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Article

Sustainability Matters: Unravelling the Power of ESG in Fostering Brand Love and Loyalty across Generations and Product Involvements

by
Wilert Puriwat
1 and
Suchart Tripopsakul
2,*
1
Chulalongkorn Business School, Chulalongkorn University, Bangkok 10330, Thailand
2
School of Entrepreneurship and Management, Bangkok University, Pathum Thani 12120, Thailand
*
Author to whom correspondence should be addressed.
Sustainability 2023, 15(15), 11578; https://doi.org/10.3390/su151511578
Submission received: 30 May 2023 / Revised: 17 July 2023 / Accepted: 19 July 2023 / Published: 26 July 2023
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Abstract

:
The Environmental, Social, and Governance (ESG) concept is one of the potentially crucial strategic movements for sustainable business practices in the digital era. Despite this, there is a dearth of empirical evidence on the effect of ESG practices on customers’ brand perception and whether the effects of ESG on brand perception differ depending on product involvement and generational differences. This study aims to assess the effect of ESG on brand love and loyalty in product categories with high and low involvement, as well as in older and younger age groups. Utilizing the partial least squares structural equation modelling (PLS-SEM) approach, we conducted quantitative empirical research using an online questionnaire to examine the proposed model. The findings, based on a sample of 156 Thai respondents, indicate that ESG is significantly and positively related to brand love and loyalty. The result of the mediation analysis revealed that brand love partially mediates the effect of ESG on brand loyalty. The result of the moderation analysis indicates that product involvement has a moderating role between ESG and brand love, and between ESG and brand loyalty. The effects of ESG on brand love and loyalty are larger for low-product-involvement respondents than for high-product-involvement respondents. In addition, the effect of ESG on brand love was found to be stronger among younger age groups than among older age groups. The research underlines the importance of ESG and expands the existing understanding of the concept. Our study, which gives various implications and recommendations, is one of the rare attempts to verify the effects of ESG from the standpoint of customers.

1. Introduction

Environmental, social, and governance (ESG) has become a buzzword in worldwide firm management plans. ESG is an acronym for “environmental, social, and governance” and refers to the non-financial issues that a business should also consider when making investment decisions [1]. ESG is becoming more crucial for organizations in the current global marketplace. ESG focuses on a business’s adherence to social responsibility, sustainable business practices, and corporate governance. Businesses must ensure that their operations, methods, products, and services are in line with society’s values as customers become more conscious of the environmental effects and the ethical standards of the brands they support. ESG is, therefore, more important than ever for businesses aiming to develop loyal customers and a favourable brand image [2]. Traditional models and presumptions regarding the creation of brand value may no longer be adequate, considering the development of digital technology in the online business environment. ESG, or networks of people and businesses that are constantly exchanging information, is becoming a more prominent feature of today’s world [3]. Since non-financial ESG factors are now recognized as imperative in deciding a business’s investment value and sustainability, it has become important to think about how businesses can reinforce their brands as well as positively influence customer attitudes through ESG management strategies.
Advancements in digital technology have made it possible for businesses to carry out and promote their environmental, social, and good governance policies via digital platforms [4]. Businesses are now able to use digital platforms and advanced technologies to implement and disseminate their good governance, social, and environmental initiatives. For example, Microsoft has a long history of dedication to sustainability and has just announced a plan to achieve carbon neutrality by 2030. Microsoft has made significant investments in clean energy sources, adopted cutting-edge data analytics and artificial intelligence (AI) technology to boost efficiency, supported green initiatives in the communities where it operates, and invested in research and development to create new clean technologies to achieve this goal [2]. To measure the environmental impact of their supply chains, from manufacturing to transportation and product use to product recycling, Lenovo is developing supply chain data management systems and embracing complete material disclosure and life cycle assessment. Manufacturing companies now have access to big data and machine learning to identify solutions that maximize production scheduling choices and consider a wide range of complex elements, such as client orders and employee skill levels. As a result, the productivity of the plant rises, the carbon footprint is diminished, and the well-being of the workers is enhanced [5]. Another example is the Metaverse. Avatars can engage in events and play games while moving about in three dimensions. Businesses in the Metaverse can open online stores and market their products to avatars, or virtual people. Meetings can be planned in the Metaverse by corporations and groups, regardless of their actual locations. Meetings and social gatherings in the Metaverse are predicted to reduce travel, which will lower the CO2 emissions brought on by physical commutes utilizing several forms of transportation. Around 20% of global CO2 emissions are related to transportation, with road travel accounting for 75% of these emissions [6].
The influence of ESG measures and reporting on customers’ attitudes and brand value toward sustainability has received limited attention from researchers [1,7]. Understanding the nuances of research in Thailand, or any country for that matter, requires a deep understanding of the specific cultural, social, economic, and political contexts. In the context of Environmental, Social, and Governance (ESG) initiatives, Thailand has shown a growing interest, especially in the corporate sector. However, the way Thai consumers perceive and respond to ESG initiatives might be different from consumers in other countries due to their unique cultural context. When it comes to product involvement and brand loyalty, Thai consumers might have different priorities compared to consumers in other countries. Furthermore, there is a lack of empirical evidence to support claims that the effect of ESG on brand perception varies according to sociological factors such as generational differences and an attribution product such as product involvement. Consequently, the objective of this research is to assess the impact of ESG on brand love and loyalty, as well as how those impacts differ based on the type of product involved and generational differences. This study presents a novel approach by holistically examining the influence of ESG practices on brand love and loyalty, taking into account product involvement and age differences. It bridges a knowledge gap by associating ESG initiatives with brand perceptions in the unique context of Thai consumers. The remaining parts of the paper are grouped as follows: Section 2 presents a review of the relevant literature on ESG, brand love, brand loyalty, generational difference, and product involvement. The conceptual framework and hypothesis formulation are illustrated in Section 3. Section 4 explains the research methods utilized to acquire the data. The data analysis results are described in Section 5. Section 6 consists of the study’s discussion and conclusion, followed by limitations and recommendations for future study in Section 7.

