<p>Since the adoption of the United Nations 2030 Agenda for Sustainable Development, firms have integrated the Sustainable Development Goals (SDGs) into their strategic management and long-term development planning. With the increasing importance of ESG, exploring the impact of “greenwashing”, a short-sighted practice of substituting genuine environmental efforts with deceptive ESG performance disclosure, on corporate financial sustainability is of great significance. Using 1,367 Chinese A-share listed corporate data from 2009 to 2021, our study constructs a fixed-effects model to explore the mechanisms of greenwashing on corporate financial sustainability. The results indicate that while greenwashing in ESG disclosure may yield short-term profits for firms, it ultimately undermines their financial sustainability in the long term. Mechanism analysis indicates that greenwashing negatively affects corporate financial sustainability by increasing financial constraints, hindering green innovation, and amplifying environmental uncertainty. Through heterogeneity analysis, this negative effect is more significant when firms have better economic performance and worse environmental performance. By advocating for more transparent ESG disclosures, this paper contributes positively to driving firms towards a more sustainable direction.</p>