Frontiers in Business, Economics and Management 
ISSN: 2766-824X | Vol. 18, No. 3, 2025 

 

142 

Carbon Finance, ESG Performance and Corporate Green 
Transformation and Upgrading 

-- Survey evidence from 484 manufacturing enterprises in Zhejiang Province 

Xinyi Zhaoi a, Xingchao Ma b 

School of Economics and Management, Zhejiang Normal University, Jinhua, 321004, China 

a2042495779@qq.com, bmxc0807@163.com 

 

Abstract: Promoting green transformation and upgrading of manufacturing enterprises is an important way to solve the global 
energy crisis and climate change, and achieve the goal of carbon peak and carbon neutrality. Based on the multi-stage probability 

sampling survey of manufacturing enterprises in the National Green Reform and Innovation Experimental Zone of Zhejiang 

Province, this paper collects first-hand micro enterprise data, and then examines the impact and transmission mechanism of 

carbon finance on the green transformation and upgrading of manufacturing enterprises from the perspective of enterprise ESG 

performance. Empirical research part, in this paper, the integrated use of multivariate linear model and instrumental variabl e 

method analysis found that carbon finance effectively promote the manufacturing enterprise green transition and upgrade; 

Heterogeneity analysis shows that the more developed the regional economy is, the larger the enterprise scale is and the lower 

the enterprise technology level is, the greater the promotion effect of carbon finance on the green transformation and upgrading 

of manufacturing enterprises is. Further, the mediating effect model and structural equation model were used to identify the 

transmission mechanism, and it was found that carbon finance promoted the green transformation of manufacturing enterprises 

by improving corporate social governance and environmental governance. Carbon finance promotes the upgrading of 

manufacturing enterprises by improving corporate governance and environmental governance. The findings of this paper provide 

empirical evidence and practical implications for improving the ESG performance of enterprises through financial means, thus 

promoting the green transformation and upgrading of manufacturing enterprises. 

Keywords: Carbon finance, ESG performance, Green transformation, Enterprise upgrading, Influence effect, Transmission 
mechanism. 

 

1. Introduction and Literature Review 

Embroidery is a famous intangible cultural heritage in ChIn 

the face of complex challenges such as global climate change 

and energy crisis, achieving green transformation and high-

quality development has become a global issue (Tang Y et al., 

2024). In this context, the Chinese government put forward 

the financial support to the development of green low carbon 

high quality special strategy, has been clear about the promote 

social comprehensive green transformation and upgrading of 

carbon up to the peak, carbon neutral roadmap. At the same 

time, on the journey towards the "dual carbon" strategy, as the 

most basic cell of social economy, enterprises undertake the 

social responsibility for the sustainable development of 

economy, environment and society (Archie B.Carroll, 2021). 

Among them, ESG is regarded as an important action guide, 

and the economic benefits obtained through "greening" and 

the social benefits of environmental responsibility in the field 

of social and ecological security are regarded as potential 

driving forces (An, 2021), to obtain a healthy growth 

environment, substantial competitive advantages and 

development potential (Xie, 2022). Carbon finance is the 

product of financial innovation in the development of low-

carbon economy (Chu, 2010). As an important pillar under the 

framework of green and low-carbon transformation strategy, 

it can play a key role in achieving the goal of carbon emission 

reduction through the application of financial tools and 

strategies (Yan, 2024). 