2. Literature Review

2.1. Environmental, Social, and Corporate Governance (ESG) in the Digital Era

ESG refers to an organization’s interactions with its natural environment, its interactions with people, and its internal control system and practices for directing, administering, and managing all organizational matters to serve stockholders’ interests [8]. Previous research has revealed that customers appreciate ESG brands over their competitors because brand value can be more positively affected when ESG is a central component of what a brand stands for to its customers [3]. According to Landrum (2017), approximately 70% of customers are willing to spend more for brands that invest in ESG, and about 80% of millennials anticipate that their favourite companies will publicly state that they do business sustainably and ethically [9]. The degree of brand effect and perceived brand quality serve as a positive and indirect medium through which consumer perception of ethicality influences brand valuation [10]. According to Lee (2016), empathy increases customers’ willingness to pay for prosocial goods by lowering their price sensitivity toward them [11]. As a result of current digital technologies’ ability to quickly change functionality, many organizations now realize how this innovative technology promotes true compliance with ESG goals. They can support businesses in attaining critically important targets that are becoming more significant to employees and customers, rather than competing with one another [12]. For example, Royal Dutch Shell, one of the leading artificial intelligence (AI) corporations, has integrated analytics and maintenance throughout its worldwide operations. AI is a beneficial addition to ESG initiatives because it can monitor the reduction of energy emissions and CO2 emissions. To examine operational efficiency, lower energy consumption, and eventually raise gas and condensate output, Shell has now started integrating digital twin technology into its gas plants. This state-of-the-art technology aids ESG by locating cost-saving alternatives in particular parts of a process that could otherwise be seen as wasteful [13]. Di Vaio, Palladino, Hassan, and Escobar (2020) explored how Artificial Intelligence (AI) can help build sustainable business models (SBMs) and examined how AI and machine learning can be used to manage resources sustainably, in line with the UN’s Sustainable Development Goals. The study suggests that businesses, researchers, and policymakers should focus more on using AI to achieve sustainability goals [14]. It suggests that AI can help businesses meet the SDGs and calls for more focus on the use of AI in SBMs by researchers, businesses, and policymakers [14,15,16]. In the present digital era, ESG integrates concepts for ethical digital transformation with more sustainable business practices. The result is a cutting-edge organizational structure fit for the twenty-first century. Accordingly, businesses should highlight the ESG concept as one of the crucial strategic initiatives to create organizations that uphold the sustainability of environmental, social, and economic systems. We refer to initiatives by businesses that pursue sustainable development objectives across applications of technology that create, use, transfer, or electronic source data as ESG practices in this study. As these activities can also be done digitally, they are not constrained by physical boundaries and are more scalable, which improves their impact. By focusing on the creation of environmental and social value as a vital element of an economic offer, these ESG activities also aim to eliminate the conflict between profit and purpose.

