The effect of transition finance on ESG performance: empirical evidence from China's high-carbon industries

Abstract Transition finance, which supports the transition to sustainable development goals, is crucial for promoting the green and low-carbon development of corporations. Based on panel data of listed enterprises in China's high-carbon industries from 2012 to 2023, this study empirically investigates the impact and mechanisms of transition finance on enterprise ESG performance. The study found that: (1) Transition finance significantly enhances enterprise ESG performance. (2) Green strategic orientation and green transformation are pivotal mediating factors. (3) Heterogeneity analysis revealed more pronounced improvements in private enterprises, those located in green finance reform pilot zones and those in the eastern region.