As an important part of the central environmental supervision, the NSMF program is an environmental regulation that introduces modern means for environmental governance. Specifically, first, the NSMF program determines whether it is included in the national control list according to the pollution emissions of the enterprise in the past two years; subsequently, enterprises included in the national control list must install and maintain automatic monitoring equipment for pollution sources according to regulations and transmit real-time emission data to the national monitoring network; and finally, the monitoring center supervises and inspects the data on a monthly basis and requires at least one on-site inspection per month to ensure the normal operation of the pollution source automatic monitoring equipment and accuracy of the data. The existing research on the NSMF program is still relatively scarce, mainly focusing on the following four aspects. First, there is research on the program itself. For example, Yuan and Cao (2017) analyzed the existing problems of the NSMF program and proposed corresponding countermeasures and suggestions. Second, there is research on the application of project monitoring data. For example, Gao et al. (2020) analyzed the problems in the use of monitoring data for sewage treatment. Third, there is research on the key monitoring enterprises of the NSMF program. For example, Yin et al. (2018) proposed the “disciplinary cage” hypothesis by taking the key monitoring enterprises of the NSMF program, while Yin et al. (2020) took the key monitoring enterprises of the NSMF program as the research object and found that the replacement of municipal party secretaries negatively affected enterprise innovation; fourth, they researched the implementation consequences of the NSMF program. For example, Fang et al. (2020) used empirical evidence from the NSMF program and enterprise-level data from 2001 to 2009 to study the impact of environmental regulation on enterprise innovation. They found that the implementation of the NSMF program has increased the innovation of monitored enterprises and verified the weak Porter hypothesis theory.

Enterprises are important “consumers” of natural resources and major emitters of pollutants, and the improvement in their environmental performance is the micro-foundation for achieving environmental governance objectives. In fact, corporate environmental performance has immeasurable value for the long-term development of enterprises and high-quality development of the national economy. For enterprises, the improvement in corporate environmental performance can promote technological innovation, improve production efficiency, enhance social reputation, attract environmentally sensitive customers, and increase corporate competitive advantages (Hart and Ahuja, 1996; Konar and Cohen, 2001; Orlitzky et al., 2003) to promote the sustainable development of enterprises. Therefore, how to improve corporate environmental performance has become an important issue for the government, society, and enterprises.

At present, a large number of scholars have explored the influencing factors of corporate environmental performance. First, at the microlevel, some scholars believe that executive compensation (Zou et al., 2015), executive characteristics (Francoeur et al., 2020; Tran and Pham, 2020), and internal carbon pricing (Zhu et al., 2022) will have an impact on corporate environmental performance. Second, at the meso level, they mainly examine the impact of community pressure (Zhou et al., 2021), social trust (Chen et al., 2021), and stock market value (Endo, 2019) on corporate environmental performance. Third, at the macro-level, this article is directly related to the environmental policy and corporate environmental performance literature. For example, Earnhart et al. (2020) empirically analyzed the impact of law enforcement fairness on corporate environmental performance, indicating that unfair law enforcement methods will enable companies to show better environmental performance levels. Jiang et al. (2022) investigated the impact of the natural resource asset departure audit policy on corporate environmental performance and concluded that the departure audit significantly promoted the improvement of corporate environmental performance. Cao et al. (2021) examined the impact of government audits on corporate environmental performance, taking the vertical management reform initiative of government audit institutions piloted in China in 2015 as an example, and believed that government audits can improve corporate environmental performance. Wang et al. (2022) investigated the impact of central environmental protection inspectors on corporate environmental investment and concluded that central environmental protection inspectors effectively increased the level of corporate environmental investment.

