Exploring the carbon emission reduction effects of corporate climate risk disclosure: Evidence from the Chinese A-share listed enterprises

Abstract

This study reexamines the need for Chinese enterprises to disclose climate risk information in the context of their significant contribution to climate change. The paper proposes climate risk disclosure indicators based on a sample of Chinese A-share listed companies from 2010 to 2020 and their annual reports. It explores the relationship and influencing mechanism between corporate climate risk disclosure and carbon emissions levels. The results of empirical research show that disclosing climate risk information reduces carbon emissions levels, and this mitigating effect is significantly enhanced by the moderating effects of executive environmental experience, investor attention, and government environmental supervision. Heterogeneity analysis further indicates that state-owned enterprises, those with a solid corporate green culture, or industries with high pollution emissions can better exert the carbon emission reduction effect of climate risk disclosure. In addition, physical climate risk disclosure is preferred in terms of short-term carbon emissions. In contrast, transformational climate risk disclosure is selected for long-term carbon reduction goals. Finally, empirical economic analysis indicates that high-quality climate risk disclosure can appropriately mitigate the negative impact of corporate carbon emissions on solvency and profitability compared to firms with lower disclosure levels, highlighting the importance of climate risk disclosure quality.