With the continuous and steady development of China's 

carbon market and the increasingly active carbon trading, the 

academic discussion on carbon finance is also deepening. At 

present, the specific significance of carbon finance in the 

academic circle can be divided into broad sense and narrow 

sense. The broad sense of carbon finance refers to investment 

and financing behaviors that can alleviate environmental and 

climate problems (Zhengzhong W, 2022), while the narrow 

sense of carbon finance focuses on options or futures related 

to carbon emission rights (Liu Zhuowei, 2023). As the core 

subject of social green development, accelerating green 

transformation and upgrading in a dynamic environment is 

the only way for enterprises to debug and solve their own 

survival and development problems (XingF, 2024). Although 

people generally associate the two concepts of transformation 

and upgrading, there are some differences between them 

(Gong Q, 2023). Pay more attention to green transformation 

is the enterprise from the traditional mode of production to 

high pollution and high energy consumption of low carbon, 

environmental protection, sustainable production mode 

transformation process, and upgrade emphasis is the 

enterprise innovation ability, technology improvement, 

learning pursued and the allocation of resources to improve 

(Liu Mengmeng, 2025). Low degree of the current domestic 

carbon market financialization of overall (Yao Dengbao etc., 

2024), and the existing discussion of carbon finance, mainly 

concentrated in the carbon market construction as well as the 

influence on regional carbon emissions, little effect on 

enterprise low carbon development and transformation and 

upgrading of quantitative research, based on micro data 

transmission mechanism of enterprise level identification test 



 

143 

is scarce. In view of this, this article aims to from carbon 

financial drive enterprise green on the path of transformation 

and upgrading, to deeply research in the field. Specific 

research questions include: under the background of "dual 

carbon", does carbon finance effectively promote the green 

transformation and upgrading of enterprises? What is the 

relevant path mechanism? What are the differences in the 

application of carbon finance in different industries and scales 

of enterprises, and what are the optimization and 

improvement paths? 

The marginal contribution of this paper is mainly reflected 

in the following three aspects: (1) Anchoring the leading role 

of carbon finance in the process of enterprise transformation, 

opening a new perspective to study the relationship between 

carbon finance and enterprise green transformation and 

upgrading, and injecting new theoretical vitality and in-depth 

analysis into transition economics. (2) use the micro 

perspective, the carbon financial measure as a relatively 

subjective variables, penetration, participation, interactive 

degrees as measure, to quantify the level of carbon financial 

processing, the empirical test effect of carbon financial green 

transformation and upgrading of the enterprise. Thirdly, 

through the empirical analysis, it is concluded that the 

transmission paths of corporate environmental governance, 

social governance and corporate governance can affect the 

carbon finance to drive the green transformation and 

upgrading of enterprises to varying degrees. It has important 

policy value to understand the policy effect of the national 

Green Finance Reform and Innovation Pilot Zone, improve 

the policy design to improve the level of enterprise green 

transformation and upgrading and promote the development 

of "dual carbon". 

2. Theoretical Analysis and Hypothesis 
Derivation 

Carbon finance is an important engine to promote the 

development of low-carbon economy and energy structure 

transformation (Ren et al., 2025). On the one hand, carbon 

finance provides capital supply for the development of 

enterprises and achieves financial integration (Yao X, 2024); 

Carbon finance, on the other hand, the enterprise of "green" 

into the investment and financing decisions, carbon finance to 

tilt in the field of green low carbon, cause pollution of the 

financial resources flow from polluting enterprises to the 

enterprise, increased the difficulty of polluting enterprises to 

obtain financial resources, the use of its functions of financing 

constraints (xiao-xiao zhou, etc., 2023). In order to obtain 

environmental qualification recognition from authoritative 

authorities and obtain more green credit, enterprises carry out 

green transformation and transformation (Zhou et al., 2022), 

and improve their own performance (Wang et al., 2023). 

Therefore, the research hypothesis is put forward as follows: 

H1: Carbon finance plays a direct positive role in the green 

transformation of enterprises 

Corporate environmental governance mainly examines the 

impact of enterprises on the environment and their 

contribution to environmental protection. Hong et al. (2024) 

concluded that carbon finance influences corporate 

environmental governance through two paths: financial 

instruments and market. That is, through carbon forward, 

carbon futures, carbon options and carbon swaps and other 

economic and financial means to guide capital flow to clean 

and environmental protection projects, further guide 

enterprises to take the initiative to reduce carbon emissions to 

obtain economic benefits. Under the regulation of carbon 

financial market mechanism, enterprises can be encouraged 

to improve their ability of environmental governance, reduce 

the emission of pollutants, and help achieve the purpose of 

environmental protection (Chen S, 2024). At the same time, 

from the perspective of long-term development, carbon 

finance will guide funds to carbon emission reduction and 

sustainable development projects, creating conditions for 

enterprises to achieve green production (Chen et al., 2023). 

