Carbon Emissions Trading and Corporate Sustainability in Chinese Listed Companies: The Moderating Role of Executives

Abstract

Global warming, caused by a recent massive increase in carbon dioxide emissions, poses a serious threat to the sustainable development of human society. Companies that are key stakeholders in reducing carbon emissions can help sustainable development by participating in carbon transactions. In addition, as strategic corporate decision makers, management can control the impact of carbon emissions on sustainable development. The purpose of this study is to focus on whether carbon emission trading affects corporate sustainability and the role of executives. Therefore, this study uses a fixed-effect regression model to analyze the impact of participation in carbon emission trading of A-shares listed companies in China on corporate sustainability from 2019 to 2023, and to study the moderating effects of three characteristics of management on the relationship: overconfidence, green experience, and environmental awareness. Data from this study were obtained from the Chinese stock market and the Chinese Accounting Research Database, and filtered and processed using Stata 16.0. As a result of the study, as expected, carbon trading significantly improved the sustainability of companies. At the same time, management's green experience and environmental awareness had a positive moderating effect on the impact of carbon trading on corporate sustainability, and management's overconfidence had a negative moderating effect on the relationship. This study extends theories related to sustainable development and carbon trading and provides a theoretical basis for policy making by corporate management and government.