Low carbon finance drives corporate carbon emissions reduction: A perspective from issuing carbon neutral bonds

Driven by the goal of carbon neutrality and carbon peaking, reducing corporate carbon emissions is of great significance. This study quantifies the characteristics of carbon neutrality bond and tests its effects on corporate carbon emissions. Based on methods such as double fixed effect, SYS-GMM, and IV-2SLS, this paper examines the relationship between the two and draws the following conclusions. First, carbon neutrality bond can reduce corporate carbon emissions. Secondly, the higher the scale, duration, and rating of carbon neutrality bond, the more conducive it is to reducing corporate carbon emissions, and publicly offered carbon neutrality bond is also more conducive to reducing corporate carbon emissions. Thirdly, carbon neutrality bond will reduce corporate carbon emissions by promoting environmental responsibility fulfillment, subsidies, internal control quality and information transparency. However, it exacerbates corporate carbon emissions by increasing greenwashing and liquidity risks. Fourthly, carbon neutrality bond has a stronger inhibitory effect on carbon emissions of large-scale firms, central state-owned firms, and mature-period firms. This study overall concludes that carbon neutral bonds have a significant carbon reduction effect, which aims to provide suggestions on low-carbon finance to promote corporate carbon reduction.