Since 2006, China has gradually shifted the main body of responsibility for pollution control and environmental protection supervision from enterprises to the local government. However, while the “supervise local government” environmental policy has achieved certain results, it has also caused a series of problems worthy of attention. For example, some local governments use environmental data manipulation to modify environmental assessment indicators (Chen et al., 2012). The NSMF program introduces informatization and modernization for environmental governance, optimizes the information communication path between various levels in the environmental decentralization system, and improves the existing environmental law enforcement problems in China. This article believes that the NSMF program mainly affects the environmental performance of enterprises from the following three aspects. First, the NSMF program can alleviate the principal–agent problem between the central government and local governments and improve corporate environmental performance by deterring the local governments’ environmental enforcement efforts. Under a decentralized system with Chinese characteristics, the vast majority of law enforcement power is delegated to local governments (Li et al., 2020), and the “GDP tournament” makes local governments often acquiesce with companies “abandoning the environment and protecting the economy” when acting as agents, leading to the failure of the local government's control of pollution (Sun et al., 2021). The NSMF program introduces advanced technologies such as informatization and automation into environmental law enforcement and has the advantages of continuous online, all-day operation, and nationwide networking such that the central government can directly collect more reliable and accurate information on enterprise pollution emissions, enable local governments to accept law enforcement supervision in a more transparent environment, and form a deterrent to local governments. At this point, the local government passes the supervision pressure from the central government on environmental protection law enforcement to the local enterprises and strengthens environmental supervision or assessment (Jiang et al., 2022). Under the pressure of environmental protection, enterprises must take measures such as factory shutdown, production reduction, and green innovation to reduce emissions (Zhao et al., 2015; Hashmi and Alam, 2019; Fang et al., 2020; Yang et al., 2020) to improve environmental performance.

Second, the NSMF program can alleviate the principal–agent problem between local governments and enterprises and regulate the illegal discharge of enterprises by improving the environmental law enforcement level of local governments. Under the traditional environmental supervision mode, it is difficult for local governments to grasp the real pollution level of enterprises, and it is more difficult to grasp the evidence of illegal pollution discharge by enterprises (Zhang et al., 2018), which often leads to inefficient environmental governance of “one size fits all.” The NSMF program requires a comprehensive inspection of the standardization of monitoring ports, the construction of monitoring stations, and the installation of equipment for state-controlled enterprises in the jurisdiction. For those that do not meet the requirements, rectification plans should be listed one by one, and those with serious circumstances should be ordered to withdraw from the market. The installation of automatic monitoring equipment for pollution sources is the installation of a pair of “electronic eyes” on enterprises to implement real-time and continuous remote monitoring of the concentration and discharge of pollutants by enterprises (Fang et al., 2020), which effectively reduces the information asymmetry between local governments and enterprises and deters enterprises from discharging pollutants. At this time, once a company’s illegal discharge behavior is found, it will face administrative penalties and damage to its corporate reputation (Rick et al., 2021; He et al., 2022) or directly affect its eligibility to enjoy relevant preferential policies (Johan and Lans, 2020; Lu, 2022). To prevent this risk, companies have the incentive to improve their environmental performance and achieve their own sustainable development.

Third, the NSMF program can alleviate the principal–agent problem between people and government and between people and enterprises and amplify the deterrent effect of the environmental policy by increasing the participation of the public. On the one hand, the government’s vigorous publicity of the NSMF program and environmental protection has sent a signal to the society that the government attaches importance to environmental protection and has raised the public’s awareness of environmental protection. At the same time, measures such as the real-time disclosure of monitoring information and user satisfaction surveys have lowered the threshold for public participation, activated social supervision networks, and increased public willingness to participate in environmental governance. Increased public environmental awareness and willingness to participate amplifies the deterrent effect on local governments and businesses, which is conducive for the improvement of corporate environmental performance (Kostka and Mol, 2013; Van Rooij, 2016). On the other hand, after an enterprise is included in the national control list, it faces more attention from the market and investors. When the enterprise’s environmental performance is poor, it loses favor of the market and investors. As a “rational economic man,” to maximize profits, enterprises have to make corresponding adaptive behavioral responses under the stimulation of environmental policies and market preferences, take the initiative to reconfigure resources, adopt green innovation and other ways to improve their environmental performance, and improve their market competitiveness. In summary, this article proposes the following hypotheses:

H1

With other conditions unchanged, the NSMF program can significantly improve corporate environmental performance.

The heterogeneity of enterprises’ own resources lead to differences in impact of the NSMF program on corporate environmental performance (Fang et al., 2020). From the perspective of cost‒benefit theory, the impact of the NSMF program on corporate environmental performance is related to corporate financing constraints. Measures for the Administration of Automatic Monitoring of Pollution Sources (2005) stipulate that the construction, operation, and maintenance of automatic monitoring equipment are self-financed by polluters, and the expenditure of these non-productive activities often crowds out potential investment by companies in expanding production. On the one hand, when the NSMF program is implemented, enterprises with a high degree of financing constraints resist the development of the relevant work of the pollution source monitoring system and in the face of punishment for excessive sewage discharge or the abnormal operation of equipment, there is the idea of “two penalties take the lightest,” that is, deliberately letting equipment failure or even man-made destruction of equipment, rendering the pollution source monitoring instruments useless. On the other hand, the higher the degree of financing constraints of sewage enterprises, the less motivated they become to take the initiative to improve their environmental performance through technological innovation (Tian et al., 2022; Aghion et al., 2016). Therefore, financing constraints may weaken the effect of the NSMF program on corporate environmental performance. In summary, this article proposes the following assumptions:

H2

With other conditions unchanged, compared with enterprises with a higher degree of financing constraints, the NSMF program has a more significant effect on the environmental performance of enterprises with a lower degree of financing constraints.

