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Carbon Disclosure and Carbon Performance in Green Transition: An Empirical Study of Policy Regulation and Regional Differences

Author

Listed:
  • Tian Xia
  • Isaac Appiah‐Otoo
  • Xudong Chen

Abstract

Under the severe background of global warming, carbon emission management has become a key factor in the sustainable development of enterprises. With China's “dual carbon” goal, the challenges and opportunities of corporate carbon management have become increasingly prominent. This paper examines the impact of carbon disclosure on corporate carbon emission reduction performance, as well as the effectiveness of government subsidy mechanisms, using a sample of 33,175 firm‐year observations from Chinese A‐share listed companies between 2008 and 2023. Utilizing the fixed effects model, we find that carbon disclosure significantly enhances carbon performance; however, government subsidies mitigate the positive effect. In addition, the double difference analysis reveals that green financial policies have a negative effect on the relationship between carbon disclosure and carbon performance, suggesting that some low‐quality disclosure enterprises may obtain excessive financing through policy arbitrage, thereby weakening the emission reduction motivation of high‐quality disclosure enterprises. The analysis of regional differences reveals that enterprises in the eastern region exhibit more significant positive effects in the relationship between carbon disclosure and carbon performance, whereas those in the western region face constraints related to resource and policy support. Based on these findings, this study suggests that policymakers should strengthen the regulation of carbon disclosure quality in green finance policies while also formulating more precise regional policy support to promote enterprises' low‐carbon transition. Enterprises, on the other hand, should enhance their competitiveness in the low‐carbon economy by improving the quality of carbon disclosure and optimizing resource allocation.

Suggested Citation

  • Tian Xia & Isaac Appiah‐Otoo & Xudong Chen, 2026. "Carbon Disclosure and Carbon Performance in Green Transition: An Empirical Study of Policy Regulation and Regional Differences," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(1), pages 624-636, February.
    • Handle: RePEc:wly:sustdv:v:34:y:2026:i:1:p:624-636
    DOI: 10.1002/sd.70291
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    References listed on IDEAS

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