Trade War Uncertainty and ESG Transparency: Implications for Investor Trust in Southeast Asia

This study examines how trade war–induced uncertainty affects the transparency of Environmental, Social, and Governance (ESG) disclosures and its implications for investor trust in Southeast Asia. Drawing upon institutional, signaling, and agency theories, the study argues that macroeconomic turbulence caused by trade conflicts can distort corporate disclosure behavior and weaken investor confidence. Using a panel dataset of 312 publicly listed firms across Indonesia, Malaysia, Thailand, Vietnam, and Singapore from 2017 to 2023, we employ fixed-effects regression and mediation–moderation analyses to test four hypotheses. The results show that trade war uncertainty significantly reduces ESG disclosure transparency, particularly in countries with weaker regulatory enforcement. Reduced transparency, in turn, erodes investor trust, as reflected in declining analyst forecast accuracy, lower institutional ownership, and rising ESG controversies. Mediation tests confirm that the negative effect of trade war uncertainty on investor trust is partially transmitted through deteriorating ESG transparency, while strong regulatory quality mitigates this impact. These findings highlight the critical role of institutional strength in sustaining market trust and non-financial reporting integrity during periods of geopolitical uncertainty. The study contributes to the literature on financial reporting under macroeconomic shocks and offers policy insights for regulators and corporate leaders in enhancing ESG accountability across emerging ASEAN markets.