Based on the panel data of A-share listed companies from 2009 to 2022, an empirical analysis was conducted on the impact of government-guided funds on the ESG performance of the invested enterprises. The research results show that the introduction of government-guided funds can significantly improve the ESG performance of invested enterprises, and the above conclusion still holds after a series of robustness tests. The analysis of the intermediary mechanism reveals that government-guided funds can enhance the ESG performance of the invested enterprises by alleviating the financing constraints, promoting green governance and driving green innovation. Heterogeneity analysis indicates that government-guided funds have a stronger enhancing effect on the ESG performance of the invested enterprises where the environmental governance efforts of the local district are relatively weak and are in polluting industries, the competition degree of the industry they are in is relatively low, the scale is relatively large, and they have received cross-regional investment from government-guided funds. But, at present, China’s green government-guided funds- effect on improving the ESG performance of the invested enterprises is not significantly higher than that of non-green government-guided funds. Further analysis indicates that the role of government-guided funds in enhancing the ESG performance of the invested enterprises mainly stems from the improvement of performance in the E and S dimensions. The research findings provide a path support on how government-guided funds can effectively assist the enterprises they invest in improving their ESG performance.