Analysis reveals that climate policy uncertainty hinders corporate environmental performance in heavily polluting enterprises in China, suggesting need for effective incentives.
By applying fixed‐effects model to China's A‐share listed heavily polluting enterprises from 2008 to 2022, this study investigates the impact of climate policy uncertainty (CPU) on corporate environmental performance (EP). We find that CPU significantly reduces EP of heavily polluting enterprises through technical innovation, financing constraint, and resource allocation mechanisms. Heterogeneity analysis reveals that CPU has stronger inhibitory effects on EP for state‐owned enterprises, capital‐intensive enterprises, and enterprises with low digital transformation. Additionally, shocks from climate policy risks are more pronounced than those from climate physical risks. These findings provide fresh insights for scientifically addressing CPU and effectively incentivizing heavily polluting enterprises to improve EP.
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Nie et al. (2026) studied this question.
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