Can green finance improve corporate ESG performance? Empirical evidence from Chinese A-share listed companies

Leveraging China's 2017 Green Finance Reform and Innovation Pilot Zone Policy (GFPP) as an exogenous shock, this study selects A-share listed companies spanning from 2014 to 2022 as the sample, employing the difference-in-differences (DID) to examine the impact and mechanism of GFPP on corporate ESG performance. The study reveals that GFPP significantly enhance corporate ESG performance, with corporate financing constraints and social responsibility awareness mediating this relationship. Furthermore, the incentivizing effect of GFPP on corporate ESG performance is notably pronounced in enterprises located in the eastern region, small-scale enterprises, non-state-owned enterprises, and heavily polluting industries.