Does environmental regulation affect corporate environmental awareness? A quasi-natural experiment based on low-carbon city pilot policy

The low-carbon city pilot (LCCP) policy, as an important measure for China to achieve its "dual carbon" goals, has attracted widespread attention regarding its implementation effects. However, no studies have yet focused on the impact of the LCCP policy on corporate environmental awareness. This study, based on data from Chinese A-share listed companies from 2007 to 2020, employs a triple difference model to evaluate the impact of the LCCP policy on corporate environmental awareness, filling the aforementioned gap in the literature. The results indicate that the LCCP policy can significantly enhance corporate environmental awareness, particularly in non-state-owned enterprises, enterprises in the growth stage, and those located in the eastern regions. The LCCP policy will compel corporations to enhance their environmental awareness by increasing the costs of environmental penalty and environmental governance. However, the analysis of economic consequences reveals that although corporate environmental awareness has improved, it has not directly translated into significant economic benefits or substantial environmental benefits. This may be indicative of a scenario where, in the short term, the cost effect of the LCCP policy outweighs the compensation effect. Nevertheless, the improvement in the quality of information disclosure can significantly mitigate these adverse economic consequences. This research not only enriches the academic outcomes related to environmental regulatory policies but also contributes to ensuring the effective achievement of green, low-carbon objective and the sustainable development of the economy and society.