Environmental information disclosure and corporate performance: Evidence from Chinese listed companies

Corporate energy consumption and emissions are major contributors to pollution and greenhouse gas emissions. Therefore, corporate energy conservation and emission reduction are essential for sustainable development and low-carbon transformation in China. With pressing global environmental issues and the mounting pressure for carbon neutrality, it is increasingly important for firms to disclose environmental information. However, research on the relationship and mechanisms between corporate environmental information disclosure (EID) and corporate performance is insufficient. This study examines the effect of EID on corporate environmental performance (EP) and financial performance (FP) using a two-way fixed-effect model. For this purpose, this study considers the panel data of 1125 Chinese A-share listed companies from 2009 to 2021. Additionally, we explore the underlying mechanisms using mediation models. The results reveal that EID can significantly improve corporate performance through green innovation (GI). Moreover, EID can enhance corporate GI, which improves the financial performance of highpolluting firms and the environmental performance of non-high-polluting firms. According to these results, it is imperative to continuously improve corporate EID systems and encourage GI in enterprises. Thus, firms should take the initiative to disclose environmental information. There is a pressing need to enhance the effectiveness of the capital market, therefore, firms with higher levels of EID and better environmental performance can gain greater benefits.