The Impact Of Environmental Liabilities On Corporate Financing Costs

The economic development mode of most enterprises in China for many years still focuses on the pursuit of a single economic indicator results.Enterprises and residents need to consume a large amount of coal,oil and other energy resources in their production and daily life.The high-carbon energy structure leads to more and more serious ecological damage and environmental pollution.Environmental pollution is a worldwide problem.According to McKinsey curve to reduce emissions,emissions reduction and energy saving can bring huge economic benefits to developing countries,especially for industrial energy efficiency is low,the enterprises in high energy consumption of the unit,if can upgrade technology solve the problem of energy consumption,can greatly reduce the cost.The concept of environmental liability has come into people’s vision.The study of environmental liability involves the improvement of existing pollution,the upgrading of production technology,the investment of environmental protection equipment and the improvement of accounting account measurement in financial statements.Investment in technology and equipment is a large cost in the short term,but after a certain period can be recovered,reduce costs and increase benefits,while reducing costs and difficulties from a financing perspective through positive signal transmission.The financing cost of an enterprise is related to the financing cost and the use of funds.The financing cost refers to the related costs incurred by the enterprise in the process of financing and financing,that is,the costs directly or indirectly incurred.Capital usage fee refers to the risk-free reward and risk-free reward paid by enterprises to investors,that is,the cost cost reduced or increased by positive signals.Premier Li Keqiang pointed out that strengthening green development is the fundamental way to solve environmental problems.Green development requires us to continue to eliminate backward production capacity,quit excessive production capacity,develop clean production methods and new energy industries,increase investment in environmental protection,and set up a number of professional environmental protection key enterprises as a model.Only when the ecosystem reaches the balance of supply and demand can the economic system achieve sound development.Under the guidance of this development concept,the government and the public have realized the importance of ecological environment in economic development.Investors and creditors begin to include non-financial factors such as corporate social responsibility and environmental governance into their decision-making.Enterprises in various industries are constantly improving the quality of environmental information disclosure and increasing the number of environmental reports.This paper discusses the impact of disclosure and governance of environmental liabilities on corporate financing costs.Firstly,relevant literatures at home and abroad are divided into four aspects.The literature review of environmental information disclosure includes the introduction of its content,methods and channels,and the introduction of the concept and measurement of environmental liabilities.This leads to the introduction of the concept and measurement of environmental liabilities.By sorting out the determinants of enterprise financing costs,the correlation between environmental liabilities and enterprise financing costs is analyzed.It also introduces the relevant theoretical basis and the different ways to study the impact of environmental factors on cost from the perspectives of equity financing and debt financing.Secondly,the data of 156 enterprises in different industries on the Shanghai and Shenzhen markets were selected as samples for empirical analysis.Finally,this paper makes some suggestions from the perspectives of government,Banks and investors.The conclusion of this paper shows that in the capital market,there is information asymmetry between the two sides,which will lead to risk premium,that is,the increase of financing cost.By taking social responsibility,maintaining corporate reputation and optimizing corporate image,enterprises can reduce the negative impact of such information asymmetry.Corporate disclosure and governance of environmental liabilities can reduce financing costs and have a positive impact on corporate performance.Equity investors and debt investors predicted lower environmental risks,correspondingly reduced the rate of return on investment,improved the confidence in the repayment due by the enterprise,and thus reduced the total cost of enterprise financing.