Therefore, the research hypothesis is put forward as follows: 

H1a: Environmental governance is the transmission path of 

carbon finance to promote corporate green transformation 

Enterprise positive social responsibility in the process of 

economic development, the attention to interact with the 

community, employees and suppliers and other stakeholders 

(Chen J, 2023). There is a certain crowding-out effect in the 

transformation and technological innovation investment of 

enterprises with high energy consumption (Wang et al., 2022). 

And development of carbon finance is a good way to ease the 

financing constraints of crowding out, help enterprises to find 

and social common FaZhanDian, improve the ability of social 

governance, sustainable development. From the perspective 

of fulfilling social responsibility, enterprises take on the social 

responsibility and mission of leading economic and social 

development by responding to social policies (Qi, 2023). 

Based on this, carbon finance not only serves the economy, 

but also plays a certain role in strengthening social 

supervision and facilitating the green transformation of 

enterprises. Therefore, the research hypothesis is put forward 

as follows: 

H1b: Social governance is the transmission path of carbon 

finance to promote corporate green transformation 

The establishment and operation of internal organizational 

structure, power distribution, decision-making mechanism 

and supervision mechanism are the core of corporate 

governance (Marcellin M, 2023). In order to meet the needs 

of relevant departments' supervision and their own 

sustainable development, enterprises will invest in improving 

resource utilization efficiency, reducing pollutant emissions 

and improving internal governance after receiving green 

finance support (Cao et al., 2024). 

In this process, carbon finance promotes the expansion of 

corporate ESG from governance structure to economic 

governance tools and means, among which governance 

structure is the key to corporate sustainable development (Yu 

et al., 2022). The formation of corporate carbon finance risk 

management experience also needs to be realized in the 

process of green transformation (Wu, 2024). Therefore, the 

research hypothesis is put forward as follows: 

H1c: Corporate governance is the transmission path of 

carbon finance to promote corporate green transformation 

Enterprises respond to the changing external environment 

and customer needs through innovation and upgrading (Wang, 

2021). Under the green development mode, three major 

priorities are put forward for enterprises: high production 

efficiency, energy saving and green expansion. Zhu et al. 

(2022) proposed that the introduction of carbon finance can 

promote corporate innovation. Faced with the requirements of 

carbon emission restrictions, enterprises need to find more 

efficient and low-carbon production methods. This will give 

rise to new technological and innovative solutions, and 



 

144 

promote the upgrading and reform of enterprises in 

technology R&D, product design and management (Du et al., 

2019). At the same time, Jing C et al. (2021) argued that 

financial services need to adapt to different stages of 

enterprises, and there is a dynamic coordination relationship 

between them. Therefore, the research hypothesis is put 

forward as follows: 

H2: Carbon finance plays a direct positive role in corporate 

upgrading 

By strengthening ESG environmental governance, carbon 

finance can effectively promote enterprises to achieve 

upgrading. Song et al. (2021) pointed out that financial 

development provides investment and financing assistance 

for units tackling clean and environmental protection 

technologies, which can produce a structural effect of 

reducing carbon emissions and solve regional environmental 

pollution problems. Using the economic bar to push up the 

financing cost of high-polluting enterprises, it forces high-

polluting enterprises to upgrade and transform, to achieve 

environmental pollution control (Leyuan Y, 2023). From an 

empirical perspective, it is found that carbon finance can 

encourage enterprises to carry out green innovation, and 

promote the adoption and development of green technology 

(Wen Yang, 2023). Therefore, the research hypothesis is put 

forward as follows: 

H2a: Environmental governance is the transmission path of 

carbon finance to promote enterprise upgrading 

Carbon finance supports enterprises to attach importance to 

environmental protection and fulfill their social 

responsibilities. From the perspective of society, according to 

Porter's competitive advantage theory, it will be a win-win 

strategy for enterprises to seek their own interests while 

balancing social interests. Under the operation mechanism of 

carbon financial market, actively participating in low-carbon 

upgrading can enhance the social image and reputation of 

enterprises and attract the favor of consumers and investors 

(Li et al., 2023). Carbon finance can optimize the allocation 

of resources, ease the financing constraints of enterprises, 

provide funds for the upgrading of green industrial structure, 

support enterprises to fulfill social responsibilities and 

improve corporate social governance (Zhang, 2023). 

