Abstract

capital to firms pursuing environmental objectives. This study reexamines the empirical association between earnings management and green financing using the reported evidence for 29,971 firm-year observations of Chinese nonfinancial A-share companies during 2014–2023. Green financing is operationalized as the ownership share held by environmentally oriented investors, earnings management as the absolute magnitude of discretionary accruals, and environmental, social, and governance performance through Huazheng ratings. Firm and year fixed-effects regressions, alternative specifications, instrumental-variable estimation, and ownership, technology, and pollution subsamples are interpreted jointly. The principal adjusted coefficient for earnings management is −0.0128, and the instrumental-variable estimate is −0.1043; both are statistically significant. Differences between state and private ownership, high-technology and other businesses, and pollution-intensive and less-polluting sectors are supported by reported cross group tests. ESG ratings are positively associated with green financing in the moderation models, but the published interaction coefficient is negative (−0.0019), contrary to the source article’s verbal characterization of a buffering effect. The analysis therefore separates the observed estimate from the intended hypothesis rather than treating the contradiction as resolved. The evidence points to a meaningful relationship between accounting credibility and the allocation of sustainability-oriented equity, while highlighting limits arising from proxy construction, the exclusion restriction of the instrument, and the observational research design. The study contributes a cautious interpretation of how reporting practices and firm characteristics jointly shape green-capital access.