This study examines the relationship between firms’ reported environmental, social, and governance (ESG) performance and litigation risk, and investigates whether external assurance, particularly assurance provided by Big Four accounting firms, conditions this association. Using a global panel of 4726 publicly listed non-financial firms across 75 countries from 2010 to 2023, we proxy litigation risk using ESG-related controversies and exploit substantial cross-country variation in legal environments and ESG disclosure regimes. Contrary to the view that stronger ESG performance shields firms from legal exposure, we find that higher ESG performance scores are associated with higher litigation risk. This pattern is consistent with increased scrutiny, higher stakeholder expectations, and concerns about the credibility of self-reported ESG information. Importantly, this positive association weakens when firms obtain external assurance and reverses when ESG information is assured by Big Four firms, but only in countries without mandatory ESG disclosure requirements. In contrast, Big Four assurance does not moderate the ESG-litigation relationship in mandatory disclosure environments, suggesting that regulatory oversight partially substitutes for the credibility provided by assurance. Additional analyses show that the ESG-litigation relationship weakens after 2019, coinciding with the global institutionalisation of ESG reporting standards, and varies with the strength of collective redress mechanisms. Overall, the findings highlight that ESG performance can function as a double-edged signal and that assurance quality and legal context play a critical role in determining whether ESG engagement mitigates or amplifies firms’ litigation exposure. This study contributes to the literature by integrating ESG performance, assurance, and legal environment into a unified framework of litigation risk. It extends prior studies by showing that the effectiveness of ESG practices and assurance mechanisms is contingent on country-level legal environments. Empirically, it advances measurement by using ESG controversies as a forward-looking indicator of litigation risk. In practice, the findings will help managers identify assurance strategies that are most effective in mitigating litigation risk across diverse legal environments. At the policy level, regulators will gain deeper insights into the importance of standardised assurance guidelines and their implications for the credibility of ESG performance across jurisdictions.