Based on the data of A-share listed companies in Shanghai and Shenzhen stock markets from 2011 to 2021, this paper empirically analyzes the relationship between environmental protection investment, internal control and the second type of agency cost. The results indicate that environmental investment is beneficial to reduce the cost of the second type of agency, and internal control has an inhibitory effect on reducing the cost of the second type of agency through environmental investment. Mechanism test shows that environmental investment can reduce the second type of agency costs by improving company information transparency and enhancing ESG performance.Further analysis reveals that the impact of environmental protection investment on the second type of agency costs is evident in companies with high external supervision pressure, non heavy pollution, and lower motives for major shareholder hollowing out. Moreover,the inhibitory effect of internal control is significant in companies with weak external supervision pressure and low motivation for major shareholders to empty out, while there is no significant difference in other aspects.The study reveals the corporate governance benefits of environmental protection investment from the perspective of economic consequences, which is of practical significance for the implementation of the “dual carbon” strategy, the improvement of corporate governance efficiency,and the protection of investor interests.