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As a market-based financial instrument, green credit is one of the key drivers for constructing green financial system. Green credit policy (GCP) can guide capital flow from high-energy consumption and high-pollution industries to technologically advanced emerging industrial sectors, so as to support the development of green industries and curb the emissions of polluting industries. In order to explore the extent to which the goal of green credit policy in China has been achieved, based on the micro data of China's listed enterprises from 2009 to 2017, this paper explores the impact of "Green Credit Guidelines" (2012 Guidelines) policy on the green transformation of heavy polluting industries (HPIs) by using a Difference in Differences (DID) and Propensity Score Matched-Difference in Differences (PSM-DID) models. We then analyze the mechanism between GCP and green transformation of HPIs and identify the heterogeneous effects of GCP on the green transformation of HPIs. The results show that the 2012 Guidelines significantly promote the green transformation of HPIs, through debt financing constraints and equity financing constraints. The effect of 2012 Guidelines on green transformation of small-scale and private enterprises is more pronounced. However, the positive effect of 2012 Guidelines on the green transformation of HPIs has not been sustained in the long term. Our study provides an insight for decision makers to manage green transformation of HPIs from the GCP perspective, by informing the economic consequences of GCP and pushing the industrial transformation towards green development. • Difference in differences is used to explore the impact of green credit policy on green transformation. • Debt financing constraint and equity financing constraint are main impact mechanisms. • The results are robust to a battery of robustness checks. [ABSTRACT FROM AUTHOR]