Industry-level climate policy risk exposure and corporate ESG performance

Chentong Sun, Chu Pan and Nuo Xu

Finance Research Letters, 2025, vol. 81, issue C

Abstract: This study employs a time-varying parameter regression with stochastic volatility (TVP-SV) model to creatively measure climate policy risk exposure at the industry level across 31 industrial sectors in China. The results indicate that climate policy risk exposure exhibits dynamic changes and heterogeneity across industries. Using 2009–2023 data from A-share listed companies, we also examined corporate ESG responses to climate policy risk exposure, revealing that increases in exposure significantly enhance ESG performance, with stronger effects observed in the central and western regions and among low-tech, heavily polluting firms.

Keywords: Climate policy risk exposure; Industry level; The TVP-SV Model; ESG Performance (search for similar items in EconPapers)
JEL-codes: G12 Q54 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325008013

DOI: 10.1016/j.frl.2025.107542

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