2.2. Brand Love and Brand Loyalty

Brand love is the extent to which a satisfied customer feels emotionally devoted to a specific brand [17]. Brand love is a concept that explains how a group of satisfied customers feel emotionally. Positive brand perceptions among customers have an impact on assessments and emotional responses [18]. Previous research has shown that satisfied customers become loyal customers of a firm or brand [19]. Brand love is a multi-dimensional construct of customer-brand relationships that includes a strong emotional bond and customers’ sustained loyalty to the brands [18]. The triangular theory of love [20], which outlines three interconnected elements of interpersonal love, namely, intimacy, passion, and commitment, is related to early studies on brand love. Several studies began to create measurements specifically for brand love [17,18,21,22]. Carroll and Ahuvia (2006) created a quantitatively one-dimensional measure of the consumer’s satisfaction with a specific brand. The measurement model emphasized the affective elements, which include passion, attachment, positive evaluation, positive emotions, and declaration of love [17]. Using a mixed-methods approach to explore the concept of love, Albert et al. (2008) established the feeling assessment of brand love [23]. The sense of brand love and the unique bond people have with the brands they adore using eleven dimensions. These eleven aspects, which are made up of both cognitive and affective elements, consist of passion, duration of the relationship, self-congruity, dreams, memories, pleasure, attraction, uniqueness, beauty, trust, and a declaration of effect [23]. Batra, Ahuvia & Bagozzi (2012) classified brand love into seven dimensions based on the concept of consumers’ declaration of love towards a brand, which involve positive attitude valence, self-brand integration, positive emotional connection, separation distress, long-term relationship, passion-driven behaviour, and attitude strength [18]. Brand loyalty is described as a firmly held commitment to consistently repurchase a preferred product in the future, leading to repetitive same-brand purchases despite potential marketing efforts that could lead to switching behaviour [24]. Brand loyalty contains three subdimensions, including cognitive, attitudinal, and behavioural loyalty [24]. The emotional bond between a brand and its customers can be expressed by attitude loyalty. Behavioural loyalty refers to a consumer repeatedly purchasing that brand. When examining the dynamics of brand-love relationships, theories on interpersonal romantic love should be used with caution [25]. Another way to study brand love is through two different streams of research. Basic studies of human emotions, decision-making, the theory of action, and neuroscience make up the first, while studies of multivariate statistics and their connections to measurement, theory, hypothesis testing, and the philosophy of science make up the second [26]. Using a quantitative neuroimaging meta-analytic method, Watanuki (2022) examined the similarities and differences between the brain regions that were active in brand love and interpersonal romantic love relationships. The findings demonstrated that each romantic connection is supported by a unique collection of brain mechanisms and mental processes [25]. Brand love has been demonstrated to affect the attitudes and behaviours of people with respect to brand loyalty [27], and brand loyalty increases when a consumer loves a specific brand [14]. As satisfied consumers are thought to become loyal customers, it is asserted that brand love fosters loyalty that is beyond reason [28]. Based on this concept, scholars contend that consumers may develop emotional attachments to businesses or brands that are comparable to those they have for people they love [12,13,14,15,16,17,18,19,20,21]. A strong emotional connection between the customer and the business may serve as the cornerstone of a long-term relationship. Initial feelings of positivity for a brand can grow into a lasting bond, and brand love can turn into brand loyalty [23].
It makes sense that authorities, society, and shareholders are pressuring businesses to take part in ESG initiatives. ESG initiatives are employed as a marketing strategy to create favourable consumer perceptions. Customers who are conscious of a company’s ESG initiatives may engage themselves with that company [1]. A company can differentiate itself from its rivals by committing to prosocial projects. A company’s commitment to ESG could help it develop its own social identity [29,30]. If customers begin to associate the company with a favourable identity, then this identity may prove to be crucial [31]. According to prior literature, there is a distinction between brand loyalty and brand love. Brand love is a multi-dimensional construct of consumer-brand connections that includes customers’ sustained loyalty to the brands [18]. On the other hand, the degree of the association between an individual’s relative attitude and repeated purchases is known as brand loyalty. In other words, brand loyalty is a result or consequence of brand love [17,18]. Previous research by Lee and Rhee (2023) on studying the impact of ESG on customers’ perceptions of brands found that while environmental initiatives failed to enhance brand image, attitude, and attachment, social and governance activities significantly improved these areas. Furthermore, these social and governance activities were also found to positively influence brand loyalty, a factor mediated by the brand’s image, attitude, and attachment [32].

