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The charm of green finance: Can green finance reduce corporate carbon emissions?

Author

Listed:
  • Xin Zhao

    (Shaanxi Province Key Laboratory of Thin Films Technology & Optical Test, School of Opto-electronic Engineering - XATU - Xi'an Technological University)

  • Ramzi Benkraiem

    (Audencia Business School)

  • Mohammad Zoynul Abedin

    (Teesside University)

  • Silu Zhou

Abstract

The "dual carbon" approach, which emphasizes support for environmentally friendly development and green transition, has reignited passion for green finance. Simultaneously, green finance has progressively emerged as a pivotal approach for addressing climate challenges. The paper develops green finance indicators for Chinese provinces and carbon emission indicators for 2001–2020 A-share listed enterprises. Green financing has been proven to lessen carbon output by upgrading industrial constructure and technological advancement from macroscopical view. On the micro level, carbon emissions can be reduced through three channels: financing effect, innovation effect and external supervision effect. Further research shows that green finance has worse emission reduction results on enterprises in heavy polluting industries and resource-based industries. However, the reduction effect is better for enterprises with high capital intensity and high local marketization level. This conclusion has important guiding significance for the global government on how to achieve the "double carbon" goal through green finance reasonably and effectively.

Suggested Citation

  • Xin Zhao & Ramzi Benkraiem & Mohammad Zoynul Abedin & Silu Zhou, 2024. "The charm of green finance: Can green finance reduce corporate carbon emissions?," Post-Print hal-04925274, HAL.
    • Handle: RePEc:hal:journl:hal-04925274
    DOI: 10.1016/j.eneco.2024.107574
    Note: View the original document on HAL open archive server: https://hal.science/hal-04925274v1
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    Citations

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    Cited by:

    1. Zeng, Hongjun & Abedin, Mohammad Zoynul & Wu, Ran & Ahmed, Abdullahi D., 2024. "Asymmetric dependency among US national financial conditions and clean energy markets," Global Finance Journal, Elsevier, vol. 63(C).
    2. Han, Linna & Chen, Xihui Haviour & Wang, Yong & Hoang, Yen Hai, 2024. "Examining the impact of mineral export controls on sustainable energy transition in the global south," Resources Policy, Elsevier, vol. 98(C).
    3. Liyun Liu & Yefan Liu & Mingming Zhang & Xinyu Zhou & Jia Huang, 2025. "How Does Green Credit Affect Corporate Green Investment Efficiency? A Test Based on Listed Corporations in China’s Heavy Pollution Industry," Sustainability, MDPI, vol. 17(8), pages 1-24, April.
    4. Guo, Bingnan & Feng, Weizhe & Lin, Ji, 2024. "The impact of green finance on labor income share: Evidence from green finance reform and innovation pilot zone," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1347-1358.
    5. Rongrong Li & Siqi Zhang & Qiang Wang & Sailan Hu, 2025. "Fintech and urban environmental sustainability: Exploring the impact of financial technology on urban carbon emissions," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(2), pages 2118-2136, April.
    6. Di Zhou & Guo Chen & Dongchun Xie, 2025. "Can green financial pilot policy reduce firms’ carbon emissions? Evidence from Chinese manufacturing firms," Economic Change and Restructuring, Springer, vol. 58(1), pages 1-30, February.
    7. Zhu, Huayou & Bao, Weiping & Yu, Guojun, 2024. "How can intelligent manufacturing lead enterprise low-carbon transformation? Based on China's intelligent manufacturing demonstration projects," Energy, Elsevier, vol. 313(C).
    8. Zemin Wu & Qiuwei Wu & Xianyu Yu & Jin Tan & Qunwei Wang & Zhiling Hui, 2025. "Regulatory effect of carbon pricing on the negative impacts of coal phase-out," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-13, December.
    9. Shi Wang, 2025. "Green Credit, Digital Economy and Enterprise Pollution Reduction," Sustainability, MDPI, vol. 17(9), pages 1-24, April.
    10. Feng, Lingbing & Qi, Jiajun & Zheng, Yuhao, 2025. "How can AI reduce carbon emissions? Insights from a quasi-natural experiment using generalized random forest," Energy Economics, Elsevier, vol. 141(C).

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    Keywords

    green finance; corporate carbon emissions;

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