Therefore, the research hypothesis is put forward as follows: 

H2b: Social governance is the transmission path of carbon 

finance to promote enterprise upgrading 

Good corporate governance helps companies better 

respond to environmental challenges and achieve low-carbon 

development and corporate upgrading. In the process of 

corporate financing, investment and financing parties are in 

different transaction positions, and the lack of corresponding 

disclosure channels and supervision will cause information 

dislocation, which will have a negative impact on investors 

(Tawfiq T, 2024). With the support of green finance, 

enterprises can send signals of green development and 

emphasis on environmental protection to the outside world. 

Since external investors lack information on corporate 

governance and development level, this signal can attract 

investors' attention to invest in corporate development (Wen, 

2023). In addition, the development of carbon finance will 

also have a significant impact on the total factor productivity 

of enterprises, helping enterprises to improve the level of 

corporate governance and realize the upgrading of enterprises 

(Hu Yizhuo, 2022). 

H2c: Corporate governance is the transmission path 

through which carbon finance promotes corporate upgrading 

3. Research Design 

Traditional embroidery art still has wide application value 

in contemporary fashion design. For modern fashion design, 

it still has a very strong sound. First, we need to break the 

integrity of the design. Traditional embroidery art is often lack 

of abstractness, and the pattern image is very complete, but it 

has the characteristics of rigidity. It is not conducive to the 

long-term promotion of traditional ideas, and modern fashion 

design in the process of integration must break through the 

limitations of traditional embroidery, the integrity of the 

continuous to be broken, in order to innovate. For fashion 

designers, we can divide the patterns properly and pick up the 

relevant comData sources 

This paper introduces the design effect deff to determine 

the sample of relevant enterprises distributed in the survey 

area. The sample size is based on simple random sampling, 

the confidence interval is 95%, and the marginal error E is 

generally not more than 0.1. In this paper, the value of E is 

0.06. Since the population proportion is unknown, the 

maximum value of (1-P) is 0.5, 1.96, then the sample size is: 

PPza∕2 = 

𝑛0 =
t2p(1−p)/r2

1+
1

N
(

t2p(1−p)

d2
−1)

               

Considering that the efficiency of multi-stage sampling is 

lower than that of simple random sampling, the design effect 

of this paper is a relatively high value of 1.2, so the sample 

size is: 

n1 = n0  × Deff = 462              

Considering the validity of the questionnaires distributed 

and the limitations of the funds, whose recovery rate is 

generally 90%, the actual number of questionnaires 

distributed is 514. =According to the proportion of enterprises 

in different regions, the corresponding sample size was 

calculated to determine the corresponding number of 

questionnaires distributed in different regions. The specific 

distribution method was np/P*N. Finally, 530 questionnaires 

were distributed, and 484 valid questionnaires were collected, 

with an effective rate of 91.2%, which better met the 

international requirements for questionnaire efficiency. 

3.1. Description of Variables 

3.1.1. Explanatory variable - Carbon finance 
By referring to the scale of inclusive finance of the Central 

Bank of China and the processing method of Shen and Liao 

(2020), this paper discusses the penetration, utility and 

interaction of carbon finance: (1) penetration: companies' 

perception, system understanding, frequency of use and 

recommendation intention of carbon finance; (2) Utility: the 

company's carbon emission monitoring, carbon emission 

management, carbon emission optimization and carbon 

market participation; (3) Interaction degree: corporate carbon 

finance ecology, publicity activities, cooperation 

opportunities and corporate interaction. 

3.1.2. Explained variable: green transformation 
Referring to the research of Wu Fei and Li Wei (2022) on 

the core words of corporate green transformation, this paper 

takes green system transformation, green action 

transformation and green guarantee transformation as 



 

145 

dependent variables for calculation: (1) Green system 

transformation: the changes implemented by enterprises in 

business philosophy, strategic planning, production process, 

products and services; (2) Green action transformation: the 

actions taken by enterprises in operation mode, resource 

utilization, environmental protection measures and 

development practice; (3) Green guarantee transformation: 

the guarantee undertaken by enterprises in management 

system, strategic model, management regulations and 

corporate culture. 

