This paper examines whether ESG-linked bank lending is associated with firm decarbonisation and green activities such as target setting, research and development spending, and green patenting. Using a global panel of firms receiving green loans (1,118) or sustainability-linked loans (1,687) between 2016 and 2024, I combine loan-level data from DealScan with firm-level financials from Eikon and Orbis, and patenting data from Orbis IP. I find that companies taking sustainability-linked loans set targets prior to loan issuance, and have associated emissions reductions, but not increased green patenting. In contrast, green loans are positively associated with subsequent increases in green patenting, but not with near-term reductions in carbon emissions. These findings suggest firms use these instruments based on differing motivations. The results underscore the importance of distinguishing between loan structures when evaluating the role of bank lending in the climate transition.