An Empirical Research On The Correlation Between Carbon Information Disclosure And Financial Risk

In recent years, global warming has a seriously negative impact onenvironments. Developing low-carbon economy is one of the mostsignificant method of addressing climate change and helping relieve thecrisis. Disclosing carbon information is an important act for corporationsto fulfill their responsibilities to develop low-carbon economy andprotect the environment. Moreover, China’s capital market is anemerging young market, the information disclosure mechanism is notperfect. No matter how the quality of information disclosure is,stakeholders still make corresponding interpretation and decision basedon their own motivations, and their decisions further cause theuncertainty of investment environment, financing environment, capitalturnover, profits allocation, etc., which finally influences corporatefinancial risk. Hence, more and more companies realize the significanceof disclosing environment information and voluntarily disclose carboninformation.This article analyzes the motivations and reasons for corporate to do the carbon disclosure. Furthermore, based on this theoretical analysis,the hypothesis--the risk of corporate finance has a negative correlationwith carbon disclosure, is proposed. Social responsibility reports oflisted companies in Shanghai and Shenzhen Stock Exchange from year2009to year2012as well as carbon disclosure information and datafrom these reports have been collected. Based on this data, we haveunder taken an experimental analysis to test whether carbon disclosurecan decrease the risk of corporate finance. Also, we have divided thosesamples by industry, in order to verify the previous establishedhypothesis.In conclusion, the result of the research indicates that weatherdisclosing carbon information can not affect corporate financial risk.However, the quality of carbon disclosure has negative correlation withcorporate financial risk. Besides, this article analyzes the reasons thatlead to the conclusion of the research in detail. In addition, somerecommendations which might improve the carbon disclosuremechanism in China are proposed for future researches.