How Does Climate Policy Uncertainty Affect Corporate Sustainability? Evidence from a Quasi-Natural Experiment in China

As global climate change intensifies and the Paris Agreement advances low-carbon transformation, frequent local policy adjustments under China’s dual carbon goals have made climate-policy uncertainty a core challenge for corporate sustainability. Environmental, social, and governance (ESG) performance has grown exponentially in international capital markets, evolving from a peripheral concept to a key investment decision-making dimension. This study uses China’s carbon peaking and neutrality policies as a quasinatural experiment, applying the difference-in-differences (DID) method to the panel data of Chinese A-share listed companies (2014–2023). Taking high-energy-consuming enterprises as the treatment group, this study identifies net policy effects via the interaction of policy and time dummy variables. The results show that carbon peaking and neutrality policies significantly suppress the ESG performance of energy-intensive firms; mediating effect tests confirm that the policy harms ESG performance by increasing uncertainty. Implications include enhancing policy transparency and predictability and optimizing resource allocation to strengthen ESG resilience. Future research should focus on micro-level policy indicators and long-term effect tracking to provide theoretical and practical support for synergizing dual carbon goals with high-quality economic development.

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Publication Details

Journal
Sustainability
Published
2026-02-03
DOI
https://doi.org/10.3390/su18031554
Primary Topic
Energy, Environment, Economic Growth
Type
article
Field-Weighted Citation Impact
0.00

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article

How Does Climate Policy Uncertainty Affect Corporate Sustainability? Evidence from a Quasi-Natural Experiment in China

Yuan Virtanen, Zheng Wang, Xiao Qin, Yanju Liang
Sustainability
Energy, Environment, Economic Growth
article

How Does Climate Policy Uncertainty Affect Corporate Sustainability? Evidence from a Quasi-Natural Experiment in China

Yuan Virtanen, Zheng Wang, Xiao Qin, Yanju Liang
article en

Abstract

As global climate change intensifies and the Paris Agreement advances low-carbon transformation, frequent local policy adjustments under China’s dual carbon goals have made climate-policy uncertainty a core challenge for corporate sustainability. Environmental, social, and governance (ESG) performance has grown exponentially in international capital markets, evolving from a peripheral concept to a key investment decision-making dimension. This study uses China’s carbon peaking and neutrality policies as a quasinatural experiment, applying the difference-in-differences (DID) method to the panel data of Chinese A-share listed companies (2014–2023). Taking high-energy-consuming enterprises as the treatment group, this study identifies net policy effects via the interaction of policy and time dummy variables. The results show that carbon peaking and neutrality policies significantly suppress the ESG performance of energy-intensive firms; mediating effect tests confirm that the policy harms ESG performance by increasing uncertainty. Implications include enhancing policy transparency and predictability and optimizing resource allocation to strengthen ESG resilience. Future research should focus on micro-level policy indicators and long-term effect tracking to provide theoretical and practical support for synergizing dual carbon goals with high-quality economic development.

SustainabilityVol. 18(3)
Nanjing Tech University (CN), Nanjing University of Science and Technology (CN), Xi’an Jiaotong-Liverpool University (CN)
Government of Jiangsu Province, Jiangsu Provincial Department of Education
Openalex Percentile: Top 74%
Energy, Environment, Economic Growth
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