2.3. Product Involvement and Generational Difference as Moderators

Product involvement refers to the object’s relevance in light of the customer’s needs, values, and interests [33]. Product involvement is described by Jain and Srinivasan (1990) as an invisible state of motivation, excitement, or interest induced by a specific stimulus [34]. Previous studies have demonstrated that consumer attitudes, brand preferences, perceptions, and decision-making processes are all highly impacted by product involvement. Customers are typically classified as either having a high or low level of product involvement [35]. Products with a high level of involvement are essential to customers. A high-involvement product necessitates the consumer giving a great deal of thought and attention before making a purchase. High-involvement purchases typically involve some risk, such as a monetary, social, or psychological risk, and are tied to the customer’s ego and self-image. Low-involvement products, on the other hand, are ones that the customer does not place much importance on. Low-involvement products are typically inexpensive and present little risk to consumers if they choose incorrectly. According to Zdravkovic (2013), the degree of customer involvement and interest in the product determines the amount of involvement [36]. Previous research found that depending on how much a product was involved, ESG initiatives had a different impact on how customers perceived them [37]. The study by Zhou, Poon, and Huang (2012) revealed that CSR effects are greater in low product involvement conditions [38]. Based on this literature, the authors propose the hypothesis that product involvement moderates the impacts of ESG on brand love and loyalty.
Age (generation) is a crucial component that defines an individual’s attitude toward a company’s corporate social responsibility, according to earlier research [39,40]. The study by Shauki (2011) shows that CSR concern is higher among older adults than among younger generations [41]. Wisse, van Eijbergen, Rietzschel, and Scheibe (2018) discovered discrepancies in CSR perception across age groups because CSR practices address emotional needs that are prioritised when society’s future time perspective declines [42]. Haski-Leventhal, Pournader, and McKinnon (2017) also found that people’s positive feelings about CSR projects change with age [43]. Age was a factor in Ruegger and King’s (1992) investigation of how 2196 business students perceived morality [44]. According to their findings, age should be taken into consideration while making moral choices. Younger people are often more competent and content with business offerings than older ones, according to Cho and Hu’s (2009) research, and ageing is associated with a rise in scepticism and mistrust [45]. Nevertheless, previous studies by Eweje and Brunton (2010) and Gholipour, Nayeri, Mehdi, and Mehdi (2012) have not found considerable evidence to support the concept that age influences the perception of CSR [46,47]. Consumer age also has a large impact on marketing strategies for brands. While having less purchasing power than older consumers, young people nevertheless play a key role in brand sales, making them one of the most appealing and developing demographics for brands. There is a widespread belief that for brand managers who are developing new brands, young consumers are an easy target since they have less established attitudes about brands and exhibit less concern for brand loyalty by favouring new products than older consumers [48]. Literature has looked at attitudes and behaviour differences between younger and older consumers from a variety of angles. Its effect on ESG, however, is not well described in the literature [49]. While some scholars mention that both CSR and ESG overlap and are sometimes used interchangeably [50], there is a lack of empirical evidence to verify whether there is a difference in the effect of ESG on brand love and loyalty. Based on what has been reviewed, we propose the hypothesis that the effects of ESG on brand love and loyalty vary by generational difference (age).

3. Conceptual Framework and Hypothesis Development

Based on an earlier review of the literature, the research framework was created to investigate the relationship between brand love and brand loyalty using ESG as the antecedent. To test the moderation effects of product involvement and generational difference on the links among ESG, brand love, and brand loyalty, product involvement and generational difference constructs are integrated into the proposed model. Figure 1 depicts the proposed model for the conceptual framework.
To test the relationship between ESG, brand love, and brand loyalty with product involvement and generational differences as the moderators, the following hypotheses have been developed:
H1. 
ESG will have a positive, direct impact on brand loyalty.
H2. 
ESG will have a positive, direct impact on brand love.
H3. 
Brand love will have a positive, direct impact on brand loyalty.
H4. 
Brand love will mediate the effect of ESG on brand loyalty.
H5. 
The effect of ESG on brand love is moderated by product involvement, making it stronger for respondents with low product involvement than for those with high product involvement.
H6. 
The effect of ESG on brand loyalty is moderated by product involvement, making it stronger for respondents with low product involvement than for those with high product involvement.
H7. 
The effect of ESG on brand love is moderated by generational differences, making it stronger for older groups than for younger ones.
H8. 
The effect of ESG on brand loyalty is moderated by generational differences, making it stronger for older groups than for younger ones.

