The Impact of Climate Change Risk on Corporate Debt Financing Capacity: A Moderating Perspective Based on Carbon Emissions

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

This paper uses the data of Chinese A-share listed companies from 2010 to 2022 to study the impact of climate change risk on corporate debt financing ability, and explores the moderating role of carbon emission intensity.There is much room for improvement in this paper.

 

1.There are a lot of Chinese literature in the references, it is recommended to replace with SSCI.

2.The paper has a lot of Chinglish and long difficult sentences. It is suggested to further improve the language quality of the paper.

3.It is suggested that the authors adjust the format of the full paper according to the format of the journal of Sustainability, especially the headings and charts.

3.In response to 4.6.3, the traditional three-step approach to intermediary effects has a serious missing variable bias problem, and it is suggested that the authors use the two-step approach to prove that climate risk has a negative impact on the debt financing ability of enterprises by weakening corporate competitiveness, increasing default risk and reducing organizational resilience.

4.For 4.5, the author tries to prove that the reduction of carbon emission intensity of enterprises can mitigate the negative impact of climate change risk on enterprises' debt financing ability. The authors' current grouping regression results, especially those in column 4, are only significant at the 5% level. It is recommended that the authors use interaction terms to test hypothesis 2.

5.When analyzing the empirical results,If there are similar studies, a comparison of the results would be indicated.

6.The paper extracts climate change risks from corporate annual reports through text analysis, but this approach may be interfered with by the subjectivity and noise of the disclosure content.It is suggested that the author combine machine learning algorithms (such as natural language processing technology) for more accurate text classification and weight allocation to reduce the bias brought by manual intervention

7.The conclusion part further highlights the theoretical contributions of the research, such as how to fill the gaps in the existing literature on the relationship between climate change risk and corporate debt financing ability, and how to provide a new perspective for green finance theory.

8.In the sixth part, the author summarizes the research conclusions of this paper and lacks detailed policy recommendations. Therefore, it is suggested that the authors add more specific and actionable policy recommendations.

Comments on the Quality of English Language

The paper has a lot of Chinglish and long difficult sentences. It is suggested to further improve the language quality of the paper.

Author Response

We sincerely appreciate the reviewers' suggestions for revisions. Please refer to the attached document, where we have addressed and responded to each comment individually.

Author Response File: Author Response.pdf

Reviewer 2 Report

Comments and Suggestions for Authors

The study addresses an important and timely issue of how climate risks affect corporate finance, aligning with global trends in sustainable development. The authors examine not only the direct impact of climate risks but also the moderating role of carbon emissions, as well as the mechanisms of influence through competitiveness, default risk, and organizational resilience. The use of data from Chinese companies over 12 years ensures the representativeness of the results.

My comments of the Article:

1. Introduction. The hypotheses are formulated too broadly. For example, Hypothesis 1 ("climate risk reduces debt financing capacity") does not reflect the nuances revealed in the later analysis (e.g., differences between state-owned and private enterprises). Refine the hypotheses to align with the results of the heterogeneity analysis.
2. Literature Review and Hypotheses. The section is overloaded with citations without deep synthesis. For instance, the discussion of "transition risks" could be structured more clearly, highlighting key debates. There is a lack of critical analysis of conflicting results (e.g., why some studies show an increase in debt financing under climate risks). Add a table to systematize existing research. Explicitly identify the gaps this study aims to fill.
3. Data Selection and Model Setting. The textual analysis of annual reports may be noisy (e.g., companies might mention climate risks formally without taking real action). There is no discussion of how this affects validity. The selection of specific variables is not justified (e.g., why include Tobin’s Q and listing age but not other corporate governance indicators beyond Top1). Provide a rationale for the choice of key variables. Discuss the limitations of textual analysis and possible alternatives (e.g., data on actual climate incidents).
4. Results for different groups (e.g., state-owned and private companies) are presented without deep interpretation. For example, why are state-owned companies less sensitive? Is it due to guarantees or resource access? There is no discussion of how other factors (e.g., industry specifics) might influence the results. Enhance the interpretation of heterogeneity by linking it to theory. Add robustness checks for subgroups (e.g., only manufacturing sectors).
5. Policy and Managerial Suggestions, Conclusions. Policy Recommendations are too generic. For example, the suggestion to "enhance information disclosure" is not supported by specific mechanisms. Conclusions do not reflect the study’s limitations (e.g., Chinese data may not be generalizable to other countries). Specify recommendations for regulators (e.g., introducing mandatory climate stress tests for banks).

