Carbon Disclosure Effect, Corporate Fundamentals, and Net-zero Emission Target: Evidence from China

Xiyuan Zhou, Xinlei Wang, Xiang Fei, Wenxuan Liu, Bai-Chen Xie and Junhua Zhao

Papers from arXiv.org

Abstract: In response to China's national carbon neutrality goals, this study examines how corporate carbon emissions disclosure affects the financial performance of Chinese A-share listed companies. Leveraging artificial intelligence tools, including natural language processing, we analyzed emissions disclosures for 4,336 companies from 2017 to 2022. The research demonstrates that high-quality carbon disclosure positively impacts financial performance with higher stock returns, improved return on equity, increased Tobin's Q ratio, and reduced stock price volatility. Our findings underscore the emerging importance of carbon transparency in financial markets, highlighting how environmental reporting can serve as a strategic mechanism to create corporate value and adapt to climate change.

Date: 2025-08
New Economics Papers: this item is included in nep-cna, nep-ene and nep-env
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