With the growing global focus on sustainable development, the recognition of Environmental, Social, and Governance (ESG) principles continues to expand. Aligned with the “dual-carbon” goal, ESG performance has become a critical factor in corporate strategic decision-making, driving listed companies to integrate ESG strategies for long-term value creation. This study examines the impact of ESG performance on firm value and its underlying mechanisms using data from China's A-share listed manufacturing firms from 2011 to 2023. The results indicate that: (1) ESG performance has a significant positive impact on firm value, a conclusion that remains robust across multiple sensitivity and robustness tests. (2) Mechanism analysis indicates that ESG performance enhances firm value primarily by increasing organizational visibility. (3) Executive incentives positively moderate the relationship between ESG performance and firm value, further amplifying the value-enhancing effect of ESG performance. (4) Heterogeneity analysis suggests that ESG performance has a stronger impact on firm value in non-state-owned firms, non-heavily polluting sectors, businesses in regions with high marketization, and firms facing weaker environmental regulatory constraints. This study provides empirical evidence to guide policymakers and corporate managers in effectively integrating ESG strategies to promote sustainable development alongside financial performance.