IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v86y2025ipbs1544612325016836.html

Climate risk cognition and corporate ESG performance: The moderating role of Confucian culture

Author

Listed:
  • WANG, Yun

Abstract

The systemic risks triggered by climate change have escalated into a global challenge. China has integrated climate response into its national strategy, driving firms to embed climate risk management in the sustainability transitions. Utilizing 2012–2021 panel data from 560 listed companies in Shanghai and Shenzhen stock exchanges, this study examines the impact of climate risk cognition on ESG performance and the moderating role of Confucian culture. Findings indicate that enhanced climate risk cognition significantly improves ESG performance. Confucian culture positively moderates this relationship but exhibits an inhibitory effect in carbon emission pilot regions, with facilitated influences in non-SOEs and non-pilot areas. Recommendations include deepening corporate cognition of climate risk, leveraging traditional culture to advance ESG development, and improving regional climate governance.

Suggested Citation

  • WANG, Yun, 2025. "Climate risk cognition and corporate ESG performance: The moderating role of Confucian culture," Finance Research Letters, Elsevier, vol. 86(PB).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325016836
    DOI: 10.1016/j.frl.2025.108429
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612325016836
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2025.108429?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Bannier, Christina E. & Bofinger, Yannik & Rock, Björn, 2022. "Corporate social responsibility and credit risk," Finance Research Letters, Elsevier, vol. 44(C).
    2. Guo, Shu & Zhang, ZhongXiang, 2023. "Green credit policy and total factor productivity: Evidence from Chinese listed companies," Energy Economics, Elsevier, vol. 128(C).
    3. Miao, Qing & Popp, David, 2014. "Necessity as the mother of invention: Innovative responses to natural disasters," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 280-295.
    4. Zhang, Yutian & He, Yu, 2024. "How does the green financial system affect environmentally friendly firms' ESG? Evidence from Chinese stock markets," Energy Economics, Elsevier, vol. 130(C).
    5. Chen, Yongtai & Ren, Yi-Shuai & Narayan, Seema & Huynh, Ngoc Quang Anh, 2024. "Does climate risk impact firms' ESG performance? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 683-695.
    6. Jun Li & Ying Wang & Shizhi Liang & Peng Zhou & Ao Zhang, 2025. "Does the National Big Data Comprehensive Experimental Zone Pilot Policy Effectively Promote the ESG Performance of Firms? Evidence From Listed Firms in China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(5), pages 3106-3122, July.
    7. Kung, James Kai-sing & Ma, Chicheng, 2014. "Can cultural norms reduce conflicts? Confucianism and peasant rebellions in Qing China," Journal of Development Economics, Elsevier, vol. 111(C), pages 132-149.
    8. Ren, Xiaohang & Zhang, Xiao & Yan, Cheng & Gozgor, Giray, 2022. "Climate policy uncertainty and firm-level total factor productivity: Evidence from China," Energy Economics, Elsevier, vol. 113(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ge, Shilong & Luo, Xiaodan & Li, Yuangang & Zheng, Lanxing, 2024. "The impact of green credit policy on total factor productivity of enterprises," International Review of Economics & Finance, Elsevier, vol. 95(C).
    2. Lin, Boqiang & Xie, Yongjing, 2024. "Effect of renewable energy subsidy policy on firms’ total factor productivity: The threshold effect," Energy Policy, Elsevier, vol. 192(C).
    3. Wang, Zongrun & Zhang, Taiyu & Ren, Xiaohang & Shi, Yukun, 2024. "AI adoption rate and corporate green innovation efficiency: Evidence from Chinese energy companies," Energy Economics, Elsevier, vol. 132(C).
    4. Zhang, Lixia & Bai, Jiancheng & Sun, Huaping & Deng, Feng & Qian, Ying, 2025. "Climate policy uncertainty, supply chain resilience and enterprises’ green total factor productivity: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 103(C).
    5. Zheng, Pengju & Ning, Zihao & Wu, Qingyang & Li, WeiWei, 2025. "Climate policy uncertainty and labor demand in high-carbon industries," Finance Research Letters, Elsevier, vol. 84(C).
    6. Duan, Dingkang & Wei, Ran & Wang, Chao & Xia, Bingyu, 2025. "Opportunity or obstacle? Climate risk disclosure and corporate ESG performance," International Review of Economics & Finance, Elsevier, vol. 100(C).
    7. Li, Michelle & Han, Xing & Li, Youwei, 2024. "The impact of climate policy uncertainty on stock price synchronicity: Evidence from China," Finance Research Letters, Elsevier, vol. 69(PB).
    8. Tao Huang & Zeyu Sun & Zhe Zhao, 2025. "Is climate policy uncertainty priced in China?," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 39(4), pages 477-500, December.
    9. Xu, Wenshuai & Peng, Jianfei & Wu, Yun-Lang & Yin, Yahua, 2025. "Climate risk and corporate leverage manipulation: Evidence from China," Research in International Business and Finance, Elsevier, vol. 79(C).
    10. Deng, Guoying & Ma, Shibo & Yan, Jingzhou & Shuai, Can & Liu, Hanying, 2024. "Dissecting the impact of the three E, S, G pillars on credit risk," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 301-313.
    11. Yin, Libo & Cao, Hong, 2024. "Understanding climate policy uncertainty: Evidence from temporal and spatial domains," International Review of Financial Analysis, Elsevier, vol. 95(PB).
    12. Khalfaoui, Rabeh & Mefteh-Wali, Salma & Viviani, Jean-Laurent & Ben Jabeur, Sami & Abedin, Mohammad Zoynul & Lucey, Brian M., 2022. "How do climate risk and clean energy spillovers, and uncertainty affect U.S. stock markets?," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    13. Dong, Xiaotian & Wang, Kai-Hua & Tao, Ran & Sorana, Vătavu & Moldovan, Nicoleta-Claudia, 2024. "Is there a relationship between climate policy uncertainty and green finance? Evidence from bootstrap rolling window test," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 277-289.
    14. Han, Qingyang & Gao, Hongying, 2025. "Facilitating or inhibiting? The impact of climate policy uncertainty on enterprises' ESG performance in China," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 1329-1345.
    15. Lé Mathias, 2022. "The adaptation of economies to climate change: lessons from the economic research [L’adaptation des économies au changement climatique : les enseignements tirés de la recherche économique]," Bulletin de la Banque de France, Banque de France, issue 239.
    16. Giancarlo Giudici & Massimiliano Guerini & Cristina Rossi-Lamastra, 2019. "The creation of cleantech startups at the local level: the role of knowledge availability and environmental awareness," Small Business Economics, Springer, vol. 52(4), pages 815-830, April.
    17. Lai, Weizheng, 2024. "The effect of education on voter turnout in China's rural elections," Journal of Economic Behavior & Organization, Elsevier, vol. 221(C), pages 230-247.
    18. Huai Deng & Huan Wu & Hui Xu, 2025. "Social cost of carbon under endogenous social adaptation," Climatic Change, Springer, vol. 178(4), pages 1-20, April.
    19. Sylvain Dessy & Luca Tiberti & Marco Tiberti & David Zoundi, 2024. "Coping with Drought in Village Economies: The Role of Polygyny," Working Papers - Economics wp2024_13.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    20. Meles, Antonio & Salerno, Dario & Sampagnaro, Gabriele & Verdoliva, Vincenzo & Zhang, Jianing, 2023. "The influence of green innovation on default risk: Evidence from Europe," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 692-710.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • 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
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325016836. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.