In the context of globalization, trade openness is an important factor affecting the environment. Therefore, the relationship between the NSMF program and corporate environmental performance will inevitably be affected by international trade. On the one hand, when compared with domestic enterprises, export enterprises face more stringent environmental requirements. In the international market, the requirements for environmental protection in various countries are constantly increasing (Peng et al., 2020), especially in developed countries with higher economic and technological levels, which generally implement higher environmental protection technical standards, such as the “EPA mark” of the United States, the “EV system” of the European Union, the “ECP” of Canada, and the “ecological mark” of Austria, which makes the export enterprises themselves face more stringent environmental requirements. To meet the environmental standards of the developed countries, export enterprises must reduce pollution to obtain environmental certification of developed countries (Bloom et al., 2013; De Loecker and Goldberg, 2014). On the other hand, when compared with domestic enterprises, international trade has strengthened the technological exchanges between export enterprises and developed countries. Export enterprises can participate in the global export market and have access to the most advanced manufacturing, technology R&D, and management methods of developed countries (Roy and Yasar, 2015). Correspondingly, in the process of expanding and operating export markets in developed countries, export enterprises have the opportunity to obtain more green production technologies to improve their own environmental performance (Zhou et al., 2018). Torres (1999) also pointed out that through free trade, residents’ income has increased significantly and more resources and technology can be used to improve the environment. Regardless of whether it is included in the national control list or not, the environmental performance of export enterprises will be better than that of domestic enterprises, so the improvement in the environmental performance of enterprises by the NSMF program is more obvious in domestic enterprises. In summary, this article proposes the following assumptions:

H3

With other conditions unchanged, when compared with export enterprises, the NSMF program has a more significant impact on the environmental performance of domestic enterprises.

The level of economic development in the region where the enterprise is located is also an important factor in testing the impact of the NSMF program on corporate environmental performance. The operation of the NSMF program project shows that the central government attaches great importance to local environmental governance, and environmental protection has become one of the important assessment indicators for the promotion mechanism of local officials. However, according to the theory of multi-objective assessment, when the assessed aspect evaluates multiple objectives, it gives priority to achieving goals that are less difficult and more effective (Holmstrom and Milgrom, 1991). When compared with environmental protection goals, the economic growth goals have clearer measurements and more efficient ways of achieving them. Therefore, when the downward pressure on the regional economy increases, the local governments may choose to relax environmental regulations in exchange for economic growth, thereby weakening the motivation of corporate environmental governance. Conversely, when the level of regional economic development is high, the opportunity cost for local governments to pursue environmental protection goals is small (Tang, 2015). Under the pressure of the NSMF program, local governments can increase their law enforcement efforts and strive to achieve the dual goals of environmental protection and economic growth, thereby enhancing the motivation for corporate pollution control and improving the environmental performance of enterprises. In summary, this article proposes the following assumptions:

H4

With other conditions unchanged, compared with regions with lower levels of economic development, the NSMF program has a more significant effect on corporate environmental performance in regions with higher levels of economic development.

This article mainly uses two types of micro data. One is the enterprise pollution emission data, which is from the China Industrial Enterprise Pollution Database from 1998 to 2010. The database is considered to be the most comprehensive and reliable enterprise-level pollution emission data in China (Zhang et al., 2018). Second, other data at the enterprise level are from the China Industrial Enterprise Database from 1998 to 2013. Referring to the practice of Brandt et al. (2012) and Su (2020), we matched the data of the two databases, eliminating the missing data of enterprise codes, and finally selected the data from 2001 to 2009 as the research sample. At the same time, this article sets the year of policy implementation as 2007 because although the NSMF program’s list is dynamically adjusted every year in principle, the list does not change until 2010 when compared with 2007. Therefore, this article sets the treatment group as the enterprises listed on the NSMF program’s list in 2007. After eliminating the missing values of the main variables, 10,006 observations were finally obtained. In addition, to control the impact of extreme values, this article winsorizes all continuous variables at the 1% and 99% levels, and all operations are completed using Stata 16.0.

