High‐Temperature Risk and Corporate Social Responsibility in China

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Abstract
In the context of global climate change, this study examines the performance of corporate social responsibility (CSR) in response to increasing high‐temperature risk. Using data from Chinese listed firms from 2010 to 2020, we find that companies located in cities with higher climate risk exhibit a marked improvement in their CSR practices, and this conclusion is robust after conducting a series of robustness tests. Moreover, high‐temperature risk has a greater impact on CSR for companies that face higher financing costs, have a high equity concentration, or are particularly temperature‐sensitive. This study also provides evidence that increased exposure to high temperatures causes a decline in firms' financial performance, and the heightened CSR lessens such negative effects. These findings indicate the importance for both policymakers and firms to increase their awareness of climate risks, with a specific focus on integrating CSR strategies to enhance climate resilience.

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