ESG is an important breakthrough in the process of moving towards sustainable development and promoting high-quality development at the micro enterprise level, which is also an important realization way to promote the sustainable development of the capital market. A reasonable assessment of the innovation value effect of ESG is of great significance for accelerating the construction of a scientific and technological powerhouse at the new development stage. Grounded in the data of A-share listed companies in Shanghai and Shenzhen from 2012 to 2021, the empirical results using the individual fixed effect model show that, firstly, corporate ESG performance can strengthen corporate innovation efficiency and possess the efficiency improvement effect of corporate innovation, and the conclusion of the study still holds after a series of robustness tests and consideration of endogeneity issues. Second, corporate ESG performance improves corporate innovation efficiency through the triple mechanism of strengthening corporate R&D investment, alleviating corporate financing constraints, and reducing corporate agency costs, and it improves corporate innovation efficiency through R&D incentives and cost-saving effects. Third, there is heterogeneity in the improvement effect of corporate ESG on corporate innovation efficiency, which is more obvious in the sample enterprises with higher degree of marketization, private enterprises and overseas executives. The findings provide empirical references for the optimization of innovation resource allocation based on ESG strategic change in the new development stage.