The Impact Of Climate Change On The Credit Risk Of Listed Companies In The Mining Industry In China

In recent years,the uncertainty brought about by global climate change has increasingly affected economic activities,and the losses caused by the "green swan" caused by climate change cannot be underestimated,which has had a certain impact on the sustainable development of agricultural production,energy extractive industries and other industries,and threatens the normal transactions of the market,making changes in the performance ability of enterprises,affecting the credit level of enterprises,thereby triggering turbulence and risks in the financial sector.The mining industry drives the overall economy through the supply chain and industrial chain,and its sensitivity to climate change is high,and people should pay attention to and actively prevent the risks brought by climate change to the mining industry: on the one hand,climate change will make production factors such as personnel work efficiency and equipment utilization rate decline,which will cause great challenges to the production and operation of enterprises,and the financial debt repayment and financing capacity of enterprises will decline;On the other hand,climate change will also cause large fluctuations in commodity prices in the international market,affecting the market prices of corporate products,resulting in changes in their performance and solvency.At present,climate change has gradually been widely discussed in society,and the inclusion of climate change factors in the field of financial risk and corporate credit management has also shown a rapid development momentum,but most of the literature studies climate finance risk discusses the impact of climate on enterprise development from the perspective of extreme climate,and rarely based on the impact of global climate change on the sustainable development of natural mineral resources and its market behavior.This article explores whether climate change has an impact on the credit risk of mining companies.Is there a difference in the impact of different characteristic enterprises? What are the paths of impact?In view of this,this paper takes listed companies in China’s mining industry as the research object,takes climate change as the starting point,selects the data from2015 to 2021,and constructs a random-effects model to explore the impact of climate change on the credit risk of listed companies in the mining industry and its mechanism.Firstly,this paper combs through domestic and foreign credit risk,climate change and other related literature,so as to provide support for the subsequent empirical analysis.Secondly,the theories of credit risk and sustainable development are summarized,and four research hypotheses are put forward based on the characteristics of the mining industry and the seasonal characteristics of climate change.Thirdly,the KMV model is used to calculate the default distance of listed companies in the mining industry to measure their credit risk level,and the climate indicators of the observation site where the enterprise is located are selected to calculate the annual average temperature fluctuation,so as to explore the impact of climate change on the credit risk of the mining industry.Then,since climate change may affect both supply and demand of the industry,this paper introduces the two mediating variables of main business income and inventory to explore whether they have mediating effects,so as to illustrate the impact mechanism of climate change,and test the robustness of benchmark regression by alternative regression models and switching explanatory variable data sources.Finally,considering the marginal effects of climate change and reducing the error caused by the averaging of extreme climate impacts caused by annual climate change data,this paper uses quarterly climate data for extended analysis and testing.The research conclusions of this paper have the following four aspects:(1)The annual average temperature fluctuation has a significant impact on the overall credit risk level of the mining industry,in general,the greater the temperature fluctuation,the greater the default distance of the mining industry,and the smaller the credit risk,but in the case of extreme temperature fluctuations,it has an opposite effect on the overall credit risk of the mining industry,that is,when the temperature fluctuation degree exceeds two standard deviations,the smaller the default distance of the mining industry,the greater the credit risk.The difference in empirical conclusions between the two situations may be due to different impact mechanisms.(2)The impact of climate change on the credit risk level of mining industry sub-sectors is different,and the oil and gas and natural gas extraction industries have a significant positive correlation,while other industries have no obvious impact,which indicates that the energy industry is significantly sensitive to changes in the external environment such as climate change,and the industry should pay more attention to the risks brought by climate change.(3)There are some intermediary effects in the mechanism of climate change affecting the credit risk of the mining industry.It shows that on the one hand,there is a price demand mechanism in the external market,and the demand effect of climate change leading to the price fluctuation of mining products in the international market is significant,on the other hand,the intermediary mechanism of internal output effect exists,and the production and supply stocks of enterprises are affected by climate change.At the same time,the robustness test results indicate that the data is robust.(4)The annual average temperature fluctuation was further refined into four quarters for scalability testing,and it was found that the temperature fluctuation in winter was significantly negatively correlated with the default distance of the mining industry,that is,the greater the degree of climate change,the greater the default distance,and the lower the credit risk.The degree of temperature fluctuation in the other three seasons was significantly positively correlated with the distance to default in the mining industry.It shows that winter market effects predominate,while climate change in the other three seasons has a greater impact on the intrinsic output of enterprises.The possible innovation points of this paper include the following two aspects:(1)Innovation from the research perspective: At present,most scholars on credit risk evaluation research is based on macro and micro data for evaluation,for external factors quantitative and qualitative research is less,this paper takes climate change as the starting point to explore its impact on the credit risk of the mining industry,and adds the main business income and inventory as intermediary variables to explore whether it has an intermediary effect,in general,the research in this paper expands the research on the impact of climate change on the credit risk of the mining industry.(2)Innovation of research conclusions: This paper concludes from theoretical and empirical analysis that the more severe the climate change,the lower the level of corporate credit risk,which comes from the benefits brought by market price fluctuations,indicating that the role of external market effects is more significant,and when climate change reaches more than two standard deviations(extreme cases),it presents the opposite situation,at this time the internal impact effect of climate change on enterprises dominates,and the benefits brought by price fluctuations cannot compensate for the devastating production blows caused by extreme weather.The conclusions of this paper provide space for the investigation of climate change on the credit risk of the mining industry.