This study explores how Chinese multinational enterprises (MNEs) responded to the U.S.-China trade war by adjusting their Environmental, Social, and Governance (ESG) strategies in the home country. Based on social identity and stakeholder theories, we propose that Chinese MNEs enhance their domestic ESG performance in to strengthen their national identities and meet stakeholder expectations during geopolitical crises. Using the U.S.-China trade war as a quasi-natural experiment, we analyze sample from 1,216 Chinese-listed MNEs spanning 2009–2023. Our results show that MNEs increase their ESG engagement in home country in response to geopolitical crises, with stronger effects for state-owned enterprises and MNEs with lower levels of internationalization. Furthermore, negative media coverage amplifies the positive impact of geopolitical crises on ESG performance. This study contributes to the literature on response strategy to geopolitical crises by adding new evidence about how MNEs adapt their ESG strategies in their home country during geopolitical crises.
