Climate Risk and Corporate Carbon Emissions: A Global Perspective

ABSTRACT This study investigates the relationship between climate risk and firm‐level carbon emissions across the globe from 2010 to 2019. Our analysis reveals a significant negative impact of climate risk on corporate carbon emissions, with energy use and financial constraints identified as key economic channels driving this relationship. Through cross‐sectional analyses, we further explore the roles of factors such as the quality of government regulation, industrial competition, board composition, and various dimensions of carbon emissions. Our findings highlight substantial disparities in how climate risk influences different aspects of corporate carbon emissions. These results remain robust under a series of rigorous tests, reinforcing their validity. This research provides critical insights for investors, policymakers, and corporations, offering valuable guidance for the design and implementation of effective climate policies on a global scale. JEL Classification: D21, M14, Q54