Climate Regulations and Corporate Demand for ESG Talent

Climate regulations aimed at environmental protection can reshape the corporate workforce. Employing a comprehensive dataset of online job postings and a difference in-differences framework, we document that highly polluting Chinese firms boost their demand for employees with green skills after China introduces its first environmental tax law. This effect is stronger in provinces with higher environmental tax rates. Moreover, the increase in firms’ demand for green talent intensifies if they receive extensive public attention or have abundant financial resources. Polluting firms with historically lower green hiring rates than their peers exhibit the greatest surge in this demand, suggesting that environmental taxes facilitate the green transition of greenlagging polluters.