The Drivers of ESG Uncertainty: Evidence from G7 Countries

This study examines how geopolitical risk, economic policy uncertainty, and tourism uncertainty are associated with ESG uncertainty across G7 countries using monthly data from November 2002 to February 2025. The findings reveal positive and statistically significant associations between these three sources of uncertainty and ESG uncertainty, alongside substantial differences across countries. The analysis also identifies differential changes in ESG uncertainty between European and other G7 economies following the Russia–Ukraine war, although evidence of pre‐existing differences calls for caution in drawing causal conclusions. Theoretically, the study advances the understanding of ESG uncertainty as a multidimensional phenomenon shaped by geopolitical, policy‐related, and sector‐specific uncertainty rather than financial‐market conditions alone. It also highlights the importance of country‐specific exposure in explaining heterogeneous uncertainty relationships. From a practical perspective, the findings support clearer regulatory roadmaps; integrated monitoring of geopolitical, policy‐related, and tourism uncertainty; and scenario‐based ESG investment planning adapted to national and sectoral exposure. These recommendations offer practical guidance for policymakers, firms, and investors while remaining conditional on the study's associational evidence.