This　study　examined　the　unique　circumstances　surrounding　state-owned　equity　participation　in　enterprises　in　China.　Specifically,　this　study　examined　the　impact　of　state-owned　equity　participation　on　the　environmental,　social,　and　governance　(ESG)　performance　of　enterprises.　Focusing　on　A-share　listed　firms　on　the　Shanghai　and　Shenzhen　Stock　Exchanges,　and　using　data　from　2013　to　2021,　the　results　of　our　empirical　testing　showed　that　state-owned　equity　participation　could　significantly　improve　the　ESG　performance　of　enterprises,　with　this　conclusion　remaining　reliable　after　a　series　of　robustness　tests.　Top　management　incentives　were　a　mediating　mechanism　for　state-owned　equity　participation　in　enhancing　ESG　performance.　This　study　also　found　that　when　state-owned　equity　participated　in　large　enterprises,　or　companies　with　a　high　degree　of　digital　transformation,　the　effect　on　the　ESG　performance　was　greater　than　in　small　or　medium-sized　enterprises,　or　enterprises　with　a　low　level　of　digital　transformation.　The　findings　of　this　study　add　to　the　current　body　of　research　on　the　factors　influencing　corporate　ESG　performance,　and　the　impact　of　state-owned　equity　on　corporate　non-financial　performance.