Carbon information disclosure and corporate financial performance—Empirical evidence based on heavily polluting industries in China
Authors: Xu Ailing , Su Yuanyuan , Wang Yingxin , Liao Jia 
Published: January 2025

Global climate change has become one of the most large-scale, widespread, and far-reaching challenges facing mankind. Against this background, China has proposed a "dual-carbon" target in 2020, which greatly demonstrates China’s determination and commitment to carbon emission reduction, and the burden of realizing the "dual-carbon" target is mainly borne by heavy polluters. The burden of achieving the "dual-carbon" goal is mainly borne by the heavily polluting firms. Although this has increased the economic burden of the firms to a certain extent, carbon information disclosure reduces the degree of information asymmetry and also obtains the support of the government, which improves the financial performance of the firms. Based on the data of A-share listed companies in Shanghai and Shenzhen in the heavy pollution industry in 2013–2023, this paper analyzes the relationship between carbon information disclosure, and corporate financial performance according to signaling theory, rent-seeking theory, and sustainable development theory. It is found that enhanced corporate carbon disclosure can significantly improve corporate financial performance, and the main effect is realized through reducing debt financing costs and increasing the proportion of institutional investors’ shareholding. In the heterogeneity analysis, this paper finds that the main effect is more significant in the samples of firms located in the western region and the central region. Based on existing research, this paper deepens the study of the relationship between carbon disclosure and corporate financial performance. By integrating the multiple perspectives of signaling theory, rent-seeking theory and sustainable development theory, this paper systematically analyzes how creditors, institutional investors and other stakeholders play a role in the dynamic interaction between carbon disclosure and corporate financial performance, and reveals the motives and mechanisms behind the behaviors of these stakeholders. In order to further refine the analysis path, this paper constructs an intermediary model in order to deconstruct the deep logic of the path and mechanism through which carbon disclosure indirectly affects corporate financial performance. This model not only enhances the theoretical explanatory power, but also provides a more refined analytical framework for empirical testing, which helps to reveal the “black box” mechanism of carbon disclosure’s impact on corporate financial performance. In addition, in view of China’s vast territory and the uneven level of economic development between regions, this paper adopts a differentiated analysis strategy, based on the economic characteristics of the regions where the heavy polluters are located, and divides the whole sample into three sub-samples for independent regression analysis. This heterogeneity test incorporates inter-regional development differences into the scope of analysis, making the research conclusions more geographically specific and policy-guiding significance. By comparing and analyzing the differences in the impact of carbon disclosure on the financial performance of enterprises in different regions, this paper provides a reference for the government to formulate differentiated carbon disclosure policies in the future, accurately promote the construction of the carbon trading market, and efficiently achieve the carbon emission reduction targets at the national level.