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Can green finance reduce corporate carbon risk?

Author

Listed:
  • Zhong, Tingyong
  • Ma, Fuqi
  • Sun, Fangcheng
  • Li, Jiangna

Abstract

This study analyzes data from Chinese A-share market-listed manufacturing companies between 2009 and 2021. Our results underscore the effectiveness of green finance in mitigating corporate carbon risk, supported by robustness tests. Risk reduction is particularly pronounced for firms under stringent environmental regulations and those receiving greater media attention. Our findings indicate that green finance alleviates financial constraints, reduces carbon risk, and boosts firm value. This study deepens the understanding of the interplay between green finance and corporate carbon risk, offering valuable insights for companies aiming to reduce emissions, sustain economic performance, and manage carbon-related risks effectively.

Suggested Citation

  • Zhong, Tingyong & Ma, Fuqi & Sun, Fangcheng & Li, Jiangna, 2024. "Can green finance reduce corporate carbon risk?," Finance Research Letters, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:finlet:v:63:y:2024:i:c:s1544612324002642
    DOI: 10.1016/j.frl.2024.105234
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    More about this item

    Keywords

    Green finance; Carbon risk; Financing constraints; Enterprise value;
    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
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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