How does green credit policy improve corporate social responsibility in China? An analysis based on carbon‐intensive listed firms

Abstract

For China to become carbon neutral, green financing is seen as a crucial avenue, wherein the green credit policy, which was introduced in 2012, is a crucial tool. However, whether the policy would work and how to improve its effectiveness remain unknown. This study attempts to analyze the policy's effects on carbon performance, a crucial measure of Corporate Social Responsibilities (CSR), particularly in carbon‐intensive industries, using a sample of Chinese listed companies from 2009 to 2018. As a result, first, it's confirmed that the policy can boost carbon performance of carbon‐intensive firms. Additionally, this study has verified that firm's R&D investment intensity has no mediating role in the relationship between the policy and carbon performance, while debt financing cost partly mediating the relationship, implying the policy fails to stimulate technological innovation. Moreover, firms with stronger environmental regulation intensity, weaker financing constraints, poorer corporate governance and more analyst following have greater promotion in carbon performance after the policy execution. Finally, the policy significantly improves the quality of corporate environment information disclosure. Briefly, this study enriches theoretical grounding regarding strategies of green reform in carbon‐intensive industries and provides implications for emerging economies to improve green finance via enhancing CSR.

Can green credit policy reduce corporate carbon emission intensity: Evidence from China's listed firms

“…Currently, no publicly firm‐level CO 2 emissions data are available in China. We construct the firm‐level CO 2 emissions by referring to Shen and Huang (2019) and Chen et al (2022) and then design corresponding firms' CEI by referring to Chapple et al (2013) and Shen and Huang (2019) as the following Equation (). where, CEI is the carbon emission intensity of firm in year . and are respectively the main business cost and main business income of firm in year , both obtained from the CSMAR database.…”

“…Specifically, the did variable denotes the interaction of treated group dummy () and policy shock year dummy (), that is, . The GC mainly restricts the flow of funds to energy‐intensive and carbon‐intensive industries (Chen et al, 2022; Zhang, Deng, & Wu, 2022). The China Banking and Insurance Regulatory Commission (CBIRC) has listed these restricted industries by GC (see appendix Table A).…”

“…Currently, no publicly firmlevel CO 2 emissions data are available in China. We construct the firm-level CO 2 emissions by referring to Shen and Huang (2019) and Chen et al (2022) and then design corresponding firms' CEI by referring to Chapple et al (2013) and Shen and Huang (2019) as the following Equation (1).…”

“…Besides, some literature have paid attention to carbon emissions (Chen et al, 2022), while few research focus on carbon emission intensity (CEI) (Zhang, Deng, & Wu, 2022). The reduction of total CO 2 emissions can be achieved in two ways, that is, the reduction of CEI or less production.…”

“…China is striving to attain the goal, that is, CO 2 emissions highest by 2030 and carbon neutrality by 2060. The green credit (GC), put forward by the China Banking Regulatory Commission in 2012, is a market‐oriented policy that contributes to China's carbon neutrality and high‐quality economic growth (Chen et al, 2022; Yang et al, 2023). Figure 1 draws the changing trend of the green credit balance of 5 large state‐owned and 12 national joint‐stock commercial banks from 2014 to 2019.…”