Will environmental information disclosure affect bank credit decisions and corporate debt financing costs? Evidence from China’s heavily polluting industries

Du, Mo; Chai, Shanglei; Wei, Wei; Wang, Shuqi; Li, Zhilong

doi:10.1007/s11356-022-19229-4

Cited by 29 publications

(18 citation statements)

References 39 publications

(27 reference statements)

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“…This finding is in line with previous studies that have reported a stronger relationship between environmental initiatives and carbon emissions for firms in polluting industries (Haque and Ntim, 2022). This suggests that firms in polluting industries have a higher carbon footprint and thus face greater regulatory pressure and public scrutiny to reduce their carbon emissions (Du et al , 2022). This may lead them to adopt more aggressive carbon reduction initiatives than firms in non-polluting industries.…”

Section: Resultsmentioning

confidence: 99%

From words to action: unpacking the real impact of sustainability initiatives on carbon emissions reduction

Issa,

In'airat

2023

SRJ

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Purpose The purpose of this study is to analyze the correlation between a company’s efforts to reduce carbon emissions and its actual carbon performance. Additionally, the study investigates how female decision-makers may influence this relationship as moderators. Design/methodology/approach This study uses a data set consisting of 1,258 observations from companies listed on the STOXX Europe 600 index between 2009 and 2021. The study applies the ordinary least squares technique to investigate the connection between carbon reduction initiatives and actual carbon performance, taking into account the potential impact of board and executive gender diversity. To ensure the reliability of the findings, subsample analysis and a two-step generalized method of moments technique were used. Findings The results show a significant negative association between a firm’s commitment to environmental initiatives and its carbon emission intensity. Furthermore, the study explores the moderating effect of board and executive gender diversity on this relationship and finds that gender diversity has a significant negative impact on the relationship between emissions reduction initiatives and carbon emissions. Practical implications The study has practical implications for corporate sustainability efforts. It highlights the importance of implementing carbon reduction initiatives to effectively mitigate carbon emissions. This emphasizes the need for sustainable business strategies that prioritize environmental initiatives. Additionally, the study underscores the positive impact of gender diversity in leadership positions on carbon reduction efforts. Policymakers and organizations can leverage these findings to promote gender diversity and enhance sustainability practices. Social implications It provides evidence-based insights for policymakers to develop specific policies and action plans in priority areas such as climate change and emissions reduction. It also highlights the positive influence of gender diversity in corporate leadership on environmental initiatives, promoting inclusivity and equality in sustainability practices. Originality/value This study brings originality by investigating the direct impact of a company’s carbon reduction initiatives on its carbon performance. It also explores the moderating effect of board and executive gender diversity on this relationship. The study provides evidence-based insights for policymakers and applies neo-institutional theory to analyze the interplay between carbon reduction initiatives, carbon emissions and gender diversity in executive and board positions.

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Section: Resultsmentioning

confidence: 99%

From words to action: unpacking the real impact of sustainability initiatives on carbon emissions reduction

Issa,

In'airat

2023

SRJ

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“…The implementation of GCP has a negative impact on the financial performance of commercial banks, which may reduce the criteria for granting green credit. Furthermore, green credit policy (GCP) not only strengthens corporate financial constraints, but also reduces investment efficiency and the scale of debt financing, causing policy performance to be offset by corporate losses, resulting in insignificant long-term policy effects [ 55 , 56 ].…”

Section: Resultsmentioning

confidence: 99%

The Impact Mechanism of Green Credit Policy on the Sustainability Performance of Heavily Polluting Enterprises—Based on the Perspectives of Technological Innovation Level and Credit Resource Allocation

Ding¹,

Jing

et al. 2022

IJERPH

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Green credit policy (GCP), as one of the key financial instruments to achieve ’carbon peaking’ and ‘carbon neutrality’ targets, provides capital support for the green development of enterprises. This paper explores the impact mechanism of GCP on the sustainability performance of heavily polluting enterprises (HPEs) from the perspectives of technological innovation level (TIL) and credit resource allocation (CRA), using panel data for Chinese A-share listed manufacturing companies from 2010 to 2015 to construct a propensity score matching and differences-in-differences (PSM-DID) model. We find that GCP has a causal effect on corporate sustainability performance (CSP). Although GCP significantly improves CSP, there is no long-term effect. Heterogeneity analysis shows that the relationship between GCP and CSP is only significant in non-state-owned enterprises and in eastern and low-market-concentration enterprises. Mechanism tests indicate that GCP stimulates HPEs to invest more in technological innovation and thereby improves CSP through the innovation compensation effect; the credit constraint and information transfer effects caused by GCP reduce the credit resources available to HPEs but have a significant forced effect on CSP. This paper enriches the study of the economic consequences of GCP and provides implications for stakeholders to improve the green financial system and achieve green transformation of HPEs.

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“…As the main creators of environmental problems, firms in heavily polluting industries will pay more attention to the disclosure of environmental information (Du et al, 2022). Confucian culture makes people pay more attention to environmental issues, and the heavily polluting firms receive more attention and supervision from the public.…”

Section: The Influence Of Industrial Attributementioning

confidence: 99%

“…Confucian culture makes people pay more attention to environmental issues, and the heavily polluting firms receive more attention and supervision from the public. The environmental disclosure of listed firms in polluting industries is a reference for banks to make credit decisions (Du et al, 2022) and is an important element of environmental verification by national environmental authorities. Compared with non-heavily polluters, firms that do not disclose environmental information on time or disclose less are more likely to be perceived by society as having environmental violations (Nguyen et al, 2021).…”

Section: The Influence Of Industrial Attributementioning

confidence: 99%

The power of culture: Does Confucian culture contribute to corporate environmental information disclosure?

Chao

Wang

et al. 2023

Corp Soc Responsibility Env

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With the intensification of global environmental issues, corporate environmental information disclosure has received increasing attention. Different cultural and policy backgrounds have led to very different styles of corporate environmental information disclosure behavior. Whether Confucianism, the dominant culture that has influenced China for thousands of years, contributes to corporate environmental information disclosure deserves to be studied. Based on data from 3180 Chinese listed firms, this study confirms the positive effect of Confucian culture on environmental information disclosure. Meanwhile, Taoist culture and environmental regulation can positively moderate this effect. In addition, heterogeneity analysis unveils that Confucian culture plays a greater role in corporate environmental information disclosure for state‐owned firms and firms in highly polluting industries, while this role is weakened for firms with a high proportion of female executives and executives with foreign experience. This study links culture and environmental information disclosure, which helps to arouse the attention of whole society to utilize excellent traditional culture and helps the government to formulate effective environmental regulation policies.

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Will environmental information disclosure affect bank credit decisions and corporate debt financing costs? Evidence from China’s heavily polluting industries

Cited by 29 publications

References 39 publications

From words to action: unpacking the real impact of sustainability initiatives on carbon emissions reduction

From words to action: unpacking the real impact of sustainability initiatives on carbon emissions reduction

The Impact Mechanism of Green Credit Policy on the Sustainability Performance of Heavily Polluting Enterprises—Based on the Perspectives of Technological Innovation Level and Credit Resource Allocation

The power of culture: Does Confucian culture contribute to corporate environmental information disclosure?

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