This study examines whether and how carbon trading policy impacts the financialization of non-financial firms, using China emission trading scheme as a natural experiment. We show that the carbon trading policy has effectively long-term inhibitory effect on corporate financialization. Our findings are robust to possible result bias and more precise control group. In addition, we explore potential channels through which carbon trading policy can affect financialization, and find that it contributes to curb financialization by reducing financing constraints. Finally, we show that the relationship between carbon trading policy and financialization of non-financial companies is moderated by company’s ownership, region and industry competition.