Work

The Impact of Climate Risks on Corporate Debt Financing

Year: 2025

Type: article

Abstract: ABSTRACT As global resource demands and climate pressures grow, companies face the dual challenge of sustainability and environmental responsibility. Using panel data from U.S. publicly listed firms (2014–2022) and a text‐based proxy for climate risks, this study explores the impact of just transition climate risks on corporate debt financing. Results show climate risks increase debt financing, driven by optimized leverage and operational strategies, but also constrain financing through efficiency and liquidity pressures. Smaller firms benefit most, though supply chain stress can reduce economic value. This study provides actionable insights for strengthening resilience and competitiveness in a low‐carbon economy.

Source: European Financial Management

DOI: 10.1111/eufm.70035

Authors: Xiaowei Ma, Xin Zhao, Xihui Haviour Chen, Zijie Wang

Institutions: Anhui University of Finance and Economics, European University of Lefke, Azerbaijan State University of Economics, Keele University, Zhejiang Gongshang University

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Climate action, Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,350