This study examines whether corporate disclosures of carbon-reduction actions are associated with firm value under China's “dual-carbon” strategy. It further compares the valuation relevance of internally oriented operational disclosures and value-chain-oriented disclosures and investigates the moderating role of digital transformation.
Using Chinese A-share listed firms from 2013 to 2023, this study develops a machine-learning-assisted textual measurement approach to identify disclosures of carbon-reduction actions from annual reports, environmental, social and governance (ESG) reports and sustainability reports. Fixed-effects regressions are employed to test valuation effects, with additional analyses on moderating effects, mediating mechanisms and firm heterogeneity.
Corporate disclosures of carbon-reduction actions are positively associated with firm value. This association is stronger for internally oriented operational disclosures than for value-chain-oriented disclosures. Digital transformation negatively moderates both associations. Channel tests provide evidence consistent with three mechanisms: improved trade credit, stronger media reputation and enhanced green innovation.
Firms should improve differentiated carbon disclosure across emission scopes and coordinate resource allocation across digital and green initiatives. Policymakers should strengthen disclosure standards and provide targeted support for small and medium-sized firms to enhance collaborative carbon reduction and green innovation.
This study introduces an emission-scope-informed perspective into research on the market valuation of carbon-reduction disclosures and develops a machine-learning-assisted approach for identifying firm-level disclosures of carbon-reduction actions.