To verify H₁, the following difference-in-differences model was built: E P it C E P it = α + β 1 T r e a t i ∗ P o s t t + β 2 C o n t r o l s i + λ + μ + Y e a r ∗ P r o v i n c e + I n d u s t r y + ε it . (1)

This article measures corporate environmental performance from the two aspects of emission reduction and energy savings; EP_it represents the comprehensive emission intensity of enterprise i in year t, CEP_it represents the unit energy consumption of enterprise i in year t, and Treat_i is a grouping dummy variable—if the enterprise is included in the national control list, it is assigned to 1; if otherwise, it is assigned 0. Post_t is a time dummy variable—if it is in the year of policy implementation in 2007 or after, the value assigned is 1; if otherwise, it is 0. X_i is the control variable, λ is the time fixed effect, µ is the individual fixed effect, and ε_it is the random error term. This article focuses on the coefficient β₁ of the cross-term between Treat_i and Post_t, which reflects the net impact of the NSMF program on corporate environmental performance. When β₁ is significantly negative, it means that the NSMF program inhibits the comprehensive emission intensity of enterprises or reduces the unit energy consumption of enterprises, that is, it improves the environmental performance of monitored enterprises. In addition, H2, H3, and H4 are tested by grouping.

Table 2 reports the descriptive statistics of the whole sample of the main variables. The mean value of the comprehensive index (EP) of enterprise pollution emissions is 3.074, the standard deviation is 13.620, and the maximum and minimum values are 95.200 and −0.031, respectively. The mean value of unit energy consumption (CEP) is 4.260, the standard deviation is 6.734, and the maximum and minimum values are 43.190 and 0, respectively, indicating that the environmental performance of the industrial enterprises in China is good, but there are great differences between different individuals. The average value of Treat is 0.176, that is, 17.6% of the enterprises are included in the NSMF program’s list, which also shows that the overall environmental performance of China’s industrial enterprises is good. The descriptive statistical values of the other variables are reasonably distributed and will not be repeated here.

The premise of the difference-in-differences method is that the enterprises included in the NSMF program’s list and the enterprises not included in the NSMF program’s list meet the parallel trend hypothesis before the project runs. To this end, this article draws on the event research method of Li et al. (2016) for a parallel trend test. On the basis of model (1), the window period for variables of 1–3 years before the operation year of the NSMF program and the window period for variables of 1–2 years after the operation are added. The following regression model is set as E P it = α + β 1 T r e a t i ∗ p r e _ 1 + β 2 T r e a t i ∗ p r e _ 2 + β 3 T r e a t i ∗ p r e _ 3 + β 0 T r e a t i ∗ c u r r e n t + β 4 T r e a t i ∗ p o s t _ 1 + β 5 T r e a t i ∗ p o s t _ 2 + β 6 C o n t r o l s i + y e a r ∗ p r o v i n c e + I n d u s t r y + λ + μ + ε i t . (4)

After adding the control variables, the regression coefficients of the explanatory variables Treat_i*pre_1, Treat_i*pre_2, and Treat_i*pre_3 were not significant, indicating that at least 3 years before the implementation of the policy, the trend of the pollutant discharge intensity and unit energy consumption of the treatment group and control group had been consistent, meeting the parallel trend hypothesis. To show the results more intuitively, we drew a graph as shown in Figure 1. It can be seen that before the operation of the national control project, the regression coefficients of Treat_i*pre_1, Treat_i*pre_2, and Treat_i*pre_3 are not significantly different from 0 (95% confidence interval contains 0), indicating that there is no significant difference between the treatment group and control group before the operation of the program, which satisfies the parallel trend hypothesis, while the coefficient after the operation of the project is significantly negative, indicating that the operation of the NSMF program has a negative impact on the pollutant discharge and unit energy consumption of the enterprise, that is, it improves the environmental performance of the enterprise [due to space limitations, this article only selects the report model (4) which includes more intuitive graphics].

