ABSTRACT Against the backdrop of escalating global environmental challenges, green finance has gained prominence as a critical instrument for advancing sustainability. This study investigates the impact and mechanisms of green credit policies on the environmental, social, and governance (ESG) performance of construction companies. Using a sample of Chinese A‐share listed firms from 2009 to 2023 and employing a Propensity Score Matching–Difference‐in‐Differences approach, the findings reveal that green credit significantly enhances the overall ESG scores of construction enterprises, primarily through green technology innovation and charitable activities. Heterogeneity analysis indicates that the policy effect is stronger in civil engineering and building construction, but limited in decoration and installation sectors. Firms in eastern China respond more strongly than those in central and western regions. The study recommends that enterprises optimize green innovation and social responsibility investments, while policymakers should strengthen regional coordination and adopt sector‐specific incentive measures.
Zhang et al. (Fri,) studied this question.