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How do climate risks affect corporate energy intensity? Evidence from China

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  • Li, Ang
  • Ma, Yuze
  • Li, Bin

Abstract

Climate risks are profoundly affecting corporate decision-making at multiple levels, including economics and energy. This study uses data from Chinese A-share listed companies from 2007 to 2022 to explore whether companies are motivated to reduce energy intensity due to climate risks. The results show that climate risk is significantly negatively correlated with energy intensity. This negative correlation is more significant among state-owned enterprises, heavily polluting enterprises, and enterprises with high energy dependence. This conclusion has been validated through a series of robustness and endogeneity tests. Mechanism analysis shows that the increase in climate risk increases environmental costs through strengthening corporate green innovation investment and management's environmental attention, enabling companies to actively improve energy efficiency and reduce energy consumption to reduce energy intensity. In addition, with the increase of external pressures such as environmental regulation and media attention, companies' resources and attention to cope with climate risk shocks are dispersed, and the effect of climate risks on reducing energy intensity is weakened. This paper further enriches the literature on the economic consequences of climate risks, reveals the mechanistic role of climate risks in corporate economic and energy decision-making, provides evidence for reducing corporate energy intensity and responding to climate risk shocks.

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  • Li, Ang & Ma, Yuze & Li, Bin, 2025. "How do climate risks affect corporate energy intensity? Evidence from China," Energy, Elsevier, vol. 323(C).
    • Handle: RePEc:eee:energy:v:323:y:2025:i:c:s0360544225012782
    DOI: 10.1016/j.energy.2025.135636
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