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How carbon disclosure impacts corporate risk-taking: A heterogeneous structure perspective

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  • Jin, Ling
  • Liu, Bai

Abstract

Corporate risk-taking is shaped by firms’ disclosure decisions under uncertainty. As China advances its carbon reduction agenda, enhancing the standardization and transparency of carbon disclosures becomes vital to achieving dual carbon goals. The study explores the effect of carbon disclosure strategies on corporate risk-taking and the mechanisms involved. We find that greater disclosure—particularly of non-financial, narrative information—relates to lower risk-taking behavior. This effect is stronger in firms with high ownership concentration and persists in non-state-owned enterprises. The findings suggest that increased transparency promotes more prudent risk management. Unlike prior research that focuses on structured or frequency-based data, this study highlights the strategic content embedded in unstructured disclosures, underscoring the explanatory power of textual analysis in capturing firms’ climate strategies and behavioral responses to environmental regulation.

Suggested Citation

  • Jin, Ling & Liu, Bai, 2025. "How carbon disclosure impacts corporate risk-taking: A heterogeneous structure perspective," Finance Research Letters, Elsevier, vol. 85(PE).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pe:s1544612325015545
    DOI: 10.1016/j.frl.2025.108300
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