Abstract: Practicing ESG is an important way to promote the green and low-carbon development of the economy and society. Taking the A-share listed companies from 2011 to 2021 as the research samples, this paper empirically tests the impact of ESG“greenwashing”on enterprise performance and its mechanism on the basis of measuring enterprise ESG“greenwashing”. The findings show that ESG greenwashing, social information greenwashing, and corporate governance greenwashing can all significantly reduce a company's financial and market performance, while environmental responsibility greenwashing will significantly improve a company's financial and market performance. The analysis of the influencing mechanism reveals that ESG greenwashing can weaken a company's operational capabilities, damage its reputation, and increase its financing constraints, thereby reducing its performance. The heterogeneity analysis reveals that in non-state-owned enterprises and enterprises with higher analyst attention, ESG“greenwashing”has a more significant effect on the declining corporate performance. To this end, enterprises, the society and the government should work together to promote the construction of China's distinctive ESG governance system.

Key words: ESG“greenwashing”, corporate performance, information disclosure, sustainable development