The Impact of Environmental Information Disclosure in the "Carbon Trading Pilot" Project on the Financial Performance of Listed Enterprises in China

Environmental policy has long been regarded as the key to achieving sustainable growth goals. Because China is one of the most energy-consuming and carbon-emitting countries globally, its carbon reduction actions have received worldwide attention. This study aims to simultaneously focus on the impact of environmental disclosure and the level of environmental disclosure on enterprise performance. Thus, we use China's 2013 "Carbon Trading Pilot" policy as an exogenous shock and adopt the DID (difference-in-differences) method to examine the impacts of policy-related disclosure and the disclosure level on the financial performance of listed enterprises from 2009 to 2020. The results are as follows: (1) The "Carbon Trading Pilot" policy-related environmental disclosure negatively affects enterprise financial performance; however, the environmental disclosure level is positively correlated with enterprise financial performance, and both impacts are heterogeneous. (2) The impact of the "Carbon Trading Pilot" project-related environmental disclosure level on enterprise financial performance has a threshold effect, where its impact is enhanced when the environmental disclosure index reaches 10.074. (3) Further exploration of mechanisms reveals that total liabilities play an action mechanism role in the above two relationships. Studying the impact of environmental policies on enterprise financial performance is of paramount significance for economic sustainability.