There is substantial evidence indicating that enterprises are negatively impacted by climate risk, with the most direct effects typically occurring in financial domains. This study examines A-share listed companies from 2007 to 2023, employing text analysis to develop the firm-level climate risk indicator and investigate the influence on corporate financial risk. The results show a significant positive correlation between climate risk and financial risk at the firm level. Mechanism analysis shows that the negative impact of climate risk on corporate financial condition is mainly achieved through three paths: increasing financial constraints, reducing inventory reserves, and increasing the degree of maturity mismatch. To address potential endogeneity, this study applies instrumental variable tests, propensity score matching, and a quasi-natural experiment based on the Paris Agreement. Additional tests indicate that reducing the degree of information asymmetry and improving corporate ESG performance can alleviate the negative impact of climate risk on corporate financial conditions. This relationship is more pronounced in high-carbon emission industries. In conclusion, this research deepens the understanding of the link between climate risk and corporate financial risk, providing a new micro perspective for risk management, proactive governance transformation, and the mitigation of financial challenges faced by enterprises.