Enhancing corporate green innovation is a critical component of advancing sustainable transformation and addressing escalating climate-related risks. From a cognition-to-behavior perspective, this paper constructs a climate risk perception index based on annual report texts from Chinese A-share listed firms from 2003 to 2023 and examines its impact on corporate green innovation, as well as the underlying mechanisms. The study finds that stronger climate risk perception significantly promotes both the quality and quantity of corporate green innovation. Mechanism analyses show that this effect operates through alleviating financing constraints, increasing research and development (R&D) investment, and improving environmental, social, and governance (ESG) performance. Heterogeneity tests further indicate that the positive impact is more pronounced among firms located in eastern China and among state-owned firms. Regarding scale heterogeneity, climate risk perception boosts the quantity of green innovation more effectively in large firms and boosts the quality of green innovation more effectively in small firms. This study provides micro-level evidence and theoretical insights into corporate green transformation behaviors under climate uncertainty.
Bao et al. (Mon,) studied this question.