Drawing on the dual performance goals paradox perspective, this study examines the relationship between climate risk and corporate ESG performance volatility using a sample of all A-share listed firms in China from 2014 to 2022. The results show that climate risk significantly increases corporate ESG performance volatility. Mechanism analysis indicates that this effect occurs as climate risk makes it more difficult for firms to maintain stable resource investments in ESG activities and induces managers to engage in strategic information disclosure. Heterogeneity analysis reveals that the impact of climate risk is mitigated when firms have greater access to external financial resources or face closer stakeholder attention. Further research demonstrates that corporate ESG performance volatility harms a firm’s market value and leads to firm long-term capital outflows. Furthermore, enhancing CEO cognitive complexity and improving corporate financial flexibility are both found to buffer the amplifying effect of climate risk on corporate ESG performance volatility.