How Do Economic Policy Uncertainty Affect the Environment, Society, and Governance?

This research investigates the impact of economic policy uncertainty (EPU) on each of the components of sustainability (environmental, social, and governance) (ESG) in European and American companies. This research uses the maximum available data for a more detailed and comprehensive investigation. The European and American companies (a total of 15,740 company‐years) in 11 categories, including basic materials, consumer discretionary, consumer staples, energy, financials, health care, industrials, real estate, technology, telecommunications, and utilities, were categorized and estimated separately in four separate models based on the panel data model. The research results indicate a significant positive relationship between EPU and ESG. If the EPU index increases, the ESG index also increases. Also, the results show that if EPU rises, disclosure quality in the context of ESG‐related issues will improve. Examining the relationship between ESG and EPU can help companies formulate effective and sustainable strategies and decisions and play a key role in achieving ESG goals. Improving transparency and providing more detailed information about measures taken in the field of ESG will give shareholders more confidence in the sustainable performance of companies.