frames, and incorporating previously omitted factors. The results of heterogeneity analyses show that reducing carbon emissions has the same effect on financial performance across all regional characteristics and equity subgroups. Furthermore, the internal transmission mechanism analysis reveals that female leadership positively moderates the effect, while financing constraints negatively moderate the relationship between carbon emission reduction performance and financial performance.
 Conclusion: Under the national green development strategy of achieving carbon neutrality and carbon peaking, the carbon information disclosure system should be improved by the government; enterprises should implement innovative methods for low-carbon economic management and operation; and regulators should establish effective green regulations, incentives, and constraints. This paper offers a comprehensive guide for energy companies and their stakeholders to reduce carbon emissions, thereby achieving sustainability.

Carbon Information Disclosure Quality and Corporate Financial Performance-Based on Empirical Data from the Electricity and Heat Production and Supply Industry

Carbon Information Disclosure Quality and Corporate Financial Performance-Based on Empirical Data from the Electricity and Heat Production and Supply Industry

A carbon information disclosure perspective on carbon premium: Evidence from China

This study advances the role of the characteristics of the signal environments, in particular carbon concerns and signaling costs, to explain variation in the carbon premium. Empirical evidence indicates that proactive carbon information disclosure acts as a positive market signal and can enhance stock returns, with disclosure quality further augmenting the carbon premium. While investor confidence serves as a mediating factor, the influence of debt financing costs remains constrained. Signal environments will moderate the carbon premium: in regions and industries with high carbon concerns, the carbon premium is strengthened significantly. Concurrently, smaller firms and those engaging in voluntary disclosure, characterized by elevated signaling costs, also have a higher carbon premium. Our research unravels the dynamics of the carbon premium through the lens of carbon information disclosure, offering invaluable insights for investor decision-making and managerial corporate governance.

The mediating role of green investment in political connection and carbon information disclosure: Empirical evidence in emerging stock market

The mediating role of green investment in political connection and carbon information disclosure: Empirical evidence in emerging stock market

Time dynamics in the effect of carbon information disclosure on corporate value

It is crucial to examine whether carbon information disclosure (CID) can truly enhance corporate value (CV), which motivates companies to reduce carbon emissions endogenously. Given that the dynamic impact of CID on CV evolves over time, this paper continuously investigates this time-varying relationship within the functional framework. Based on the continuous curves smoothed from 65 companies in the Shanghai Stock Exchange Social Responsibility Index, we construct an evaluation index using functional entropy weight to continuously measure the level of CID. Furthermore, to quantify the time-varying effect of CID on CV, we use functional regression to visualize its dynamics in symbol, strength, and statistical significance from 2009 to 2021. Finally, the real-time moderating effects of nature of ownership and industry attributes are also examined, revealing how the impact of CID on CV varies across different companies and periods. The results suggest the following: (1) CID adversely affected CV initially but favored later. (2) The initial negative impact and the subsequent positive impact of CID on CV are stronger in non-state-owned companies than in state-owned companies. (3) These impacts are also stronger in low-polluting companies than in high-polluting companies. In summary, this paper expands the research toolset for exploring the dynamic effect of CID on CV and offers practical implications for companies to make informed disclosure decisions.

How do the designs of emission trading system affect the value of covered firms—A quasi-natural experiment based on China

Under the effective cost constraint, the emission trading system (ETS) can put pressure on the covered firms to cut emissions through reasonable system designs. Under the ETS with different system designs, firms face different cost constraints. Therefore, how ETS designs affect the value of covered firms is important to evaluate the effectiveness of ETS. Based on the Chinese A-share listed firms from 2010 to 2019, this paper employs DID, Mediation-DID, and Moderated Mediation Methods to investigate the influence of system designs of seven pilot ETSs on the value of covered firms. The main findings are as follows. First, in general, the value of covered firms is improved by the implementation of pilot ETSs. Compared with free allowances, paid allowances have a stronger promotion effect on firm value, in which the technology innovation plays a positive mediation role. Second, from the perspective of free allowances, the benchmarking method can promote firm value more effectively than the historical method, through the paths of technology innovation and carbon information disclosure (CID). Third, the increase of carbon price level and its stability can promote firm value. Specifically, the carbon price level only promotes firm value through CID, while the carbon price stability promotes firm value through technology innovation and weakens firm value through CID. Moreover, for firms owned by the State or in high‑carbon industries, the value improvement effect of ETS is more significant.

