Abstract
In a sustainable economy, each firm perceives different levels of carbon risk, but there are few studies on the relationship between a firm’s carbon risk perception and Environmental, Social, and Governance (ESG) performance. This paper examines the impact of firm-level carbon risk perception on ESG performance using Chinese A-share listed firms during 2011–2020. We find a positive relationship between firm-level perception of carbon risk and firm ESG performance. Further analysis shows that analyst coverage and media attention exert a substantial moderating effect on the link between carbon risk perception and ESG performance. We identify three channels through which carbon risk perception affects ESG performance. First, rising carbon risk perception enables firms to take measures to reduce pollutants and greenhouse gas emissions and increases environmental (E) scores. Second, this perception encourages firms to take responsibility for social employment and increases social (S) scores. Finally, it improves firm sustainable governance and further increases governance (G) scores. Our research has an important guiding role in promoting firm ESG practice.
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www.cninfo.com.cn
Work Plan for Controlling Greenhouse Gas Emissions for the 14th Five-Year Plan, Work Plan for Controlling Greenhouse Gas Emissions for the 13th Five-Year Plan, Notice on Issuing and Distributing the National Plan for Co** with Climate Change (2014–2020), Measures for the Administration of Carbon Emission Trading (for Trial Implementation), Interim Measures for the Administration of Low-carbon Product Certification
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We are grateful for research support from the Bei**g Social Science Foundation (no. 23JCC110).
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BG contributed to the study design. BG conducted all data processing, analyses, and initial drafting. BG and ZY contributed to the interpretation of the results. BG and ZY were involved in the study supervision. All authors contributed in drafting the manuscript and revision. All authors read and approved the final manuscript.
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Guo, B., Yang, Z. Firm-level carbon risk perception and ESG performance. Environ Sci Pollut Res 31, 12543–12560 (2024). https://doi.org/10.1007/s11356-024-31863-8
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DOI: https://doi.org/10.1007/s11356-024-31863-8