Abstract: ESG is a brand new orientation concerning how environment, society and governance can realize sustainable development in enterprises, which can exert an important impact on enterprises’ low-carbon green transformation activities. Based on the data of A-share listed companies in Shanghai and Shenzhen stock exchanges from 2011 to 2021, this paper studies the impact of corporate ESG performance on the low-carbon green transformation. The findings show that the improvement of corporate ESG performance can effectively improve the level of low-carbon green transformation. The heterogeneity test reveals that the improved corporate ESG performance has a more prominent effect on the low-carbon green transformation of non-state-owned enterprises, heavily polluting enterprises and high-tech enterprises. The mechanism test reveals that the improved corporate ESG performance can effectively transmit positive signals, strengthen risk smoothing ability and stimulate green innovation vitality, which can provide impetus for low-carbon green transformation. Further research finds out that specialized green financial policies are an important factor influencing the low-carbon green drivers of corporate ESG performance. In the enterprises with green financial policy support, the improvement of corporate ESG performance will have a significant empowering effect on the low-carbon green transition. In view of this, it is recommended that the government should establish a clearer ESG assessment system, increase incentives for enterprises to meet ESG standards, and encourage financial institutions to launch green financial products. The enterprises should strengthen their awareness of ESG, increase investment, and strengthen the disclosure of ESG information.

Key words: ESG performance, low-carbon green transformation, signal transmission, risk smoothing, green innovation