China’s continued advancement of its carbon market policy signifies a shift from a command-and-control to a market incentive-based environmental regulation system. Accurately assessing the policy effects of the carbon market as an environmental regulatory tool is crucial for achieving carbon peak and neutrality. This paper uses ESG environmental scores and financial data from A-share listed companies, employing a BP neural network model improved by principal component analysis to estimate the carbon emission intensity of these companies. It also uses a multi-timepoint DID model to empirically test the impact of the national carbon emission trading market in the power sector on the carbon emissions and environmental performance of these companies. The results show that the national carbon market significantly reduces carbon emissions and improves the ESG environmental scores of companies in the power sector. It also enhances corporate environmental performance by boosting innovation levels in emission control. Consequently, China should gradually expand the range of industries covered by the carbon market, encourage companies to increase their innovation efforts, and enhance pollution control capabilities through technological updates.