Digital Transformation and Corporate Carbon Emissions: The Moderating Role of Corporate Governance

Abstract

In the era of the digital modern economy, digital transformation has grown into the primary battlefield for conventional industrial competitiveness. For businesses, digital transformation is not just a future trend and requirement but also an intrinsic motivation to achieve sustainable development. The purpose of this research was to investigate the connection between digital transformation and carbon emission reduction using empirical analyses, as well as to elucidate whether the qualities of internal control, environmental disclosure, and auditing affect the connection between digital transformation and carbon emission reduction in businesses. This research used fixed-effects regression to evaluate data from China’s A-share-listed businesses from 2014 to 2023. These data suggest that corporate digital transformation may successfully reduce carbon emissions. Meanwhile, internal control quality, environmental information disclosure quality, and audit quality all have a beneficial moderating influence on corporate digital transformation and carbon emission reduction. By incorporating pertinent theories, such as digital economy theory and ecological theory, this research indicates the immediate impact of digital transformation on reducing business carbon emissions, enhances and broadens the body of knowledge on the subject, and offers methodological recommendations for reducing corporate carbon emissions and attaining rapid development. Furthermore, it provides useful recommendations on how the government, businesses, and executive teams can contribute more to digital transformation and the carbon emission reduction process. This will assist Chinese corporations in raising their own level of digital transformation and achieving ongoing improvements in the management of carbon emission reduction.