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Climate risk and corporate ESG performance: Evidence from China

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  • Yin, Zhujia
  • Deng, Rantian
  • Xia, Jiejin
  • Zhao, Lili

Abstract

This paper has explored whetherand how climate risk affects corporate ESG performance in China. Using the text analysis, we construct a firm-level climate risk index and find that climate risk can promote corporate ESG performance. Empirical evidence demonstrates that financing constraints and social attention are the potential influence channels. Furthermore, the positive relationship is more pronounced for firms with greater regional government attention to climate change, better information disclosure quality, or ahigherasset-liability ratio. Our results shed light on the important role of climate risk in corporate risk management and investor decision-making.

Suggested Citation

  • Yin, Zhujia & Deng, Rantian & Xia, Jiejin & Zhao, Lili, 2024. "Climate risk and corporate ESG performance: Evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:ecofin:v:74:y:2024:i:c:s1062940824001700
    DOI: 10.1016/j.najef.2024.102245
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    More about this item

    Keywords

    Climate risk; ESG; Financing constraints; Social attention;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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