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

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 | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Article 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from the Implementation of the green credit policy jialan huang, Changqing Li, yu Li This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8327408/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract 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 Business and commerce/Business and management Social science/Business and management Earth and environmental sciences/Environmental social sciences Social science/Environmental studies Business and commerce/Finance Social science/Finance ESG Performance Green Credit Bank Credit Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8327408","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Article","associatedPublications":[],"authors":[{"id":590612519,"identity":"62cc304f-3ae3-4820-8855-dd86ea1fc841","order_by":0,"name":"jialan huang","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAABD0lEQVRIiWNgGAWjYBACAzDJI8HAx8DA+AAhzkaEFqAaZgOGBKK1QNSwSRClxVwi+dnDLzIW8mzsZ49V/vxxmMHg2hkDhg9lhxn4Zzdg1WI5I83cWIZHwrCNJy/tNk/CYQbJ2TkGjDPOHWaQuHMAu8NuJJhJS/BIMLYx5JjdZgBq4ZfOMWDmbQNaJ5GAQ0v6N5AW+zb+N2aFP4Ba2EBa/uLVkmMm+YFHIrFNIseMgQdmCyM+LWfelEkDAzm5TeKNsTRPWjqP5Oy0goM959J5JG7g0HI8fZvkz546237+HMOPP2ys5QxuJ2988KPMWo5/BnYtIMDM24Pg8ICIAzAGLsD44wc+6VEwCkbBKBjxAABFtFNXXRXETQAAAABJRU5ErkJggg==","orcid":"","institution":"Xiamen University","correspondingAuthor":true,"prefix":"","firstName":"jialan","middleName":"","lastName":"huang","suffix":""},{"id":590612520,"identity":"00e18a47-7e58-48d5-9d6e-f5b019602629","order_by":1,"name":"Changqing Li","email":"","orcid":"","institution":"Xiamen University","correspondingAuthor":false,"prefix":"","firstName":"Changqing","middleName":"","lastName":"Li","suffix":""},{"id":590612521,"identity":"12f6f495-222f-4b1b-8418-95479926945c","order_by":2,"name":"yu Li","email":"","orcid":"","institution":"Xiamen University","correspondingAuthor":false,"prefix":"","firstName":"yu","middleName":"","lastName":"Li","suffix":""}],"badges":[],"createdAt":"2025-12-10 12:23:28","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-8327408/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8327408/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":108583565,"identity":"fd9b7084-7c5c-4a6d-be83-3823f7aba688","added_by":"auto","created_at":"2026-05-06 08:27:22","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":499513,"visible":true,"origin":"","legend":"","description":"","filename":"Manuscriptwithoutdetails.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8327408/v1_covered_8eb8424b-8a8b-417b-be07-cd97a6c5a476.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"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","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"ESG Performance, Green Credit, Bank Credit","lastPublishedDoi":"10.21203/rs.3.rs-8327408/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8327408/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eWhile prior research has focused on disclosure inconsistencies in ESG greenwashing, it often neglects strategies arising from varying implementation difficulties across ESG dimensions. 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