Does enterprise digital transformation contribute to the carbon emission reduction? Micro-level evidence from China

Energy saving, emission reduction and low carbon development are the key contents to promote sustainable development in the world, which are also important paths to achieve China's dual carbon target on schedule. Especially in the wave of digital economy, the optimization of production mode brought about by the enterprise digital transformation is becoming an important driving force to reduce carbon emission intensity of enterprises. Based on the text analysis of 2012-2020 annual reports of Shanghai and Shenzhen A-share listed companies, we measure the level of enterprise digital transformation, and then empirically investigate the impact of enterprise digital transformation on carbon emission intensity and the mechanisms. We find that enterprise digital transformation can significantly reduce the carbon emission intensity by improving their ability of technological innovation, internal control and environmental information disclosure. And the results are robust after a series of robustness tests such as eliminating the endogeneity bias, replacing variables and limiting samples. Furthermore, heterogeneity analysis show that digital transformation has a stronger effect on the enterprises which located in the regions with strong intellectual property protection and the capital intensive enterprises, but there is no heterogeneity in the types of enterprises, in the intensity of environmental regulation of enterprises and in the information infrastructure construction of enterprises. Under the background of digitization, this paper discusses the path choices for enterprises to reduce carbon emissions, which provides references for enterprises to grasp the opportunities in the new tide of scientific and technological revolution and green economic transition.

Automated summary

Energy saving, emission reduction, and low carbon development are crucial for sustainable development globally and for China's dual carbon target. The digital transformation of enterprises plays a significant role in reducing carbon emissions by improving technological innovation, internal control, and environmental information disclosure. Based on a text analysis of annual reports from Shanghai and Shenzhen listed companies during 2012-2020, the study measures the level of enterprise digital transformation and empirically investigates its impact on carbon emission intensity. The findings show that enterprise digital transformation effectively reduces carbon emissions, and this effect remains robust even after conducting various tests. The study also analyzes the heterogeneity and concludes that the impact of digital transformation is stronger in regions with strong intellectual property protection and capital-intensive enterprises. However, it does not differ based on enterprise types, environmental regulation intensity, and information infrastructure construction. This paper discusses the path choices for enterprises to reduce carbon emissions, offering insights for businesses to seize opportunities in the new wave of technological and green economic transition.