This study aims to investigate the effect of Environmental, social, and corporate governance (ESG) rating on the cost of bank loan, and further investigate the moderating effect of credit rating. Using a sample of companies listed on Taiwan Stock Exchange and Taipei Exchange from 2016 to 2021, this paper examines the effect of ESG rating score on bank loan cost (loan spread). The empirical results show that as the firm’s ESG rating score increases, the cost of bank loan decreases, consistent with the risk mitigation view. Taking into account the moderating effect of the company's credit rating, this study finds that the mitigating effect of better ESG rating scores on bank loan costs becomes more pronounced when the credit rating is classified as investment grade, which indicates lower company risk. In addition, when considering the impact of rating changes and the reasons for the changes, we found that the negative relationship between ESG and bank borrowing costs is more pronounced when the firm's credit rating is upgraded and when the rating is adjusted due to profitability conditions, suggesting that credit rating results can moderate the relationship between ESG and bank borrowing costs. In addition, this study found that the above relationship is more pronounced for companies that have published ESG reports and undergone third-party verification, with higher ESG rating scores leading to a more significant reduction in bank borrowing costs.