In recent years, the country has proposed the “dual carbon” goal, and the“14th Five Year Plan” requires the entire society to coordinate economic, social, and environmental benefits. It has become crucial for enterprises to practice the ESG concept. As one of the most important institutions in the financial industry, commercial banks have higher requirements from relevant departments for practicing ESG concepts. Taking 38 listed commercial banks from the first quarter of 2009 to the first quarter of 2023 as samples to empirically test the impact of ESG performance on the competitiveness of commercial banks, the moderating effect of financial innovation was studied. The results show that ESG performance has a significant positive impact on the competitiveness of commercial banks, and there is a certain lag effect. Financial innovation can positively regulate the impact of ESG on the competitiveness of commercial banks. Heterogeneity analysis shows that ESG performance has no significant impact on state-owned large commercial banks and rural commercial banks, but has a significant positive impact on joint-stock commercial banks and urban commercial banks.