The Impact of China’s Green Finance Policy on Corporate ESG Performance: Evidence from Green Finance Reform and Innovation Pilot Zone

Green finance policy plays a pivotal role in motivating enterprises to engage in environmental governance. Utilizing data spanning from 2009 to 2024, this research applies the difference-in-differences (DID) method to explore how the Green Finance Reform and Innovation Pilot Zone (GFRIPZ) policy influences the ESG performance of A-share listed companies in China. The findings reveal that the policy significantly enhances corporate ESG performance through three primary channels: alleviating financing constraints, improving profitability, and increasing green innovation capability. Moreover, the policy’s impact exhibits notable heterogeneity across regions and company types. It exerts a positive effect on ESG performance in core cities and southern regions, while its influence is negative or insignificant in non-core cities and northern regions. For high-tech and non-heavily polluting enterprises, the impact is significantly positive; however, for non-high-tech and heavily polluting enterprises, the effect is positive but statistically non-significant.