The Paris Agreement and firms’ carbon information disclosure: Honesty or catering?

This paper evaluates the impact of the Paris Agreement on firms’ carbon information disclosure behavior in China. Using the difference-in-difference (DID) methodology, we find that the ratification of the Paris Agreement significantly enhances carbon disclosure among carbon-intensive firms while reducing their catering behavior. These consequences are more pronounced for firms with high financial constraints and high investor attention. Moreover, revealing more carbon information and catering less can enhance investor confidence and corporate value in the future. Our results enhance the literature by expanding the research perspective on global climate change governance agreements and enriching the understanding of corporate disclosure behavior. Additionally, this study underscores the strategic role of transparent carbon reporting for firms to align with investor expectations and improve their market position.