4. Research Methodology

A survey approach using an online questionnaire was used to investigate the proposed hypotheses. Utilizing a retrospective technique, respondents were asked to recall recent experiences with ESG initiatives of any organizations or brands, and then answer questions about their perceptions regarding ESG initiatives. One ESG effort in Thailand is by the energy company Banpu Plc, which is committed to social and environmental responsibility and wants to build sustainable businesses with the help of ESG. To grow in a sustainable way, the organization will continue with programs to promote contemporary energy technologies and produce clean energy. The other example is Thonburi Healthcare Group Plc (THG), which works to make sure that everyone has access to high-quality medical care, especially when they need specialist care right away to avoid getting sick or hurt. When compared to other private hospitals, tertiary care costs at Thonburi Hospital are 15–30% less. In addition, THG pays for cardiac centres in public hospitals that do not have an emergency room. This helps cut down on the time patients have to wait. THG is also investigating telemedicine to provide maternity care and treat strokes. As the country’s demographics shift, THG has invested in Jin Wellbeing County, a mixed-use development that offers senior housing together with medical care and services. THG decided to join the Thailand Carbon Neutral Network to assess and reduce one of its hospitals’ carbon impacts, with an eye toward a 50% decrease in energy usage and the adoption of smart designs for newly built facilities [51]. Banpu Plc and Thonburi Healthcare Group Plc (THG) were included in the study due to their differing industries, diverse ESG focus, established ESG practices, and relevance to the Thai context. This choice provides a comprehensive, practical, and locally specific perspective on the impact of ESG initiatives.
Partial least squares structural equation modelling (PLS-SEM) was employed to analyze the survey data. To validate the appropriateness of the samples, the respondents were primarily screened with screening questions. Respondents were initially asked, “Have you ever experienced any programs or campaigns that represent a company’s commitment to social, environmental, and ethical business practices while facilitating interactions and transactions between you and brands or businesses?”. Participants in the survey are respondents who answered “yes” to this question. A total of 156 completed surveys were returned, which falls within the range of 100–200 cases regarded as adequate for PLS-SEM analysis [52].
The questionnaires are divided into three sections: a preliminary screening question, typical data on respondents’ behavioural and demographic profiles, and construct measurement items. Items are scored on a five-point Likert scale, with (1) being strong disagreement and (5) being strong agreement. Environmental, Social, and Governance were the three components that made up ESG. The authors modified the survey questions from earlier studies [4,53,54,55,56,57,58,59,60,61,62]. Brand love was assessed employing a four-item scale adapted from the studies of Batra, Ahuvia, and Bagozzi (2012), and Le (2021) [18,63]. Brand loyalty was measured by 4 items adopted and modified by Mrad and Cui (2017) [64]. Product involvement was evaluated by 5 items modified from Karaatli (2015) [65]. Table 1 details the items for each construct in the study.

5. Results

5.1. Sample Profile

A self-completed online survey was utilized to obtain the data. Consumers were asked to recall their most recent experience with any firm’s attempts to implement or advertise their environmental, social, and good governance policies. They were then given a questionnaire to complete regarding their opinions of various ESG initiatives. Demographic characteristics were analyzed using descriptive statistics in SPSS. There were 156 valid questionnaires from the survey. According to Table 2, males made up 52.82% of participants, while females provided 47.18% of total responses. The majority of respondents (32.11%) were between the ages of 26 and 35, with a bachelor’s degree (49.5%).

5.2. Hypothesis Testing

To evaluate the presented hypotheses, PLS-SEM was employed. The questionnaire’s measurements were created using a five-point Likert scale. One of the factors that led to the selection of PLS-SEM was the non-normal distribution of the data, as PLS-SEM does not require assumptions of normality to be met. Typically, PLS-SEM is an excellent tool for developing new models or concepts in theoretical building applications. As this study examined the effect of ESG on brand love and brand loyalty, the authors used PLS-SEM to estimate parameters and verify the thorough causal link to attain this objective.

