Abstract: Against the backdrop of a chaotic ESG investment market and insufficient development momentum, it is crucial to explore the development of corporate ESG from a macro-government perspective. Unlike previous studies that have primarily focused on single green development policies, this research takes a more comprehensive policy system approach. Using a sample of A-share listed companies from 2010 to 2022, we construct a multi-period difference-in-differences (DID) model based on cities piloting social credit system development to empirically investigate the impact of social credit system construction on corporate ESG performance. The study finds that the development of the social credit system can enhance corporate ESG performance. Mechanism tests reveal that the social credit system promotes ESG performance by fostering a culture of cooperation, alleviating financing constraints, and encouraging green innovation. Heterogeneity analysis shows that the positive impact of social credit system development on ESG performance is more significant in private enterprises, high-pollution industries, first- and second-tier cities, and regions with higher government credit levels. The findings not only provide theoretical support for the construction of the social credit system but also offer practical guidance for overcoming the challenges in corporate ESG development.

Key words: social credit system, ESG, enterprise cooperation culture, financing constraints, green innovation