3.1.3. Explained variable: enterprise upgrading 
This paper mainly refers to the classification method of 

enterprise upgrading by Yu Donghua (2018), and measures 

enterprise upgrading from three aspects: enterprise structure, 

performance level and product value: (1) enterprise structure: 

the composition and distribution of employees in the 

enterprise environmental department; (2) Performance level: 

the quantitative evaluation of a company's achievement of its 

green strategic goals and operational efficiency within a 

certain period of time; (3) Product value: the degree to which 

consumers recognize the quality, function, design and service 

attributes of their green products. 

3.1.4. Mediating variable: ESG performance 
This paper refers to the discussion of Yuan Ronli et al. 

(2022) on ESG research, draws on the 35 key ESG issues of 

enterprises in the three categories of environment, society and 

company in the index system of MSCI's ESG rating model, 

and finds that the governance capacity of enterprises is mainly 

reflected in three dimensions: environmental governance, 

social governance and corporate governance. The behavior of 

water conservation, waste discharge, clean energy use and 

recycling in the process of production and operation; (2) 

Social governance: the implementation effect of the 

enterprise in product quality and safety, social welfare, 

employee welfare and health, and supply chain management; 

(3) Corporate governance: the company's organizational 

structure, business performance, information disclosure, risk 

management. 

3.1.5. Control variables 
In order to exclude other factors affecting the green 

transformation and upgrading of enterprises, this paper takes 

enterprise characteristics as control variables to avoid 

interference in the empirical analysis based on the existing 

literature. The specific indicators designed in this paper 

include enterprise region, enterprise size, organizational form 

and industry type, to enhance the scientific and accurate 

research conclusions 

3.2. Analysis of Regression Results 

This paper uses multiple regression model to explore the 

impact of carbon finance on green transformation and 

enterprise upgrading, and the specific regression equation 

constructed is as follows: 

{
G_Transformation = ∂1 · C_Finance + ∑ Control

n
σ=2 · aσ + ε

E_Upgrade = γ1 · C_Finance + ∑ Control
n
σ=2 · γσ + ε

                          

Note: is green transformation, is enterprise upgrading, is 

carbon finance, and Control is the control 

variable.G_TransformationE_UpgradeC_Finance 

After the data is standardized, after excluding the 

interference of all control variables such as enterprise region, 

enterprise size and industry type, carbon finance has a 

significant role in promoting the green transformation and 

upgrading of enterprises 

3.3. Endogeneity Analysis 

In the above verification, the factors affecting enterprise 

transformation and upgrading were controlled as much as 

possible, but theoretically, there are still other variables that 

cannot be solved or observed to have an impact on enterprise 

green transformation and upgrading, resulting in omitted 

variable bias; At the same time, enterprises may obtain 

financial support by participating in the carbon financial 

market for green transformation measures such as 

environmental protection technology innovation and energy 

efficiency improvement. In addition, since the carbon 

financial market usually gives more attention and support to 

enterprises with environmental protection and sustainable 

development, the green transformation and upgrading of 

enterprises may also increase their participation in the carbon 

financial market. As a result, the explanatory variable and the 

explained variable are mutually dependent, resulting in 

endogeneity problems. 

In addition, participation in the use of carbon finance is the 

result of enterprises' independent choice, which has certain 

endogeneity. Therefore, in order to alleviate the endogeneity 

problem to the greatest extent, this paper adopts the 

instrumental variable method to solve the endogeneity 

problem. The more a company knows about carbon finance, 

the stronger its willingness to participate in carbon finance. 

However, whether it knows about carbon finance does not 

directly affect its green transformation and upgrading. 

 

Table 1. Estimation results of instrumental variables 

Variables 

2SLS 

Stage 1 Stage 2 Stage 1 Stage 2 

C_Finance Green Transition C_Finance Enterprise upgrade 

PEN 
0.126 ***  0.126 ***  

(0.11)  (0.11)  

C_Finance 
 0.521 ***  0.497 *** 

 (0.04)  (0.06) 

Control variables Control Control Control Control 

F-statistic 28.72 *** 28.72 *** 

Wald statistic 45.32 *** 39.67 *** 

Observation index 484 484 

 

Table 1 presents the regression results using instrumental variables. The regression results show that after fully 



 

146 

considering the endogenous bias of the model, the 

understanding of carbon finance is selected as the 

instrumental variable in this paper, which is reliable to some 

extent, and there is no weak instrumental variable problem. 

