Carbon Disclosure Quality, Internal Control, and Corporate Financial Performance

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Offers a replicable CDQ scoring framework and empirical evidence on the moderating role of internal control, useful for further research on disclosure-finance links.

🏢実務担当者:Highlights that investing in internal control systems can amplify the financial returns from carbon disclosure, guiding corporate strategy.

🏛政策担当者:Suggests that disclosure mandates should be paired with internal control reinforcement to maximize effectiveness, informing regulatory design.

Amid intensifying climate commitments, this paper investigates whether and how carbon disclosure quality (CDQ) translates into corporate financial performance (CFP), and whether internal control (IC) strengthens this translation. Using a balanced panel of 1,218 Chinese A-share firms over 2010–2023, we build a multidimensional CDQ index – covering carbon governance, strategies and targets, footprints, and relevance/reliability – weighted via the entropy method and lagged to mitigate reverse causality. The sample comprises 15,834 firm-year observations, and models include firm, year, and industry fixed effects with clustered standard errors. Three-way fixed-effects estimations and two-step system GMM address unobserved heterogeneity and endogeneity; diagnostics (no AR (2), valid Hansen test) support instrument validity. Analyses further control for size, leverage, institutional ownership, board independence, ownership concentration, CEO duality, audit quality, heavy-polluting industry, and state ownership. The study finds that higher CDQ significantly improves CFP. Further, IC positively moderates the CDQ–CFP link: firms with stronger IC convert transparent carbon reporting into greater financial value, consistent with stakeholder theory. Results remain robust to an alternative market-based proxy (market-to-book ratio) and to exclusion of pandemic years (2020–2021), and are insensitive to multicollinearity checks. This study advances theory by demonstrating that credible climate disclosure yields financial benefits in an emerging market when coupled with effective internal governance; advances practice by highlighting that managers and regulators should pair disclosure mandates with IC reinforcement; and advances method by offering a replicable, Python-assisted scoring framework aligned with TCFD/ISSB guidance. Policy and investment implications follow: encouraging credible carbon reporting and strengthening internal control can lower information asymmetry, bolster legitimacy, and enhance firm valuation as economies transition to low carbon.

• semanticscholar https://doi.org/10.17323/j.jcfr.2073-0438.19.4.2025.31-49first seen 2026-05-05 21:43:48