How does enterprise’s attention on carbon risk information matter in carbon abatement costs? Evidence from China’s heavy polluting firms

Carbon risks are pivotal determinants that firms must consider in their carbon reduction efforts. However, previous studies overlooked the internal impact of enterprise’s carbon risk attention (ECRA) on carbon abatement costs (CAC). To address this gap, this study takes 571 China’s listed heavy-polluting enterprises from 2011 to 2021 as samples to examine the impact of ECRA on CAC, and identify the transmission mechanism and the moderating role of stakeholder pressure by mechanism and moderation tests, respectively. ECRA means the attention that companies pay to carbon risk, and is constructed using textual analysis, covering potential carbon risks and low-carbon opportunities faced by enterprises. CAC is measured by the shadow price of carbon emissions and estimated through SBM-DEA model. The results show that ECRA significantly reduces CAC. Specifically, every unit increase in ECRA leads to a 0.73 thousand yuan/ton decrease in CAC. Mechanism tests indicate that ECRA reduces CAC by promoting green technology innovation. Moderation tests reveal that employee pressure and social reputation pressure strengthen the negative effect of ECRA on CAC, whereas shareholder, creditor, consumer, and public opinion pressures weaken this effect.