Climate-risk narrative attention and carbon emissions: internal governance and coal efficiency as moderators, green innovation as a mitigating channel

Abstract

Global decarbonization hinges on corporate behavior, yet principal–agent conflicts often undermine firms’ responses to climate change. Despite growing regulatory and stakeholder pressure, managers may prioritize short-term performance over long-term environmental goals when they perceive climate risks as distant or uncertain. Building on the growing literature on corporate climate risk, disclosure, carbon performance, and governance, this study applies a principal–agent lens to examine how climate-risk narrative attention (expressed climate-risk perception, Risk)—climate- and carbon-related language intensity in annual reports, not managers’ private beliefs—relates to firm-level carbon emissions (CO2e) among Chinese A-share listed firms from 2011 to 2024. We document a positive association: denser climate-related narrative attention is linked to higher CO2e under China’s institutional setting. A principal–agent reading can organize that pattern; we do not directly test short-termism or incentive horizons. We further show that stronger internal controls weaken this positive slope (moderation), and assigned province–industry coal productivity is associated with a flatter slope in coal-relevant industries, while green patenting is positively associated with Risk and negatively associated with CO2e in the same year—conditional correlations, not causal mediation. The perception–emission link is stronger among firms with low digital transformation, state-owned enterprises, non-high-tech firms, and those in less market-oriented regions. Climate-risk narrative attention may co-move with higher corporate carbon emissions. A principal–agent lens organizes the reduced form; short-termism is not directly tested. Internal control and coal energy efficiency moderate the slope; green patenting is a correlate, not a mediator. Assigned coal productivity co-moves with a flatter narrative-attention–emission slope. The narrative-attention–emission association is stronger among low-digitalization firms. Climate-risk narrative attention may co-move with higher corporate carbon emissions. A principal–agent lens organizes the reduced form; short-termism is not directly tested. Internal control and coal energy efficiency moderate the slope; green patenting is a correlate, not a mediator. Assigned coal productivity co-moves with a flatter narrative-attention–emission slope. The narrative-attention–emission association is stronger among low-digitalization firms.