Therefore, the null hypothesis H1 and H2 are valid. 

3.4. Heterogeneity Analysis 

3.4.1. Regional heterogeneity 
There is a strong correlation between carbon finance and 

the degree of green development and the level of economic 

development. Geographical location has an important impact 

on the transformation and upgrading of enterprises. The level 

of economic development, the degree of industrial 

agglomeration and the degree of government policy support 

in different regions determine the convenience of enterprises 

in terms of business environment, market contact and 

resource access. According to the model results, carbon 

finance has a significant promotion effect on promoting the 

green transformation and upgrading of enterprises in some 

regions. Specifically, carbon finance has played the biggest 

role in promoting the green transformation and upgrading of 

enterprises in Kecheng District, while for enterprises in 

Changshan County, the promotion effect of carbon finance is 

not significant. 

3.4.2. Heterogeneity of scale 
The research of Ye and Wu (2010) proved that in the 

transitional economy scenario, large enterprises will increase 

investment in environmental management in order to gain 

social reputation and social performance compared with small 

and micro enterprises. The results show that carbon finance 

has heterogeneous effects on promoting the green 

transformation of enterprises of different sizes. Among them, 

large and medium-sized enterprises have the most significant 

promotion effect. 

3.4.3. Industry heterogeneity 
Low-tech manufacturing is labor-intensive. It has weak 

innovation ability and R&D investment, often uses traditional 

processes and old equipment, and has high carbon emissions 

and energy consumption. According to the model results, 

carbon finance has heterogeneous effects on promoting green 

transformation and upgrading of low -, medium - and high-

tech manufacturing enterprises. Specifically, the promotion 

effect of carbon finance on low-technology manufacturing 

enterprises is the most significant. However, for high-tech 

enterprises, the promotion effect of carbon finance is not 

significant. 

4. Analysis of Impact Mechanism 

4.1. Mediating Mechanism Analysis 

In terms of the impact of carbon finance on green 

transformation, this paper builds three paths based on three 

mediating variables, and the mediating effect data of each 

transmission path are shown in Table 2. 

 

Table 2. Test results of the transmission mechanism of green transition 

Variables 

Benchmark 
Environmental 

governance 
Social governance Corporate governance 

green 

Transformation 

Environmenta

l governance 

Green 

transform

ation 

Social 

governanc

e 

Green 

transform

ation 

Corporate 

governance 

Green 

transform

ation 

Carbon finance 
0.549 ** 0.515 ** 0.260 ** 0.495 ** 0.260 ** 0.547 ** 0.260 ** 

(14.164) (12.451) (5.715) (12.709) (5.715) (13.786) (5.715) 

Mediating variable 
  0.172 **  0.188 **  0.196 ** 

  (4.266)  (4.413)  (4.547) 

Control variables Control Control Control Control Control Control Control 

R^2 0.284 0.235 0.242 0.273 0.405 0.284 0.235 

Total effect 0.549 ** 

Mediating effect value 0.089 0.093 0.107 

Direct effect 0.260 ** 0.260 ** 0.260 ** 

 

Table 3. Test results of the transmission mechanism of enterprise upgrading 

Variables 

Benchmark Environmental governance Social governance Corporate governance 

Business 

Upgrading 

Environmental 

governance 

Enterprise 

upgrading 

Social 

governance 

Enterprise 

upgrading 

Corporate 

Governance 

Corporate 

upgrading 

Carbon finance 
0.294 ** 0.515 ** 0.294 ** 0.495 ** 0.294 ** 0.547 ** 0.294 ** 

(6.410) (12.451) (6.410) (12.709) (6.410) (13.786) (6.410) 

Mediating variable 
  0.198 **  0.175 **  0.153 ** 

  (4.879)  (4.072)  (3.536) 

Control variables Control Control over Control Control Control Control Control 

R^2 0.296 0.233 0.240 0.272 0.401 0.296 0.233 

Total effect 0.567 ** 

Mediating effect value 0.102 0.087 0.084 

Direct effect 0.294 ** 0.294 ** 0.294 ** 

 

According to the mediating effect results, carbon finance 

has a significant positive impact on promoting the green 

transformation of enterprises. In terms of social governance 

and environmental governance, carbon finance plays a 

significant role in promoting the green transformation of 

enterprises. 

