As an important tool of fiscal policy, preferential tax policies incentivize enterprises to actively adopt the ESG concept actively, achieving a deep integration of economic and social benefits. This paper empirically examines the impact of preferential tax policies on the Environmental, Social, and Governance (ESG) performance of corporate entities and their underlying mechanisms, using data from Shanghai and Shenzhen A-share listed companies from 2018 to 2023. The research findings indicate that preferential tax policies can significantly enhance corporate ESG performance, and in terms of impact mechanisms, preferential tax policies primarily improve corporate ESG performance by alleviating financing constraints and increasing corporate R&D investment. Further analysis reveals that, compared to state-owned enterprises, both income tax incentives and turnover tax incentives have a more pronounced effect on improving the ESG performance of non-state-owned enterprises. Compared to central and western China, these two types of tax incentives have a stronger incentive effect on the ESG performance of enterprises in eastern China. Based on this, in the future, tax incentives should be continuously promoted, financing support and R&D incentives should be strengthened, and the overall ESG performance of capital markets should be improved to achieve coordinated economic and social benefits.