A large number of studies shown that environmental subsidies which is the main incentive policy for promoting green transformation of enterprises did not help to promote green innovation. This might be due to the structural contradiction of "biased environmental performance over innovative performance" in environmental subsidies. To prove the above point, based on the panel data of Chinese listed companies from 2011 to 2019, the environmental subsidies were decomposed into environmental R&D subsidies and environmental non R&D subsidies using text analysis methods. The results show that firstly, non-R&D subsidies with short-term "environmental orientation" characteristics squeeze out R&D investment, while environmental R&D subsidies with both "environmental genes" and "R&D genes" characteristics can improve innovation performance of enterprise by alleviating internal and external financing constraints, thereby promoting green transformation of enterprise. Secondly, the heterogeneity analysis finds that environmental R&D subsidies have the strongest incentive effect in the manufacturing and heavy polluting industries, while the political affiliation and scale of enterprises can also affect the effectiveness of environmental subsidy policies. Thirdly, the design of environmental subsidy policies should balance "environment" and "efficiency", combining short-term environmental protection with the construction of a long-term mechanism for green innovation and transformation of enterprises to achieve long-term environmentally friendly growth.