5.2.1. Evaluation of the Measurement Model

A bootstrapping method with 5000 samples was employed to test the assumptions [66]. The measuring model’s findings for internal consistency reliability, convergent validity, and discriminant validity are presented in Table 3. According to Hair, Black, Babin, and Anderson (2010), the outside loadings range from 0.726 to 0.910, which are all above 0.70 and are all statistically significant (p < 0.001) [67].
In Table 4, discriminant validity was examined using the Fornell-Larcker criterion. The square root of AVE for each construct had a higher correlation with each other than any other construct, which indicates discriminant validity. The Heterotrait-Monotrait (HTMT) ratio criterion was also utilized to validate discriminant validity.
All the ratios are below 0.850, which is a good sign for the data’s discriminant validity [64].

5.2.2. Evaluation of the Structural Model

The consistent PLS algorithm and bootstrapping were used for the structural model evaluation [68]. This method involved assessing the collinearity, path coefficients, significant value, determination coefficients R2, prediction value Q2, and magnitude of the effect f2 of the model [69]. To prevent multicollinearity issues, the VIF values for the structural model were validated to be less than 5 [70]. By contrasting the PLS path model’s prediction errors with simple mean predictions, the Q2 values were confirmed using PLS prediction. If the Q² value is greater than zero, the prediction error of the PLS-SEM results is lower than the prediction error of simply using the mean values. In that case, the PLS-SEM models show better predictive performance. Table 5 displays the R2, f2, and Q2 values, the path coefficients, and their significance. The R2 values for brand love and brand loyalty are 0.393 and 0.276 respectively, which are greater than the threshold (0.10) recommended by Falk and Miller (1992) [71]. Cohen (1988) described the assessment criteria for f2 and suggested that a f2 value of 0.02 is small, 0.15 is medium, and 0.35 is large, and there is no effect if the value is less than 0.02 [72]. The findings demonstrated that ESG has a very large impact on brand love (f2 = 0.648) and brand loyalty (f2 = 0.425). These findings demonstrate coherence between path coefficients and f2 results, as shown in Table 5. The predictive relevance of the model was then determined by using Stone-Geisser’s Q2 value. If Q2 is greater than zero, predictive relevance is established. In this situation, brand love and brand loyalty were determined to have Q2 values of 0.386 and 0.221, respectively. Therefore, the model’s predictive validity is confirmed.

5.2.3. Mediation Analysis

Zhao, Lynch, and Chen (2010) stated that to examine the effect of mediators, it is essential to test the independent variable’s direct effect on the mediator (p1), the mediator’s direct effect on the dependent variable (p2), and the independent variable’s direct effect on the dependent variable (p3). There is no mediation effect if p1, p2, and p3 are all insignificant [69]. If p1 and p2 are significant but p3 is not, there is full mediation. Full mediation occurs if p1, p2, and p3 are all significant [73]. The results shown in Table 6 reveal that brand love partially mediates the relationship between ESG and brand loyalty.

