Protective Role of <scp>ESG</scp> Disclosure in Firm Valuation During Global Crisis: Evidence From Institutional Investor Ownership

ABSTRACT This study investigates crisis‐period environmental, social, and governance (ESG) disclosure research by examining how ESG disclosure protects firm value during major global public crises. The pandemic is a severe exogenous shock generating synchronized global uncertainty. Using panel data regression analysis of U.S. public firms, we find that superior ESG disclosure significantly enhances firm value during systemic crisis. This protective impact is amplified in companies that have a greater proportion of long‐term institutional ownership, confirming investor time horizons as critical moderators. In addition, economic policy uncertainty (EPU) systematically dampens ESG disclosure's value‐protective capacity through resource constraints and market sentiment channels. These results reconceptualize ESG disclosure as a conditional strategic asset whose efficacy depends on institutional investor composition and macroeconomic uncertainty levels. This study advances ESG literature by demonstrating that the value‐protective role of ESG disclosure during crisis is intensified by long‐term institutional ownership, while EPU serves as a catalyst for reversing the insurance effects of ESG disclosure. Our work pioneers invest in temporal heterogeneity and EPU as critical boundary conditions. The findings challenge generalized ESG benefit assumptions while offering actionable guidance for embedding ESG disclosure within crisis resilience frameworks.