The Effect of Government Regulation in China on the Relationship between Carbon Risk Awareness and Corporate Performance

Khalid Alsakeb (), Ali Ahmadi, Tijani Amara () and Ahamed Abdullahq ()
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Khalid Alsakeb: Accounting Department, Business College, King Khalid University, Abha, Saudi Arabia
Ali Ahmadi: Higher Institute of Business Administration of Gafsa, University of Gafsa, Avenue Houcine Ben Kaddour, Sidi Ahmed Zarrouk, 2112 Gafsa, Tunisia
Tijani Amara: Higher Institute of Business Administration of Gafsa, University of Gafsa, Avenue Houcine Ben Kaddour, Sidi Ahmed Zarrouk, 2112 Gafsa, Tunisia
Ahamed Abdullahq: Accounting Department, Administrative and Economic College, Shabwah University, Ataq, Yemen

Chinese Journal of Urban and Environmental Studies (CJUES), 2024, vol. 12, issue 04, 1-21

Abstract: In a sustainable economy, each company’s level of carbon risk can change from period to period, but few studies have examined the association among a company’s carbon risk awareness and its level of environmental, social, and governance (ESG) performance. This article studies the effect of corporate-level carbon risk awareness on the ESG performance of China’s A-share listed companies during the period of 2013–2022. The results show a positive effect of carbon risk awareness on the level of companies’ ESG performance. The results also show that media coverage has a significant moderating effect on the relationship between carbon risk awareness and ESG performance. The authors present three factors through which carbon risk awareness affects ESG performance: (i) recognizing high carbon risks allows companies to decrease pollutants and greenhouse gas (GHG) emissions and increase environmental (E) scores; (ii) high carbon risk awareness encourages companies to take responsibility for social employment and improve social (S) outcomes; (iii) higher carbon risk awareness leads to better established sustainable management and higher governance (G) scores. This study plays a significant guiding role in improving corporate ESG practices.

Keywords: Carbon risk awareness; performance; ESG; China (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S2345748124500222

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