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

Author

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  • Jinxin Liu

    (College of Economics and Management, Nanjing Forestry University, Nanjing 210037, China)

  • Bowen Zhu

    (College of Economics and Management, Nanjing Forestry University, Nanjing 210037, China)

  • Bicheng Zhang

    (College of Economics and Management, Nanjing Forestry University, Nanjing 210037, China)

  • Aijun Yang

    (College of Economics and Management, Nanjing Forestry University, Nanjing 210037, China)

Abstract

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.

Suggested Citation

  • Jinxin Liu & Bowen Zhu & Bicheng Zhang & Aijun Yang, 2026. "The Impact of China’s Green Finance Policy on Corporate ESG Performance: Evidence from Green Finance Reform and Innovation Pilot Zone," Sustainability, MDPI, vol. 18(3), pages 1-20, January.
    • Handle: RePEc:gam:jsusta:v:18:y:2026:i:3:p:1390-:d:1852841
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