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The Effect of Government Regulation in China on the Relationship between Carbon Risk Awareness and Corporate Performance

Author

Listed:
  • Khalid ALSAKEB

    (Accounting Department, Business College, King Khalid University, Abha, Saudi Arabia)

  • Ali AHMADI

    (Higher Institute of Business Administration of Gafsa, University of Gafsa, Avenue Houcine Ben Kaddour, Sidi Ahmed Zarrouk, 2112 Gafsa, Tunisia)

  • Tijani AMARA

    (Higher Institute of Business Administration of Gafsa, University of Gafsa, Avenue Houcine Ben Kaddour, Sidi Ahmed Zarrouk, 2112 Gafsa, Tunisia)

  • Ahamed ABDULLAHQ

    (Accounting Department, Administrative and Economic College, Shabwah University, Ataq, Yemen)

Abstract

In a sustainable economy, each company’s level of carbon risk can change from period to period, but few studies have examined the association among a company’s carbon risk awareness and its level of environmental, social, and governance (ESG) performance. This article studies the effect of corporate-level carbon risk awareness on the ESG performance of China’s A-share listed companies during the period of 2013–2022. The results show a positive effect of carbon risk awareness on the level of companies’ ESG performance. The results also show that media coverage has a significant moderating effect on the relationship between carbon risk awareness and ESG performance. The authors present three factors through which carbon risk awareness affects ESG performance: (i) recognizing high carbon risks allows companies to decrease pollutants and greenhouse gas (GHG) emissions and increase environmental (E) scores; (ii) high carbon risk awareness encourages companies to take responsibility for social employment and improve social (S) outcomes; (iii) higher carbon risk awareness leads to better established sustainable management and higher governance (G) scores. This study plays a significant guiding role in improving corporate ESG practices.

Suggested Citation

  • Khalid ALSAKEB & Ali AHMADI & Tijani AMARA & Ahamed ABDULLAHQ, 2024. "The Effect of Government Regulation in China on the Relationship between Carbon Risk Awareness and Corporate Performance," Chinese Journal of Urban and Environmental Studies (CJUES), World Scientific Publishing Co. Pte. Ltd., vol. 12(04), pages 1-21, December.
    • Handle: RePEc:wsi:cjuesx:v:12:y:2024:i:04:n:s2345748124500222
    DOI: 10.1142/S2345748124500222
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