Abstract: Based on the panel data of China’s A-share listed companies from 2012 to 2022, the impact of corporate ESG performance on debt financing cost is empirically investigated, and the results show that: (1) The improvement of corporate ESG performance helps to reduce its debt financing cost, and the results are still valid through the robustness test as well as the endogeneity test; (2) The mediation test shows that corporate ESG performance reduces debt financing cost by improving corporate reputation, reduce financing constraints to reduce debt financing costs; (3) The heterogeneity analysis concludes that the ESG performance of non-state-owned enterprises and enterprises in the central and eastern regions has a more obvious effect on the reduction of debt financing costs. The results call for enterprises to actively strengthen ESG practices and improve ESG disclosure; The government and regulatory authorities should improve ESG disclosure system and do a good job in monitoring and guiding; Investors should pay attention to the ESG practices of enterprises while focusing on financial indicators in order to reduce investment risks.

Key words: ESG performance, debt financing cost, corporate reputation, financing constraints