In terms of the impact of carbon finance on enterprise 

upgrading, this paper builds three paths based on the three 

mediating variables, and the mediating effect data of each 

transmission path are shown in Table 3. 

According to the results of mediating effect, carbon finance 

has a significant positive impact on promoting enterprise 



 

147 

enterprise upgrading. From different perspectives, in terms of 

corporate governance and environmental governance, carbon 

finance has a significant role in promoting enterprise 

upgrading, while its impact on social governance is relatively 

limited. Therefore, enterprises should further deepen the 

social application of carbon finance in corporate sustainable 

development. 

4.2. Robustness Test 

Since the traditional statistical analysis method cannot 

properly deal with the six latent variables of carbon finance, 

environmental governance, social governance, corporate 

governance, green transformation and enterprise upgrading 

studied in this paper, while the structural equation model can 

well deal with these latent variables and their indicators at the 

same time, this paper selects the structural equation model for 

robustness test, and the structural equation theoretical model 

4.3. Confirmatory Factor Analysis (CFA) Was 
Used 

Confirmatory factor analysis was performed on 6 latent 

variables and 22 observed variables, and the structural 

validity test. All the model fitting indexes met the standards. 

 

Table 4. Goodness-of-fit index table of confirmatory factor model 

 x^2/df GFI RMSEA RMR CFI NFI NNFI 

value 2.55 0.91 0.06 0.04 0.96 0.94 0.95 

Standard <3 >0.9 <0.10 <0.05 >0.9 >0.9 >0.9 

Fit results Ideal Ideal Ideal Ideal Ideal Ideal Ideal 

 

The factor loads of all latent variables corresponding to 

each topic in the model are more than 0.7, which indicates 

that each latent variable corresponding to the topic has a good 

representativeness. In addition, the average variance variation 

AVE of each latent variable was greater than 0.5, and the 

combined reliability CR was greater than 0.75, indicating that 

the convergent validity was ideal. 

4.4. Confirmatory Factor Analysis Was 
Performed 

AMOS was used to analyze the data and solve the structural 

equation model, and the results were verified. At the same 

time, the packaging dimension also includes the 

corresponding topic scope. The following table shows the 

fitting results of the relationship between latent variables and 

explicit variables. 

 

Table 5. Fitting results of structural equation model 

 x2/df TLI NFI CFI RMSEA SRMR 

Model value 3.367 0.919 0.907 0.914 0.074 0.0638 

Standard value < 5 > 0.9 > 0.9 > 0.9 < 0.08 < 0.08 

Fitting results Ideal Ideal Proximity Ideal Ideal Ideal 

 

Table 6. Path and mediating effect analysis table 

The path 
Effect 

size 

Boost 

SE 

Bias-Corrected 

95%CI 
Test 

Results 
Lower Upper 

Carbon 

Finance 
0.64∗∗∗
→           

Society 

Governance 
0.12∗∗∗
→           

green 

Transformation 
0.5271 0.029 0.0508 0.1238 Significant 

Carbon 

finance 
0.62∗∗∗
→           

The Company 

Governance 
0.11    
→          

green 

Transformation 
0.0682 0.026 -0.0172 0.1192 

Don't 

significant 

Carbon 

finance 
0.67∗∗∗
→           

Environment 

Governance 
0.19∗∗∗
→           

green 

Transformation 
0.4964 0.034 0.0340 0.1684 Significant 

Carbon 

finance 
0.62∗∗∗
→           

Society 

Governance 
0.09   
→         Corporate upgrading 0.0558 0.028 -0.0009 0.1107 

Don't 

significant 

Carbon 

finance 
0.63∗∗∗
→           

The Company 

Governance 
0.16∗∗∗
→           Corporate upgrading 0.3462 0.034 0.0185 0.1432 Significant 

Carbon 

finance 
0.66∗∗∗
→           

Environment 

Governance 
0.14∗∗∗
→           Corporate upgrading 0.3688 0.031 0.0168 0.1458 Significant 

Table 5 shows that all indicators are good, indicating that 

the overall reliability of the model is high, and it can well 

reflect the practical problems, that is, the above hypotheses 

can be effectively supported. So far, we have completed the 

fitting results of the relationship between latent variables and 

explicit variables, and the fitting results of the relationship 

between latent variables are shown in Table 6. 