5.2.4. Moderated Mediation Analysis

To test the moderating effect of product involvement on the casual relationship among ESG, brand love, and loyalty, we adopted the concept of conditional mediation (CoMe) analysis in PLS-SEM [74]. According to Hayes (2018), the CoMe analysis method can be used to test how a mediator affects a mediated relationship [75]. The CoMe analysis unites mediation and moderation analyses to test hypotheses about how mediated relationships vary as a result of context or individual differences. An index of moderated mediation quantifies the effect that a moderator has on a mediated relationship and was used to test the significance of moderated mediation [75]. In the statistical model diagram, the mediated effect of ESG on brand loyalty through brand love depends on the level of product involvement if the impact of a moderator (ESG × PI) on a mediation variable (brand love) and the impact of the mediation variable (brand love) on a dependent variable (brand loyalty) are significantly different from zero. The results of the index of moderated mediation can be directly obtained from the specific indirect effect outputs (ESG × PI → Brand love → Brand loyalty) in the SmartPLS program [76]. The results revealed that the index value of product involvement for moderated mediation effect is significant (index = −0.144, SE = 0.054, t = 3.769, p < 0.001), as shown in Table 7. The results revealed that at the lower level of product involvement, the indirect effect of ESG on brand loyalty through brand love is higher in comparison to the indirect effect at high product involvement. This shows that with an increase in product involvement, the indirect effect of ESG on brand loyalty through brand love is reduced. Therefore, Hypothesis 5 is supported. We also examined the moderating effect of generational differences (age) on the casual relationship among ESG, brand love, and loyalty by adopting the CoMe analysis method. The results from the specific indirect effect outputs (ESG × Age → Brand love → Brand loyalty) showed that the index value of age for the moderated mediation effect is significant (index = −0.138, SE = 0.041, t = 3.382, p < 0.001). The results disclosed that at the lower level of age, the indirect effect of ESG on brand loyalty through brand love is higher in comparison to the indirect effect at the higher level of age. Thus, Hypothesis 7 is supported. For the moderating effects of product involvement and age on the causal relationship between ESG and brand loyalty, the authors found a significant moderating effect of product involvement (b = −0.151, SE = 0.040, t = 4.156, p < 0.001) but not age (b = −0.074, SE = 0.059, t = 1.271, p = 0.204). Consequently, Hypothesis 6 is supported, and Hypothesis 8 is not supported. The summary of mediation effects of product involvement and age is represented in Table 7 and Figure 2.
In Figure 2, the authors present the slope of moderation analysis. The blue lines in Figure 2A,B represent a low level of product involvement, whereas the green lines represent a high level of product involvement. The slopes of low product involvement are steeper than those of high product involvement, as shown in Figure 2A,B. This means that the relationship between ESG and brand love, and between ESG and brand loyalty is stronger for the low product involvement. Figure 2C,D depicts the moderating effect of age, with blue lines representing a low level of age and green lines representing a high level of age. The authors found that the slope of low age is significantly steeper than that of the high age in the relationship between ESG and brand love (Figure 2C) but not between ESG and brand loyalty (Figure 2D). This means that the relationship between ESG and brand love is stronger for the younger age group.

6. Discussion and Implications

The goals of this study were to discover how ESG affects brand love and brand loyalty, as well as how product involvement and generational differences mediate the relationship between ESG, brand love, and brand loyalty. Based on 156 samples of Thai respondents who experienced firms’ ESG interactives, PLS-SEM was employed to test the proposed hypotheses and model. The results show that ESG significantly impacts brand love. This result is consistent with earlier research by Rodrigues and Costa (2017), and Quezado, Fortes, and Cavalcante (2022), which found that adding value to the community and making a positive impact through sustainability activities such as CSR or ESG initiatives will result in increased feelings of love for a brand when customers perceive a greater environmental, social, and good governance commitment to it, as indicated by ESG practices [77,78]. The result also reveals that ESG has a significant effect on brand loyalty. This finding is consistent with the findings of Akbari, Mehrali, SeyyedAmiri, Rezaei, and Pourjam (2019), and He and Lai (2014), who found that companies’ sustainability initiatives have an impact on customer loyalty [79,80]. This result is also consistent with a previous study by Koh et al. (2022), which showed that perceived ESG had immediate positive effects on customers’ judgments of brands’ trustworthiness, image, and perceived quality [1]. Customers’ perceived ethical responsibilities toward brands may improve brand loyalty by enhancing positive symbolic and functional images. The mediation analysis of brand love as the moderator in the causal relationship between ESG and brand loyalty found that brand love partially mediates the effect of ESG on brand loyalty. This result aligned with Kim, Nobi, and Kim (2020)’s finding that the effect of perceived firms’ sustainability activities on brand loyalty is mediated by brand love [81]. Customers who perceive the business’s environmental, social, and good governance commitment actions as highly positive develop a strong love for the brand, which in turn makes them loyal to the brand. Our result confirms previous findings of Nawaz, Jiang, Alam, and Nawaz (2020) that brand love is one of the key components in creating brand loyalty; the more brand love people feel, the more loyal they will be to the brand [49]. In other words, brand love has important results and implications, including brand loyalty. With beloved brands, customers always make specific attitude promises, which increase brand loyalty. According to the findings of a multigroup analysis, the influence of ESG on brand love and loyalty is greater for low-involvement product groups than for high-involvement product groups. This finding is in line with the study of Zhou, Poon, and Huang (2012), which found that in conditions of low product involvement, the linkages between perceived firms’ environmental, social, and good governance commitments and consumer responses are stronger [38]. For the generational difference as a moderator of the causal relationship among ESG, brand love, and brand loyalty, we did not find a statistically significant difference between the younger and older age groups in the causal relationship between ESG and brand love. However, the moderation result revealed that the impact of ESG on brand loyalty is significantly higher in younger than older age groups. The finding is consistent with Kim, Kim, Im, and Choi (2021), who reported that customers’ perceptions of environmental, social, and good governance, as well as their views and behaviours toward those brands or businesses, are significantly influenced by their age [82].
This study’s findings have several managerial implications. Firstly, businesses should place more emphasis on ESG as one of the essential strategies to promote positive brand love and sustain brand loyalty. Advances in information technology and digital transformation enable corporations to carry out their environmental, social, and good governance commitments via digital platforms in less costly and more efficient ways. For example, solutions to optimize production scheduling decisions and navigate a wide range of complicated issues, including client orders, batch sizes, line capacity, and worker skill levels, have been made possible by big data and machine learning. As a result, the productivity of the plant rises, the carbon footprint is diminished, and the well-being of the workers on the shop floor is enhanced. IoT solutions enable businesses to track, analyze, and disseminate data in real-time, enabling them to take wise decisions more quickly and effectively. Secondly, our finding shows that the influences of ESG on brand love and brand loyalty are greater under a low-involvement product condition than under a high-involvement product condition. Thus, businesses need to understand the essence of the customer involvement level concept while developing an ESG strategy. To provide a more precise impression of ESG’s audiences, it may be necessary to separate ESG initiatives in terms of messages or messengers by adopting consumer product involvement characteristics. Thirdly, businesses need to take generational differences into account when implementing ESG strategies. The findings of this study revealed that ESG had a greater impact on brand loyalty in younger groups than in older groups. Age differences can also have an impact on how ESG and brand love are related. Younger consumers are regularly more vocal and involved in environmental and social issues and may be more likely to support brands that align with their values. If younger consumers believe a business is not meeting their ESG expectations, they may be more prepared to switch brands and pay a premium for environmentally friendly or socially responsible products. On the one hand, older consumers might likewise value ESG considerations, but they might put other aspects ahead of environmental and social issues, such as product quality, dependability, and customer service. The specific elements that influence consumer behaviour, nevertheless, might change with age. As a result, businesses should consider the target consumer groups they are trying to reach as well as the primary communication channels that are effective for them while promoting the ESG program.

