Institutional Investor Climate Change Concern and Corporate Green Governance: Evidence From China

ABSTRACT

This study identifies climate change concern as a distinct governance channel through which institutional investors promote corporate green governance. ESG performance and green innovation are important mechanisms underlying this relationship. The effect is stronger following the implementation of the Green Investment Guidelines, in environmentally sensitive industries, and among firms with higher institutional ownership. The findings remain robust to a series of endogeneity and robust tests, highlighting the important role of climate‐conscious institutional investors in advancing corporate sustainability and green transformation in emerging markets.