<p>We construct a theoretical model of ESG performance affecting enterprises’ Outward Foreign Direct Investment (OFDI) mode choice from the perspective of total factor productivity and empirically tests the model using data from Chinese listed companies. We find that companies with better ESG performance tend to have a higher propensity to choose the Greenfield investment mode for OFDI, and this conclusion remains robust across various robustness tests and adjustments for endogeneity. Heterogeneity analysis shows that the higher the performance level of ESG in the host country, when there is no bilateral investment agreement, investment sensitive industries and high intangible assets enterprises, the effect of improving ESG performance to promote enterprises’ choice of green space investment mode is more significant. The mechanism analysis indicates that improving ESG performance primarily boosts corporate total factor productivity, which in turn effectively strengthens the willingness to choose the Greenfield Investment mode for corporate OFDI. We incorporates ESG advantages into classical OLI theory, combining it with the productivity threshold of The New-New Trade Theory, thereby enhancing the contemporary relevance and applicability of international investment theory.</p>