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Veiled by a green image: Corporate carbon commitments and employee lawsuits

Author

Listed:
  • Chen, Yutong
  • Du, Mei
  • Xie, Yushan
  • Wang, Jiani

Abstract

This study examines the relationship between corporate carbon commitments and employee lawsuits. Using a sample of Chinese A-share listed firms from 2018 to 2023, we find that firms disclosing carbon commitments are more likely to face employee lawsuits. Cross-sectional analyses reveal that this tendency is more pronounced in firms receiving greater attention from external stakeholders, such as the government, green investors, and the media, and in firms with ineffective corporate governance. Moreover, external resource constraints exacerbate the impact of carbon commitments on employee lawsuits. The economic consequence tests reveal the positive real effect of carbon commitments on corporate environmental investments and performance. We also demonstrate that such commitments enable firms to obtain more government subsidies. Overall, our findings highlight the impacts of a novel form of carbon disclosure and reveal how firms unequally treat different stakeholder groups.

Suggested Citation

  • Chen, Yutong & Du, Mei & Xie, Yushan & Wang, Jiani, 2026. "Veiled by a green image: Corporate carbon commitments and employee lawsuits," Finance Research Letters, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:finlet:v:88:y:2026:i:c:s1544612325025851
    DOI: 10.1016/j.frl.2025.109336
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    Keywords

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    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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