Carbon Neutrality Management and Firm Risk
DOI:
https://doi.org/10.54097/bhkfxz39Keywords:
Carbon neutrality management, firm risk, financing constraints, information asymmetry.Abstract
Under the backdrop of the 'dual carbon' goals, carbon neutrality has become a critical strategy for firms to address climate change and achieve sustainable development, with its impact on corporate risk attracting increasing attention. Using data from Chinese A-share listed companies on the Shanghai and Shenzhen stock exchanges from 2018 to 2022, this paper empirically examines the impact of corporate carbon neutrality management on firm risk and its underlying mechanisms through multiple regression models. The findings reveal that corporate carbon neutrality management significantly reduces firm risk, and this conclusion remains robust across a series of robustness checks, including alternative risk measurement indicators, replacement of the core explanatory variable, and controlling for endogeneity issues. Heterogeneity analysis demonstrates that the risk-reducing effect of carbon neutrality management is more pronounced in firms with lower audit quality and lower institutional investor ownership, suggesting that carbon neutrality management plays a more critical role in signaling and governance in firms characterized by higher information asymmetry and relatively weaker external monitoring. Mechanism analysis indicates that corporate carbon neutrality management reduces firm risk by alleviating financing constraints. Specifically, the positive signals conveyed by carbon neutrality management reduce the degree of information asymmetry, enabling firms to obtain external funding support at lower costs, thereby enhancing resource allocation capabilities, improving operational efficiency, and ultimately reducing firm risk. These results are consistent with the theoretical expectation that carbon neutrality management reduces corporate information asymmetry, mitigates financing constraints, and consequently lowers firm risk. The findings of this paper not only enrich the literature on the economic consequences of carbon neutrality management but also provide important theoretical foundations and practical implications for firms implementing carbon neutrality strategies, enhancing risk management capabilities, and for governments refining green finance policies.
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