Can green finance reduce corporate carbon risk?

•Green finance significantly reduces carbon risk for Chinese A-share manufacturing companies.•Adopting green finance not only eases financial constraints but also lowers carbon risk, ultimately enhancing firm value.•Green finance in promoting sustainable practices and addressing carbon risks for cor...

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Bibliographic Details
Published in:Finance research letters Vol. 63; p. 105234
Main Authors: Zhong, Tingyong, Ma, Fuqi, Sun, Fangcheng, Li, Jiangna
Format: Journal Article
Language:English
Published: Elsevier Inc 01.05.2024
Subjects:
Carbon risk
Enterprise value
Financing constraints
Green finance
Q56
Green finance
P18
Financing constraints
G32
L60
Carbon risk
Enterprise value
ISSN:1544-6123, 1544-6131
Online Access:Get full text
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Summary:•Green finance significantly reduces carbon risk for Chinese A-share manufacturing companies.•Adopting green finance not only eases financial constraints but also lowers carbon risk, ultimately enhancing firm value.•Green finance in promoting sustainable practices and addressing carbon risks for corporations. This study analyzes data from Chinese A-share market-listed manufacturing companies between 2009 and 2021. Our results underscore the effectiveness of green finance in mitigating corporate carbon risk, supported by robustness tests. Risk reduction is particularly pronounced for firms under stringent environmental regulations and those receiving greater media attention. Our findings indicate that green finance alleviates financial constraints, reduces carbon risk, and boosts firm value. This study deepens the understanding of the interplay between green finance and corporate carbon risk, offering valuable insights for companies aiming to reduce emissions, sustain economic performance, and manage carbon-related risks effectively.
ISSN:1544-6123
1544-6131
DOI:10.1016/j.frl.2024.105234