Where there is regulation, there is always a workaround: firms' dimension-specific Environmental, Social and Governance strategies under environmental pressure: evidence from the Implementation of the green credit policy

While prior research has focused on disclosure inconsistencies in ESG greenwashing, it often neglects strategies arising from varying implementation difficulties across ESG dimensions. This study uses China’s Green Credit Guidelines to examine how firms adopt dimension-specific strategies under environmental pressure. Results show that although regulated firms improve overall ESG performance, the increase is mainly driven by the governance (G) dimension—which is cheaper and faster to enhance. This strategic behavior stems from external pressure and internal cost–difficulty trade-offs. Heterogeneity analyses reveal that firms’ choices depend on their initial ESG capacity, alternative financing options, and lifecycle stage. Furthermore, firms emphasizing G-performance gain better subsequent bank loan access. FinTech application helps banks better assess corporate information, reducing such greenwashing. These findings offer implications for promoting green finance and corporate transformation. JEL Classification: G21, G34, H23