The regression results of the basic relationship between the NSMF program and corporate environmental performance are shown in Table 3. Specifically, the regression results of the influences of the NSMF program on the comprehensive pollutant emission intensity of the enterprises are listed in columns (1)–(3). The regression results of the influences of the NSMF program on unit energy consumption of the enterprises are listed in columns (4)–(6). Control variables are added in column (3) and column (6). After time, individual and industrial fixed effects as well as regional unobservable factors that change with time are controlled, and the coefficients of Treat*Post are −2.035 and −0.607, which are significantly negative at the 5% level at least. Based on the aforementioned results, the implementation of the NSMF program inhibits the comprehensive pollutant emission intensity of enterprises and lowers their unit energy consumption, thus improving the enterprise environmental performance. Hence, H₁ is verified. Such an effect of the NSMF program is analyzed as follows. First, the NSMF program can decrease information asymmetry between the central government and local government and between the government and enterprises. It can deter enterprises and local governments such that the government can formulate more specific environmental regulations and facilitate full implementation to force enterprises to adopt energy savings and emission reduction. Second, it can strengthen the environmental protection consciousness of enterprises through information transmission and thereby strengthen their willingness to improve clean production technologies, purchase environmental protection equipment, and produce green products. Third, the NSMF program brings an innovative idea of environmental management and improves the overall environmental supervision and law enforcement efficacy. All of these factors facilitate the improvement of enterprise environmental performance and bring a new situation of energy savings and emission reduction in China.

Previously, it has been confirmed that the NSMF program can significantly reduce the comprehensive emission intensity and unit energy consumption of enterprises and improve the environmental performance of enterprises. So how is this achieved? In the aforementioned theoretical analysis and research hypothesis section, it is mentioned that the NSMF program can not only alleviate information asymmetry but also effect signal transmission and rule of law. These characteristics force enterprises to install automatic monitoring equipment and carry out environmental governance. Specifically, within the enterprise, resources may be reconfigured, such as purchasing more environmental protection equipment to improve the environmental performance. Therefore, this article takes “waste gas treatment capacity” as the proxy variable of enterprise environmental protection investment to test whether the NSMF program can reduce its comprehensive emission intensity and unit energy consumption by increasing the investment in enterprise environmental protection equipment. Following Wen and Ye (2014), we set the following model: E P i t C E P i t = α + c T r e a t i ∗ P o s t t + β 2 C o n t r o l s i + λ + μ + Y e a r ∗ P r o v i n c e + I n d u s t r y + ε it , (5) I n v e s t i t = α + a T r e a t i ∗ P o s t t + β 2 C o n t r o l s i + λ + μ + Y e a r ∗ P r o v i n c e + I n d u s t r y + ε it (6) E P i t C E P i t = α + c ′ T r e a t i ∗ P o s t t + b I n v e s t i t + β 2 C o n t r o l s i + λ + μ + Y e a r ∗ P r o v i n c e + I n d u s t r y + ε it (7)

where Invest is the enterprise environmental protection equipment investment calculated from “enterprise waste gas treatment facilities processing capacity (in standard cubic meters)/100,000.” Eq. 5 tests the impact of the NSMF program on corporate environmental performance, which has been verified above. Eq. 6 tests the influence of the NSMF program on enterprise environmental protection equipment input and observes the significance of coefficient a. Eq. 7 takes the NSMF program and enterprise environmental protection equipment input as core explanatory variables for regression to observe the significance of coefficients c' and b. If coefficients a and b are significant and coefficient c' is significant, it indicates that the investment in environmental protection equipment is a part of the mediator. If the coefficient c' is not significant, it indicates that the investment in environmental protection equipment is a complete intermediary. If at least one of the coefficients a and b is not significant, the bootstrap method should be used for further testing. The regression results are shown in Table 8. The results show that the coefficient of invest is not significant, so it is necessary to further conduct the bootstrap test. The bootstrap test results (Table 9) show that the indirect effect of enterprise environmental protection equipment investment on the improvement of corporate environmental performance of the NSMF program is significant. This indicates that the increase in investment in environmental protection equipment is a non-exclusive intermediary mechanism for the NSMF program to improve corporate environmental performance.

In China, the realization of the central ecological environment governance goal deeply depends on the transformation mechanism of the environmental policy implementation chain at the local level. However, under the state of incomplete information and the incentive structure of multitasking principal–agent, there are many principal–agent problems which lead to the destruction of the transformation mechanism of the policy implementation chain and the failure to achieve the goal of environmental governance. In view of this, based on the Chinese industrial enterprise pollution database and the Chinese industrial enterprise database, this article selects industrial enterprise data from 2001 to 2009 as the research sample, empirically tests the impact and mechanism of the NSMF program on the environmental performance of enterprises, and further examines the different effects of enterprise heterogeneity and regional differences on the relationship between the two. The empirical results show the following: 1) the implementation of the NSMF program has significantly improved corporate environmental performance. 2) When compared with enterprises with a high degree of financing constraints, the NSMF program has a more significant effect on the environmental performance of enterprises with a low degree of financing constraints; when compared with export enterprises, the NSMF program has a more significant effect on the environmental performance of domestic enterprises; when compared with enterprises with a lower economic development level in the region, the NSMF program has a more significant effect on the environmental performance of enterprises with a higher economic development level in the region. 3) The mechanism tests show that the NSMF program can improve environmental performance by increasing investment in environmental protection equipment.

