This study examines a major judicial reform in China—the staggered establishment of Environmental Courts (ECs)—to assess how increased legal scrutiny affects corporate environmental behavior. Using a difference-in-differences approach on A-share listed firms from 2009 to 2022, we find that the presence of ECs leads firms to increase ESG decoupling, thereby widening the gap between their public environmental commitments and actual implementation. We argue that while ECs generate strong external pressure for environmental legitimacy, the legal consequences of misreporting environmental information remain relatively mild. As a result, firms are reluctant to incur the substantial conformity costs. Instead, they strategically adopt symbolic environmental practices to signal alignment with regulatory expectations without undertaking substantive change. This response is more pronounced in regions with greater environmental attention and enforcement, and among firms exhibiting strong organizational inertia, which hampers genuine compliance. Notably, this appears to be a short-term coping strategy, as we find evidence of a gradual re-convergence between disclosure and performance over the long run. This study contributes to the literature on institutional responses to legal reforms by uncovering the complex behavioral patterns firms adopt under judicial pressure. It identifies both institutional and firm-level conditions that foster ESG decoupling, offering important implications for the design of effective environmental governance and regulatory oversight.