Climate-related corporate reporting and cost of equity capital

Purpose This study aims to examine the reaction of stakeholders (i.e. capital providers) to climate-related corporate reporting. Climate-related corporate reporting is captured by the level of voluntary carbon disclosure, while the recognition and appreciation of capital providers are captured through the cost of equity capital (COE). Design/methodology/approach This study uses a sample including the 350 largest companies by market capitalization on the London Stock Exchange, UK (FTSE350) from 2015 to 2019. The authors use fixed-effects regression models to examine the effect of climate-related corporate reporting on the COE. Findings This study finds that voluntary carbon disclosure proxied by carbon disclosure score is negatively associated with COE. This suggests that firms’ superior quality disclosure of carbon information could contribute to a lower COE. This implies that the market and stakeholders positively appreciate the involvement in climate-related reporting by businesses. Originality/value The finding provides insights to regulators, investors and other stakeholders in terms of the positive economic implication of actively engaging in reducing climate change impact through voluntary carbon disclosure. These findings also motivate corporates to be proactively involved in climate-related reporting by extending the quality of carbon information disclosure.

Effect of carbon information disclosure with consistent evaluation standards: An empirical study about carbon efficiency label in Huzhou China

Company carbon information disclosure (CID) has attracted increased attention in the context of global climate change and CO2 emissions reduction. Existing CID projects have seldom included consistent carbon information evaluation standards for assessing companies’ carbon performance, causing uncertainty in their effects on CO2 emissions reduction. A sharp regression discontinuity design is developed in this study, and the effects and mechanism of the carbon efficiency label (CEL) are investigated as the first CID project with consistent evaluation standards in China. Semi-structured interviews are conducted with managers of 19 companies to interpret the empirical results. We find that the CEL substantially reduced CO2 emissions from high-carbon-intensity companies of heavily regulated industries, such as the cement and chemical fiber industries. This result suggests that the CEL may address the problem of “whipping the fast and hardworking” in industrial-level environmental regulations. The reason is that the consistent evaluation standards of the CEL enable the accurate assessment of companies’ carbon information, preventing asymmetric information between government and companies. Additionally, the CEL’s deterrent effect is an important mechanism for CO2 emissions reduction. An essential factor affecting the CEL’s deterrent effect is the desire of companies to maintain dispositional legitimacy for administrative approval of energy and environmental assessments.

Impact of carbon information disclosure on corporate financing constraints: Evidence from the Carbon Disclosure Project

With peak carbon dioxide emissions and a carbon-neutral background, the initiative of enterprises to disclose information voluntarily is insufficient, this study attempts to study the impact of carbon information disclosure on financing constraints to encourage companies’ carbon information disclosure. Previous literature usually uses a binary variable to measure whether an enterprise participates in Carbon Disclosure Project (CDP), and rarely study the impact of carbon information disclosure on economic consequences by acquiring all CDP levels manually. And most of these theories are mostly based on developed countries. Based on the whole sample of 1293 Chinese listed companies participating in the CDP from 2016 to 2020, this study employed the oversampling technology to end unbalanced CDP data, then an ordinary least squares (OLS) regression to account for time-invariant industry heterogeneity and time trends is employed. The empirical results indicate that the higher the CDP level, the smaller the financing constraints of enterprises. Moreover, the channel analysis indicates that carbon information disclosure is alleviating financing constraints by reducing information asymmetry and enhancing corporate reputation. This study bridges the gap in existing research on alleviating corporate financing constraints through the emerging CDP, which also presents the detailed implications for companies and policy makers.JEL Classification:G14; G20; M14; Q51

Prospects for the transformation and development of carbon storage in abandoned mines of coal enterprises from the perspective of carbon neutrality

Under the carbon neutrality goal, coal enterprises must seek breakthroughs from abandoned mines, develop new resources in the new era, turn problems into countermeasures, and participate in the carbon emissions market, for contributing to the accomplishment of the national strategic goal of carbon neutrality. To this end, we investigated the relevant national policies and regulations to clarify the boundaries disclosed by the carbon information of enterprises, understood the development direction of carbon storage in abandoned mines, and clarified the transformation and development of carbon storage in abandoned mines. We made a few suggestions: (1) China should learn from its past experience and other countries to develop the energy industry with Chinese characteristics and reform the economic system. (2) Coal enterprises must actively respond to the national carbon information disclosure policy, clarify their own responsibilities and carbon emission boundaries. (3) It is necessary to proactively obtain advanced knowledge and plan carbon storage pathways for abandoned mines. (4) Development problems of coal enterprises should be deduced using cases. The ‘dual carbon’ goals should be achieved steadily step-by-step. (5) Three measures, i.e. improving the existing resource structure, coordinating the information of abandoned mines, and promoting the cultivation of scientific and technological talents.