Common institutional ownership and corporate ESG performance in China

•Using a sample of Chinese listed companies spanning from 2011 to 2020, we investigate whether common institutional ownership affects corporate ESG performance.•The results show that common institutional ownership worsens corporate ESG performance, which still holds after conducting robustness checks.•The above conclusion is more prominent for enterprises facing stronger industrial competition, demonstrating the existence of an anticompetitive mechanism. Corporate ESG performance, which serves as an important aspect of sustainable finance, is a significant concern of communities and academics. Using a sample of Chinese listed companies spanning from 2011 to 2020, we investigate whether common institutional ownership affects corporate ESG performance. The results show that common institutional ownership worsens corporate ESG performance, which still holds after conducting robustness checks. The above conclusion is more prominent for enterprises facing stronger industrial competition, demonstrating the existence of an anticompetitive mechanism. Overall, we investigate how common institutional ownership negatively affects corporate ESG performance and has implications for emerging markets.