We study how multinational companies may propagate Environmental, Social, and Governance (ESG) practices through subsidiaries in foreign countries with stricter ESG policies. Using staggered regulatory changes in a host country’s ESG strictness as an exogenous shock, we find that multinational firms with subsidiaries in countries that increased ESG strictness would significantly increase their R&D investments, build more green inventions in domestic operations, and have higher ESG ratings. Cities with more multinationals exposed to foreign ESG regulatory changes experience a greater reduction in air pollutant emissions. Our results are consistent with the argument that multinationals promote and propagate ESG practices across countries, likely to sustain access to finance in a foreign country with high ESG standards.