<p>Corporate ESG performance plays vital role in advancing green credit practices. This study examines listed companies in China’s heavily polluting industries and demonstrates that strong ESG performance enhances bank lending, reduces borrowing costs, and significantly amplifies the influence of ESG performance on bank lending decisions following the implementation of the Green Credit Guidelines. Heterogeneity analysis reveals this effect is particularly pronounced among non-state-owned enterprises and small firms, indicating ESG performance holds greater significance for companies with weaker traditional institutional advantages. Mechanism analysis demonstrates that strong ESG performance positively influences bank lending behavior by improving information transparency and strengthening internal controls. To ensure robustness, this study employs multiple testing methods, including alternative definitions for key variables, instrumental variables, and propensity score matching. Based on empirical data from heavily polluting enterprises in China, this study provides theoretical foundations for examining the role of financial policies in emerging markets. While existing literature primarily focuses on ESG performance’s impact on corporate value and performance, attention to bank credit allocation remains limited. This research extends the boundaries of green finance studies by illuminating ESG performance’s influence on bank loan acquisition mechanisms.</p>