The construction of innovative cities has become an important starting point for implementing the national innovation-driven strategy and building an innovative country, which is of great significance for achieving high-quality development of the Chinese path to modernization. This study focuses on how to enhance the ESG (Environmental, Social, and Governance) performance of manufacturing enterprises under the opportunities brought by national innovation city construction and how to stimulate the intrinsic dynamics of manufacturing enterprises during this process. These issues hold vital theoretical and practical significance for China’s manufacturing sector to implement new development concepts, promote high-quality development, and move towards a manufacturing powerhouse. Based on panel data from 299 A-share manufacturing listed companies in Chinese cities from 2006 to 2021, this paper uses the PSM-DID method to study the impact of innovative city construction policies on the ESG performance of manufacturing enterprises and the endogenous capability mechanism of enterprises. The research results indicate that the construction of innovative cities can promote the improvement of the ESG performance of manufacturing enterprises in the jurisdiction. The dynamic capabilities of the three dimensions of adaptability, absorption capacity, and innovation capacity of manufacturing enterprises have different strengthening effects on policy promotion of ESG improvement. However, the strengthening mechanism of the coupling and coordinated scheduling of their dynamic capabilities system is obvious. Further research based on heterogeneity indicates that: under high pollution heterogeneity, innovative city construction has a more significant positive impact on the ESG performance of highly polluting manufacturing enterprises, while its positive impact on the ESG performance of low-pollution enterprises is not significant; under the heterogeneity of urban digital development levels, the improvement effect of innovative city construction on the ESG performance of manufacturing firms is not significant in the case of cities with higher digitalization levels, while the improvement effect is significant in cities with lower digitalization levels. Compared with the existing similar studies, the characteristics and marginal contributions of this study are mainly as follows: firstly, it explores the improvement effect of national innovative city construction policies on the ESG performance of manufacturing enterprises, thereby expanding the research on the evaluation of the effects of national innovative city construction policies; secondly, it explores the mechanism of the dimensions of the dynamic capability system and their coupling effects in the process of national innovative city construction to promote the high-quality development of manufacturing enterprises taking into account the environment, society and governance. It also reveals the critical role of the synergistic effects of various dimensions of the dynamic capability system in the high-quality sustainable development of manufacturing enterprises; thirdly, it expands the research on the differences in the impact of national innovative city construction on the ESG performance of manufacturing enterprises from perspectives of property rights attributes, high pollution characteristics, and urban digitalization level heterogeneity, and provides empirical evidence for using policy effects to improve the ESG performance of manufacturing enterprises. The research conclusions of the paper provide insights and policy references for the evaluation of the policy effects of national innovative city construction, the mechanism of improving the ESG performance of manufacturing enterprises, and how innovative city construction can promote high-quality development of the real economy.