Can City Climate Policy Promote Corporate Green Transformation in China? A Perspective of Promotion Pressure and Environmental Awareness

Climate governance is an essential pathway to achieving the ‘dual carbon’ strategic goals and promoting green and sustainable corporate development. This study employs the practice of China’s Climate-Resilient City Development Pilot Policy (CRCDPP) as a quasi-natural experiment, utilizing a difference-in-differences approach to examine the policy’s impact on corporate green transformation and its underlying mechanisms. Research findings indicate that the pilot policy effectively promotes corporate green transformation. First, promotion pressures faced by government officials suppress the positive effect of the policy on corporate green transformation. Environmental awareness among management promotes the role of climate policies in driving corporate green transformation. Second, the pilot policy’s promotion of corporate green transformation is transmitted through enhanced government governance and increased government environmental expenditures. Heterogeneity analysis indicates that the policy has a more pronounced effect on enterprises with political connections, high digitalization levels, high climate risk levels, high regional rule of law levels, or high regional pollution levels. The findings provide important insights for addressing climate change, refining climate adaptation policies, and stimulating corporate green transformation.