As climate-related risks become increasingly important in capital markets, carbon disclosure has emerged as a key mechanism for enhancing corporate transparency and reducing information asymmetry. However, empirical evidence on whether carbon disclosure lowers firms’ cost of equity remains inconclusive, particularly across countries with different institutional environments. This study examines the relationship between carbon disclosure and the cost of equity while investigating the moderating roles of green finance development and marketization in Asia-Pacific markets. The study analyzes publicly listed non-financial firms from five Asia-Pacific countries over the period 2016–2023 using panel data obtained from Refinitiv and the World Bank. A fixed-effects panel regression model, complemented by robustness and endogeneity tests, is employed to ensure reliable estimation. The findings reveal that carbon disclosure is significantly associated with a lower cost of equity, indicating that greater environmental transparency reduces perceived investment risk and improves firms’ access to capital. Furthermore, green finance development strengthens the beneficial effect of carbon disclosure by creating a supportive financial ecosystem for sustainable business practices. Conversely, higher levels of marketization reduce the marginal impact of carbon disclosure, suggesting that in more mature markets, investors may already have access to alternative sources of information. These findings demonstrate that the financial value of carbon disclosure depends not only on corporate reporting practices but also on institutional conditions. The study offers practical implications for corporate managers, investors, and policymakers by highlighting the importance of integrating transparent climate reporting with supportive green finance policies to promote sustainable corporate financing and long-term value creation.