5. Analysis of Results 

Carbon finance has a significant positive impact on 

promoting the green transformation and upgrading of 

enterprises. From different perspectives, in social governance, 

corporate governance, environmental governance and other 

aspects, carbon finance has a significant role in promoting the 

green transformation and upgrading of enterprises. This 

shows that carbon finance plays an important role in the 

process of sustainable development of enterprises, to promote 

the development of enterprises in a more environmentally 

friendly and sustainable direction. 

However, in terms of enterprise upgrading, the impact of 

carbon finance on social governance is not significant, and in 

terms of green transformation, the impact of carbon finance 



 

148 

on corporate governance is not significant. This shows that in 

the process of enterprise upgrading, the role of carbon finance 

in social governance is relatively limited, and in the process 

of green transformation, the role of carbon finance in 

corporate governance is relatively limited. Enterprises need to 

further explore other factors or take other measures to achieve 

better results. 

 
Figure 1. Schematic diagram of the results of structural equation theory model 

6. Conclusion 

6.1. We Will Optimize the Carbon Finance 
Ecosystem and Continue to Stimulate New 

Drivers of Enterprise Transformation and 

Upgrading  

Carbon finance will provide important support for China's 

high-quality economic development. Compared with 

traditional finance, carbon finance is more flexible, targeted 

and adaptable, and can meet the financial needs of economic 

and energy structure transformation, especially the 

transformation of key traditional "carbon intensive" sectors, 

in a larger scope and on a larger scale, and support the 

transition of carbon intensive and high environmental impact 

economic activities to low and zero carbon along a clear path. 

The government can consider granting preferential tax 

policies to enterprises that issue carbon transition bonds, such 

as exempting bond interest income tax or preferential 

corporate income tax policies, to further reduce financing 

costs and enhance the motivation of transformation and 

upgrading of enterprises. 

6.2. Differentiated Policies Should Be 
Formulated to Promote the Coordinated 

Development of Carbon Finance Regions 

In order to promote the coordinated development of carbon 

finance regions, a number of strategies need to be adopted. 

First, differentiated policies should be formulated according 

to the characteristics of different regions, considering factors 

such as carbon emission reduction potential, industrial 

structure and economic development level, and providing 

more support and incentives, including reducing carbon 

trading costs and setting up special funds for carbon finance. 

Secondly, a carbon finance cooperation mechanism should be 

established to strengthen information sharing, coordination 

and cooperation among local governments, and promote 

experience sharing and cooperation and exchange. Finally, we 

should build a carbon trading platform and a carbon credit 

system to provide enterprises and investors with services such 

as carbon trading and carbon asset appraisal, and formulate 

carbon trading rules and systems that are in line with the 

actual situation in the region. 

6.3. We Will Strengthen the Efficiency of ESG 
Governance and Promote the Green 

Transformation and Upgrading of 

Enterprises 

As a powerful engine for enterprises to achieve green 

transformation and upgrading, ESG governance provides 

strong support for sustainable development. In order to 

improve their ability to fulfill social responsibilities and 

sustainable development benefits, enterprises need to 

establish a sound ESG management system to ensure that 

their social responsibilities are fully fulfilled; Strengthen 

employee benefits and training to enhance employee 

engagement and sense of belonging, while focusing on 

diversity and inclusion; Actively participate in social welfare 

undertakings, give back to society and promote social 

progress; Promote the sustainable development of the supply 

chain, pay attention to the social responsibility performance 

of partners, and promote the sustainability of the whole 

supply chain; Strengthen communication and cooperation 

with stakeholders, build relationships of mutual trust, and 

jointly solve social and environmental problems 



 

149 

Acknowledgements 

National Social Science Funds of China (Grant no. 

19CJY014) 

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