Carbon Neutrality and Enterprise Value

This study investigates whether improvements in carbon scores and carbon disclosures enhance firm value. The research question is empirically examined using data from China’s listed industrial businesses from 2013 to 2023. The enterprise’s Tobin’s Q, which serves as an indicator of firm value, is the dependent variable. The databases utilized for this investigation were Wind and China Stock Market & Accounting Research (CSMAR). To address the endogeneity issue related to carbon scores and carbon disclosure levels, the study employs a two-stage least squares regression model and the Hausman fixed-effect model. The findings indicate a negative correlation between an enterprise’s carbon score and its value. Moreover, the level of carbon disclosure also has a detrimental effect on firm value. Both the endogeneity test and the robustness test were satisfactorily passed, ensuring the reliability of the data. This study contributes to the body of evidence regarding the relationship between enterprise value and carbon neutrality in Chinese industrial businesses. It specifically explores how a firm’s carbon score and the extent of its carbon disclosure impact its value. The results may provide a theoretical reference for national carbon neutrality policies and could be beneficial for enterprises’ carbon offset management. © 2025 selection and editorial matter, Tarek Rana, Md Jahidur Rahman and Peter Öhman; individual chapters, the contributors.