 

Author Response

We sincerely appreciate the reviewers' suggestions for revisions. Please refer to the attached document, where we have addressed and responded to each comment individually.

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

1.While Section 4.2 partially contextualizes findings, the empirical results overall lack sustained dialogue with prior research. The analysis should systematically compare and contrast key outcomes (e.g., effect sizes, directional patterns, methodological distinctions) with seminal and recent studies beyond this section. Explicitly positioning findings within existing scholarly debates—notably in Sections 4 —is essential to demonstrate the contribution’s significance.

2.The current sequencing of concluding sections undermines conceptual progression. Part 5 (presently labeled as policy suggestions) should be repositioned as the conclusive synthesis (Part 6), while Part 6 (currently conclusions) should instead articulate policy implications (Part 5). This restructuring—where empirical findings → conclusions → applied implications—creates a logically sequenced arc: first interpret results through scholarly lenses (Part 5), then derive actionable recommendations from validated conclusions (Part 6). Such alignment with conventional research narratives will significantly enhance reader navigation and scholarly impact.

Comments on the Quality of English Language

The manuscript requires comprehensive language refinement to meet the journal’s stylistic standards. Persistent issues with syntax, academic idiom, and technical phrasing occasionally impede clarity. We strongly advise engaging a professional editing service specializing in disciplinary academic writing to ensure grammatical precision, terminological consistency, and fluency throughout the text.

Author Response

Please refer to the attachment.

Author Response File: Author Response.pdf

Reviewer 2 Report

Comments and Suggestions for Authors

The article shows substantial improvements in addressing endogeneity, heterogeneity, and climate risk measurement. However, gaps remain in results interpretation and policy recommendations.

Abstract & Introduction. Fails to highlight the novelty of climate risk measurement (text analysis + ML). Emphasize how this overcomes geographical bias in macro-level indicators.

Literature and Hypothesis. Hypothesis 1 is overly generic. Link it explicitly to the channels tested: competitiveness, default risk, resilience.

Data Selection and Model Setting. No justification for excluding transition-risk keywords (e.g., "carbon tax") in Table 1. This undermines coverage of regulatory risks. Formula of the Carbon Emissions (Carbon) based on operational costs may distort data for service firms. Add robustness checks for non-manufacturing sectors. FinBack (executives’ finance background) lacks theoretical linkage to climate risk. Justify its inclusion.

Analysis of Empirical Results. For Cost, the CCR coefficient (0.004) in the Table 4 is statistically significant but economically trivial: a 1% risk increase raises debt costs by only 0.04%. Discuss why the effect is marginal. Interaction CCR×Carbon (-0.029 for Debt) in the Table 10 is significant, but marginal effects of emission reductions on debt capacity are missing. Include calculations. Table 11. The CCR coefficient (-0.019) lacks interpretation. E.g., "A 1 SD increase in CCR reduces Resilience by X%."

Policy and Managerial Suggestions. Recommending "satellite data for banks" is impractical without cost analysis. Suggest feasible tools (e.g., integrating CDP platform data). Support for non-SOEs mentions "financial aid" but omits mechanisms (e.g., state-backed loan guarantees).

 

Author Response

Please refer to the attachment.

Author Response File: Author Response.pdf

Round 3

Reviewer 1 Report

Comments and Suggestions for Authors

The author has carefully addressed all points raised in the initial review，The manuscript now requires only professional language editing prior to publication.I therefore recommend acceptance contingent on this minor revision.

Reviewer 2 Report

Comments and Suggestions for Authors

The authors did a good job and corrected my comments.