Green finance policy and corporate carbon emissions: advancing corporate sustainability

The threat posed by climate deterioration are gradually expanding, and excessive carbon emissions resulting from corporate production are one of the main reasons for global warming. Therefore, how to curb corporate carbon emissions has become an urgent issue that needs to be addressed. The “Green Finance Reform and Innovation Pilot Zone” policy serves as a quasi-natural experiment to examine the impact of green finance policy on corporate carbon emissions with difference-in-differences and double/debiased machine learning methods. Results show that green finance policy can inhibit corporate carbon emissions, particularly direct carbon emissions. It is more significant for firms that are high-energy-efficiency, located in financially developed areas and highly competitive industries. Moreover, the reduction of managerial myopia and the alleviation of information asymmetry are identified as key mediating mechanisms, with stronger mediation effects observed for direct carbon emissions compared to indirect carbon emissions. Additionally, environmental regulation and intellectual property protection positively moderate these relationships. The former predominantly influences indirect carbon emissions, while the latter has a more substantial impact on direct carbon emissions. Overall, the carbon reduction can significantly decrease the operating fee as well as increase corporate value.