Research on the Green Investment of Traditional Energy Enterprises and Its Effectiveness Under Environmental Regulation

Using data from 188 traditional energy companies listed on China’s A-share market from 2012 to 2023, this study adopts the double-difference method to assess the changes in the green investment of traditional energy companies before and after the implementation of environmental regulation policies in depth and further explores the actual effects and potential risks of green investment on the green transformation of traditional energy companies. This study shows that the environmental regulation policies significantly increased the green investment of traditional energy enterprises, but this increase did not effectively promote the overall green transformation of the enterprises; rather, they became more focused on meeting the current compliance requirements while ignoring the fundamental green technological innovation and production mode change. Further analysis reveals that, as environmental standards continue to rise, the increasing green investment expenditure of traditional energy companies for meeting the standards will continue to outpace the growth in capital inflows of traditional energy companies, resulting in a threat to the financial soundness of the companies in the short term and a significant increase in financial pressure. In the long run, the lack of sustained and stable external financial support for a long period of time will not only constrain the green transformation process of enterprises but may also pose a serious threat to the survival foundation of enterprises and even lead to the elimination of enterprises in fierce market competition.