As an important part of Chinese green manufacturing systems, green factory certification is a vital tool to accelerate green transformation in the industries sector. Based on national-level green factory certification data, this study systematically examines the impact mechanism and economic consequences of green factory certification on firms’ environmental protection investment from the perspective of peer effects. The study finds that there is a significant peer effects in green factory certification, that is, the environmental protection investment of focal firms is increased by the influence of certified green factories within the same region and industry. The conclusion is still valid through a series of robustness and endogenous tests. Moreover, the peer effects of green factory certification on the promotion of environmental protection investment of firms are stronger in large-scale firms, non-state-owned firms, heavily polluting firms and on-high-tech firms. Furthermore, the study reveals that the peer effects of green factory certification are more pronounced in promoting prevention-based environmental protection investment compared to governance-oriented environmental protection investment. Finally, this study discovers new evidence that the peer effects of green factory certification can promote firms’ green innovation performance and regional environmental performance. This study provides empirical evidence to assess the effectiveness of green factory certification in fulfilling its role as a leading exemplar. Additionally, it offers practical insights from the perspective of peer effects to inspire and promote the green transformation of firms.