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How does the green credit policy affect corporate ESG performance?

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  • Jiang, Shan
  • Ma, Zhibo

Abstract

This study employed the difference-in-difference (DID) method to examine the impact of the 2012 Green Credit Guidelines (GCG) policy on enterprises' ESG performance. The findings demonstrated that, compared to enterprises in non-heavily polluted industries, highly polluting enterprises were compelled by the GCG policy to strategically enhance their environmental performance due to financial constraints and the effects of environmental disclosure. This affected the ESG performance. However, the effects on social and governance performance were not significantly different. Additionally, the GCG policy had a notably positive impact on the ESG performance of state-owned, large, and mature companies, while it negatively affected the ESG performance of companies in the growth phase. The effective implementation of the policy was supported by stringent environmental regulations and a high degree of financial development. Finally, based on the empirical results, this study offers recommendations for policy adjustments, raising enterprise awareness, and improving the external environment.

Suggested Citation

  • Jiang, Shan & Ma, Zhibo, 2024. "How does the green credit policy affect corporate ESG performance?," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 814-826.
    • Handle: RePEc:eee:reveco:v:93:y:2024:i:pb:p:814-826
    DOI: 10.1016/j.iref.2024.05.024
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    Cited by:

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    2. Li, Puying & Li, Xinna & Wu, Qiang, 2025. "Digitalization drives Sustainability: How digital trade enhances corporate ESG performance through innovation, internationalization and transparency," International Review of Economics & Finance, Elsevier, vol. 101(C).
    3. Lingjun Guo & Wenyu Tan & Guangfu Liu, 2026. "Is the relationship between green credit and industrial green transformation “empowering” or “detrimental”?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 28(4), pages 10241-10263, April.
    4. Zhang, Hua & Guo, Zheng, 2026. "Green money talks: Does green bond issuance promote corporate green governance?," Research in International Business and Finance, Elsevier, vol. 82(C).
    5. Magdalena Zioło & Iwona Bąk & Anna Spoz, 2025. "The Nexus Between Green Bonds, Green Credits, and the Energy Transition Toward Renewable Energy Sources: State of the Art," Energies, MDPI, vol. 18(16), pages 1-21, August.
    6. Liu, Weiyong & Liu, Weiwen, 2025. "Green financial instruments: Economic, technological, and legal cycles in the development of the energy transition period," Technological Forecasting and Social Change, Elsevier, vol. 215(C).
    7. Hu, Haichuan & Jia, Zhenting & Yang, Siyao, 2025. "Exploring FinTech, green finance, and ESG performance across corporate life-cycles," International Review of Financial Analysis, Elsevier, vol. 97(C).
    8. Xu, Ying & Chen, Xinya, 2025. "How does the social insurance law affect enterprises' business credit?," International Review of Economics & Finance, Elsevier, vol. 102(C).
    9. Sun, Tingting & Mirza, Nawazish & Umar, Muhammad & Ktaish, Farah, 2024. "When interest rates rise, ESG is still relevant – The case of banking firms," Finance Research Letters, Elsevier, vol. 69(PB).
    10. Dongsheng Guo & Jianda Wang, 2025. "From green factories to ESG performance: How policy incentives shape a new paradigm for corporate sustainable development," Economic Change and Restructuring, Springer, vol. 58(6), pages 1-33, December.
    11. Ge, Ruichen & Zhang, Sha & Zhao, Hong, 2025. "How do timing and narrative tone influence the impact of pro-environmental orientation on crowdfunding performance?," Finance Research Letters, Elsevier, vol. 75(C).

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