{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,5,12]],"date-time":"2026-05-12T07:20:18Z","timestamp":1778570418275,"version":"3.51.4"},"reference-count":41,"publisher":"MDPI AG","issue":"1","license":[{"start":{"date-parts":[[2025,12,24]],"date-time":"2025-12-24T00:00:00Z","timestamp":1766534400000},"content-version":"vor","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/licenses\/by\/4.0\/"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["Systems"],"abstract":"<jats:p>Climate shocks are increasingly recognized as systemic stressors that disrupt financial stability and undermine sustainable development. Using a comprehensive panel of Chinese listed firms from 2007 to 2023, this study examines how physical climate shocks propagate through the financial system. Specifically, we investigate their impact on elevating stock price crash risk and impairing corporate sustainability. We construct a firm-level physical climate risk indicator by applying machine learning and text analysis to annual reports. The empirical evidence demonstrates that climate shocks significantly increase stock price crash risk, indicating heightened systemic vulnerability within the financial system. Mechanism analysis identifies two key transmission channels linking climate shocks to crash risk: tightened liquidity constraints and diminished risk-taking capacity. Furthermore, we find that firms with stronger green transformation efforts exhibit lower sensitivity to climate-induced crash risk. This highlights the crucial role of green initiatives in enhancing institutional and financial resilience. Additional analyses reveal that the rise in crash risk subsequently weakens corporate sustainable development performance. Overall, these findings provide micro-level evidence of how climate shocks generate asymmetric effects within the financial system. The study concludes with policy implications for strengthening climate resilience, stabilizing capital markets, and advancing sustainability in emerging economies.<\/jats:p>","DOI":"10.3390\/systems14010018","type":"journal-article","created":{"date-parts":[[2025,12,24]],"date-time":"2025-12-24T11:22:14Z","timestamp":1766575334000},"page":"18","update-policy":"https:\/\/doi.org\/10.3390\/mdpi_crossmark_policy","source":"Crossref","is-referenced-by-count":1,"title":["Climate Shocks, Stock Price Crash Risk, and Corporate Sustainability: Evidence from China\u2019s Financial System"],"prefix":"10.3390","volume":"14","author":[{"given":"Tian","family":"Liu","sequence":"first","affiliation":[{"name":"Faculty of Business and Economics, Monash University, Melbourne, VIC 3145, Australia"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"ORCID":"https:\/\/orcid.org\/0000-0002-6642-1268","authenticated-orcid":false,"given":"Wei","family":"Zhao","sequence":"additional","affiliation":[{"name":"IEMS, Department of High-Tech Business and Entrepreneurship, Faculty of Behavioral, Management and Social Sciences, University of Twente, 7522 NB Enschede, The Netherlands"},{"name":"Faculty of Business Administration, Turiba University, LV-1058 Riga, Latvia"}],"role":[{"role":"author","vocabulary":"crossref"}]}],"member":"1968","published-online":{"date-parts":[[2025,12,24]]},"reference":[{"key":"ref_1","doi-asserted-by":"crossref","first-page":"1795","DOI":"10.1111\/joes.12673","article-title":"Climate risk analysis: Definitions, measurements, strategies, and sectoral impacts","volume":"39","author":"Huang","year":"2025","journal-title":"J. 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