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The impacts of climate change risks on financial performance of mining industry: Evidence from listed companies in China

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  • Sun, Yongping
  • Yang, Ying
  • Huang, Nan
  • Zou, Xin

Abstract

The mining industry is susceptible to climate change risks since it has the characteristics of high exposure, high sensitivity and high substitution. Firstly, this paper reviews the impact mechanism of climate change risks on corporate financial performance from direct and indirect channels. Secondly, this paper employs the unique data, climate risk indicator with 5 types of climate risks, to analyze the effect of climate change risks on the China's mineral listed companies. The empirical analysis shows that there is a correlation between climate change and financial performance of mining companies. The mining companies with different types of resource have different sensitivities to climate change risks. The climate change risks have both positive and negative effects on the financial performance of mining companies. In respond to the climate change risks, mining companies should actively implement low-carbon strategies and proactively disclose emission information to improve the brand value and create new competitive advantages for long-term development.

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  • Sun, Yongping & Yang, Ying & Huang, Nan & Zou, Xin, 2020. "The impacts of climate change risks on financial performance of mining industry: Evidence from listed companies in China," Resources Policy, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:jrpoli:v:69:y:2020:i:c:s0301420720308606
    DOI: 10.1016/j.resourpol.2020.101828
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    Cited by:

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    7. Bag, Surajit & Rahman, Muhammad Sabbir & Srivastava, Gautam & Chan, Hau-Ling & Bryde, David J., 2022. "The role of big data and predictive analytics in developing a resilient supply chain network in the South African mining industry against extreme weather events," International Journal of Production Economics, Elsevier, vol. 251(C).
    8. Ren, Yi-Shuai & Boubaker, Sabri & Liu, Pei-Zhi & Weber, Olaf, 2023. "How does carbon regulatory policy affect debt financing costs? Empirical evidence from China," The Quarterly Review of Economics and Finance, Elsevier, vol. 90(C), pages 77-90.
    9. Ren, Xiaohang & Li, Jingyao & He, Feng & Lucey, Brian, 2023. "Impact of climate policy uncertainty on traditional energy and green markets: Evidence from time-varying granger tests," Renewable and Sustainable Energy Reviews, Elsevier, vol. 173(C).
    10. Xiaojun Chu & Nianrong Sui, 2023. "Does Weather-Related Disaster Affect the Financing Costs of Enterprises? Evidence from Chinese Listed Companies in the Mining Industry," Sustainability, MDPI, vol. 15(2), pages 1-14, January.
    11. Dutta, Anupam & Bouri, Elie & Noor, Md Hasib, 2021. "Climate bond, stock, gold, and oil markets: Dynamic correlations and hedging analyses during the COVID-19 outbreak," Resources Policy, Elsevier, vol. 74(C).
    12. Douglas A. Adu & Naheed N. Roni, 2024. "Bank climate change initiatives, ownership structures, and corporate governance mechanisms: Evidence from emerging economies," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 3039-3077, May.
    13. Pinto-Gutiérrez, Cristian A., 2023. "Drought risk and the cost of debt in the mining industry," Resources Policy, Elsevier, vol. 83(C).
    14. Xin Zhang & Mateng Zhang & Zhong Fang, 2023. "Impact of Climate Risk on the Financial Performance and Financial Policies of Enterprises," Sustainability, MDPI, vol. 15(20), pages 1-24, October.
    15. Rahat, Birjees & Nguyen, Pascal, 2023. "Does ESG performance impact credit portfolios? Evidence from lending to mineral resource firms in emerging markets," Resources Policy, Elsevier, vol. 85(PB).
    16. Alexandre Rafael Barbosa Castilho & Simone Ruchdi Barakat, 2022. "The relationship between climate change mitigation strategies and the financial performance of Brazilian companies," Journal of Industrial Ecology, Yale University, vol. 26(4), pages 1294-1305, August.
    17. Minfeng Yu & Yi Si & Gaoliang Tian & Lei Zhang, 2023. "Climate risk and audit fees: An international study," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(5), pages 4989-5025, December.
    18. Magdalena Zioło & Iwona Bąk & Anna Spoz, 2023. "Incorporating ESG Risk in Companies’ Business Models: State of Research and Energy Sector Case Studies," Energies, MDPI, vol. 16(4), pages 1-25, February.
    19. Ding, Xin & Chourou, Lamia & Ben-Amar, Walid, 2024. "Carbon emissions and audit fees: Evidence from emerging markets," Emerging Markets Review, Elsevier, vol. 60(C).
    20. Ma, Qianting & Zhou, Yueshu & Wang, Jiaji, 2024. "The impact of climate change on credit risk of rural financial institutions: A threshold effect based on agricultural insurance," The North American Journal of Economics and Finance, Elsevier, vol. 71(C).
    21. Sun, Xiaojun & Lei, Yalin, 2021. "Research on financial early warning of mining listed companies based on BP neural network model," Resources Policy, Elsevier, vol. 73(C).
    22. Banerjee, Ameet Kumar & Özer, Zeynep Sueda & Rahman, Molla Ramizur & Sensoy, Ahmet, 2024. "How does the time-varying dynamics of spillover between clean and brown energy ETFs change with the intervention of climate risk and climate policy uncertainty?," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 442-468.
    23. Salamatu J. Tannor & Christian Borgemeister & Shalom D. Addo–Danso & Klaus Greve & Bernhard Tischbein, 2023. "Climate variability and mining sustainability: exploring operations’ perspectives on local effects and the willingness to adapt in Ghana," SN Business & Economics, Springer, vol. 3(8), pages 1-26, August.

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