Corporate ESG Greenwashing Governance Under Fiscal–Financial Policy Coordination: Evidence from a Quasi-Natural Experiment of the Green Loan Interest Subsidy Policy

As sustainable finance continues to advance, an important question is how scientifically designed and well-targeted policies can curb corporate ESG greenwashing and improve the quality of firms’ ESG and sustainability disclosure. From the perspective of fiscal–financial policy coordination, we exploit the green loan interest subsidy policy (GLIS) as a quasi-natural experiment and develop an analytical framework around four policy components: commercial banks’ information screening, local governments’ green screening, the subsidy instrument’s leverage and certification effects, and firms’ internal green governance. Within this framework, we examine whether the GLIS can restrain corporate ESG greenwashing. Using Chinese listed firms from 2009 to 2022 as the sample and identifying the effect through a multi-period difference-in-differences (DID) model, we find that the GLIS significantly curbs corporate ESG greenwashing. In exploring the underlying channels, we find that the GLIS curbs corporate ESG greenwashing by strengthening commercial banks’ information screening, enhancing local governments’ green screening, easing firms’ external financing constraints, and reinforcing firms’ internal green governance. Further analysis indicates that the inhibitory effect of the GLIS on corporate ESG greenwashing is more pronounced among non-state-owned firms, firms in the growth stage, firms in heavily polluting industries, and firms located in regions with weaker resource endowments. In addition, the stronger a firm’s digital technology R&D capability and corporate governance capability, the greater the restraining effect of the GLIS on its ESG greenwashing. By systematically evaluating the governance effect of fiscal–financial policy coordination on corporate ESG greenwashing, our study provides useful insights for governments seeking to improve green finance policies and optimize the coordination of green policy instruments.