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Beyond awareness: How investor-initiated communications reduce corporate carbon emissions

Author

Listed:
  • Luo, Zijun
  • Li, Mingyang
  • Hu, Xueqin
  • Xu, Hao

Abstract

Existing studies have paid much attention to the determinants and consequences of climate risk, yet they lack evidence on actual and certain measures of environmental performance at the firm level. Employing firm-level carbon emissions data from Trucost, this paper finds that investor-initiated communications effectively reduce corporate carbon emissions by emphasizing environmental protection concepts, promoting digital transformation, and fostering green innovation. Different characteristics of investor inquiries, including communication sentiment and environmental-related word frequency, are positively related to carbon emissions reduction. The impact of investor-initiated communications is stronger for firms in heavily polluting industries or cities, and those with stronger corporate governance, better financial conditions, or heightened investor attention. The findings underscore the importance of fostering constructive investor–firm communications to incentivize green practices and accelerate the transition towards a low-carbon economy in China and beyond.

Suggested Citation

  • Luo, Zijun & Li, Mingyang & Hu, Xueqin & Xu, Hao, 2025. "Beyond awareness: How investor-initiated communications reduce corporate carbon emissions," Economic Modelling, Elsevier, vol. 152(C).
    • Handle: RePEc:eee:ecmode:v:152:y:2025:i:c:s0264999325002597
    DOI: 10.1016/j.econmod.2025.107264
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    Keywords

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    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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