Carbon Emission、Carbon Disclosure、and Cost Of Equity Capital

Human civilization is accompanied by the industrialization of mankind,and the industrialization of mankind is accompanied by the emission of greenhouse gases.In recent years,the community has been widely concerned about greenhouse gases caused by the greenhouse effect.Government and non-governmental organizations are also constantly pressuring companies to proactively disclose information about carbon emissions,and to boost corporate image,while the market is also rewarding companies with good carbon performance and punishing companies with poor carbon performance.The pressure from all sides has made the enterprises pay more and more attention to the environmental problems such as carbon emission reduction,and more and more companies actively join the Carbon Disclosure Project.From a corporate point of view,as companies have recognized the opportunities and risks associated with carbon emissions,more companies are no longer considering carbon reduction as a burden for businesses.From the investor’s point of view,the disclosure of more carbon emission reduction information will provide more reference for investors ’investment decision,thus affect the investment cost of investors,and then affect the cost of equity capital of the enterprise.The main research in this paper is the relationship between carbon emission,carbon information disclosure and Enterprise equity capital cost.Firstly,this paper reviews the literatures at home and abroad,and puts forward some assumptions about carbon emission.This sample comes from the 2012 S & P 500 companies.Empirical part,this paper uses the simultaneous equations model to test the relationship between carbon emission,carbon information disclosure and Enterprise equity capital cost,and concludes that carbon emissions are positively correlated with the cost of equity capital of enterprises,that is to say,the higher the carbon emissions,the higher the cost of capital of enterprises ’ equity;The disclosure of carbon information is negatively correlated with the cost of enterprise equity capital,but there is no significant relationship.In this paper,we use the OLS regression model,the modified PEG model and the Heckman test,and the results show that the results of this paper are stable and reliable.The results of this study also show that because carbon information disclosure is essentially a cdli of CDP,it is very subjective,and carbon emissions have a strong objectivity,that is to say,the CDLI index score per increase does not fully represent the company’s energy saving and emission reduction,but carbon emissions per 1000 metric tons,But it can be intuitive to explain the company’s contribution to energy conservation and emission reduction.Thus,compared with the "good" companies with high quality carbon disclosure(ie,CDLI index scores),investors prefer a "well done" enterprise with less carbon emissions,which has a more significant impact on equity capital costs.Finally,this paper sums up the conclusion and gives the corresponding policy suggestions according to the empirical results.The research in this article will help investors to make decisions,avoid blind decisions by investors and enhance the effectiveness of investor decisions.For the carbon disclosure framework,it can play a complementary role,and it can also provide certain inspiration for China’s carbon market.