Does climate risk disclosure promote corporate green innovation? The role of internal resource reallocation

Against the backdrop of deepening global climate governance and China’s advancing dual carbon goals, climate risk disclosure has gradually emerged as an important institutional arrangement for firms to respond to climate change and accelerate green transformation. Using a sample of China’s A-share listed firms from 2016 to 2024, this study systematically investigates how climate risk disclosure affects corporate green innovation and explores its underlying mechanisms. The empirical results show that climate risk disclosure exerts a significant positive effect on corporate green innovation. Mechanism analyses confirm the existence of internal resource reallocation channels. Specifically, climate risk disclosure increases firms’ R&D investment and crowds out speculative financial asset holdings. Furthermore, heterogeneity analyses demonstrate that the facilitating effect is more pronounced for firms with severe natural disaster exposure, weaker regional environmental regulation, lower traditional core business risk, higher institutional ownership and less severe financial constraints. These findings enrich the literature on the relationship between climate risk disclosure and corporate green innovation while providing targeted policy and managerial implications for policymakers and firm executives to advance environmental sustainability.