The conclusion of this study has important policy implications for optimizing China’s future environmental governance. First, the central government should strengthen local environmental supervision. On the one hand, more flexible and comprehensive central supervision and environmental decentralization of environmental policies should be adopted. For many years, the ambiguity and conflict of China’s environmental regulations have tended to stimulate the interest game between the local government and central government in the implementation process. Therefore, it is urgent to use modern means to improve the intensity and precision of environmental governance to reduce the space of discretion in the implementation of environmental policies and exercise authority. On the other hand, the proportion of the environmental governance effect in the promotion assessment of local officials should be increased. The monitoring data of the NSMF program are integrated with the environmental governance data obtained by “man-marking” to comprehensively evaluate the environmental governance performance of all provinces and regions, ranking them regularly, rewarding provinces with good environmental control, and increasing punishment for provinces with poor environmental control to correct the GDP-only mentality of local governments.

Second, we fully consider the possible impact of heterogeneity of the enterprise’s own resources. First, the construction of an environmental credit rating system should be strengthened for domestic enterprises or enterprises with higher financing constraints. Governments should provide appropriate economic resources, such as environmental subsidies, tax rebates, and even cooperation opportunities, to encourage the sustainable implementation of environmentally friendly behavior for reputable exporters who voluntarily fulfill their environmental responsibilities or those with higher financing constraints. Second, domestic enterprises or enterprises with higher financing constraints should be encouraged to coordinate with universities and research institutions. The government should give certain subsidies and rewards to this series of cooperation, minimize the investment and risk of green technology R&D of domestic enterprises or enterprises with higher financing constraints, and reduce their cost pressure in improving environmental performance. Third, China’s international division of labor status should be enhanced. On the one hand, in facing the new situation of economic globalization, we should continue to promote the process of opening up to the outside world, implement a more active export strategy, make full use of the regional cooperation platform built by the “Belt and Road,” and encourage enterprises to participate in globalization to higher and higher levels. On the other hand, the construction of an enterprise resource sharing network encourages export enterprises and domestic enterprises to engage in green technology exchange and emission reduction equipment sharing and promote enterprise green technology progress and emission reduction equipment upgrades to obtain more environmental benefits.

Third, we should strengthen the application effect of monitoring data and improve our environmental monitoring system. On the one hand, we should give full play to the unique advantages of the NSMF program and eliminate information noise and other interference factors caused by the principal–agent relationship in environmental governance to ensure the integrity and smoothness of the implementation chain of environmental policies and ultimately maximize the effect of the environmental governance system. On the other hand, the data monitored by the NSMF program should be widely used in all walks of life. The wide application of monitoring data will improve the public’s attention to the performance of corporate social responsibility, promote the public’s wide participation in environmental governance, and facilitate government managers, enterprises, and scholars in various fields to explore the path of green development.

While this study validates the target findings, it also has certain limitations that need to be addressed in future research. First, the data selected in this article are all from the Chinese industrial enterprise pollution database and the Chinese industrial enterprise database, which is considered to be the most comprehensive and reliable environmental microeconomic data in China. However, data from both databases are not updated to the most recent year. In the future, we can further explore how to measure corporate environmental performance more intuitively using the latest data. Second, there is the intermediary effect. This study not only focuses on the intermediary role of investment in environmental protection equipment but also shows that investment in environmental protection equipment is not the only intermediary mechanism by which the NSMF program improves enterprises’ environmental performance. Future research can explore the synergy mechanism of the NSMF program affecting enterprises' environmental performance. Finally, there is a balance between environmental performance and economic performance. Although the NSMF program is essential to alleviate the principal–agent problem in the process of corporate environmental governance and can effectively improve the environmental performance of enterprises, it is still necessary to explore whether the NSMF program can improve the environmental performance of enterprises while considering economic performance to make the research conclusion more comprehensive.