Green finance and grey air: evaluating the impact of green finance pilot zones on company-level pollution in China

Abstract In 2017, China introduced the Pilot Zones for Green Finance Reform and Innovations to achieve sustainable and high-quality economic growth. While this policy aims to promote the green transition of businesses and has drawn significant attention, its micro-operational mechanism and firm-level impact remain largely unexplored. This study addresses this research gap by employing a quasi-experimental approach to examine the policy’s effects on companies. The empirical results of our research highlight an unexpected 5.54% surge in the PM 2.5 concentration levels in the vicinity of these firms. Given these findings, we call on policymakers to reflect on the environmental consequences following the roll-out of the Green Finance Reform. Simultaneously, we stress the significance of corporate responsibility in disclosing pertinent indicators and environmental data.