Journal of Applied Finance & Banking

Does Carbon Disclosure Matter? Corporate Finance and Bank Lending Evidence from Taiwan

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• Abstract

   

  This study examines the relationship between carbon emission disclosure, corporate financial performance, and bank loan terms using panel data from publicly listed firms in Taiwan from 2011 to 2020. Firm characteristics such as size, reputation, book-to-market ratio, and industry pollution level significantly influence the likelihood of disclosure. The findings reveal a positive association between carbon reporting and financial performance, suggesting that greater transparency may enhance investor confidence and future profitability. Furthermore, disclosing firms benefit from more favorable loan conditions, including lower interest spreads, larger loan amounts, longer maturities, and a reduced need for collateral. These results highlight the financial value of environmental transparency.

   

  JEL classification numbers: G30, G32.

  Keywords: Carbon disclosure, Corporate performance, Bank loan contract terms, ESG.