Climate Transition-Risk Salience and the Financial Relevance of Reported Green Supply Chain Management Practices: Evidence from Chinese Listed Firms

Abstract

The transition toward a low-carbon economy requires firms to extend sustainability considerations beyond their organizational boundaries and into supply chain operations. Yet the financial relevance of reported green supply chain management (GSCM) practice breadth may vary with the prominence of climate transition issues in corporate reporting. Drawing on the natural-resource-based view and the attention-based view, this study examines whether reported climate transition-risk salience (CTRS) conditions the association between reported GSCM practice breadth and subsequent accounting profitability. The analysis uses 26,132 firm-year observations from 4371 Chinese listed firms. A seven-item index of reported GSCM practice breadth and an annual-report-based measure of CTRS for 2016–2023 are linked to return on assets (ROA) in the following financial year. Firm- and outcome-year fixed-effects estimates provide qualified support for a positive average association. In the preferred controlled specification, a one-standard-deviation increase in reported GSCM practice breadth is associated with an approximately 0.17-percentage-point increase in subsequent ROA. This economically modest estimate remains sensitive to the control structure, particularly the inclusion of firm size. The moderating relationship is more consistent. The estimated association between reported GSCM practice breadth and subsequent ROA is statistically imprecise at low reported CTRS, reaches approximately 0.15 percentage points at mean salience, and increases to approximately 0.29 percentage points at the 90th percentile. The positive interaction remains stable across alternative GSCM and CTRS measures, environmental-reporting controls, temporal diagnostics, and additional fixed-effects specifications. In common-sample comparisons, the GSCM–CTRS interaction is more positive than the corresponding interactions with physical climate-risk exposure assigned according to firms’ registered provinces and cities. These comparisons remain subject to differences in risk content and measurement level. The findings identify reported climate transition-risk salience as a boundary condition for the association between reported GSCM practice breadth and subsequent profitability. This conditional perspective connects supply chain sustainability with the firm’s reported climate transition context while preserving the distinction between reported practice breadth and implementation quality.