7. Conclusions

The goal of this study was to determine how ESG affects customers’ love of and loyalty to a brand, as well as how product involvement and generational differences affect their casual relationships with each other. The findings showed that ESG was found to be a significant predictor of brand love and loyalty. The results of the mediation analysis revealed that brand love partially mediates the effect of ESG on brand loyalty. Product involvement was found to moderate the effect of ESG on brand love and loyalty, while generational differences were found to moderate only the effect of ESG on brand loyalty. This research has a few limitations. Firstly, only certain facets of brand love were measured in our study, leaving out additional multi-dimensional components such as anticipated separation distress, current self-identity, and frequent thoughts, so it may be difficult to verify all of its dimensions. For a deeper understanding of the impact of ESG on brand love, future research with more thorough measuring scales of brand love is advised. Secondly, this study was conducted in the context of Thailand; the findings should be thoughtfully generalized to other culturally different contexts to enhance their generalizability. Consequently, in the future, researchers may conduct comparative studies to examine how the theoretical framework works in different countries. Third, this study’s model included a leading variable called ESG that was used as the basis for conducting this research. Fourth, our moderate sample size may restrict broader applicability, the specific cultural and economic context of Thailand could limit international generalizability, the reliance on self-reported data that might introduce biases, and the selection of companies from only two industries and the cross-sectional design offers a static, one-time snapshot of consumers’ perceptions and attitudes. Future research should consider broadening the sample size and diversity, conducting the study in different cultural and economic contexts, including more industries, adopting a longitudinal design, and exploring additional factors such as consumer trust and corporate reputation.

Author Contributions

Conceptualization, W.P. and S.T.; Methodology, W.P. and S.T.; Software, W.P. and S.T.; Validation, W.P.; Formal analysis, W.P.; Investigation, W.P.; Resources, W.P.; Writing—original draft, W.P. and S.T.; Writing—review & editing, W.P. and S.T.; Supervision, W.P.; Project administration, S.T. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Informed Consent Statement

Participant consent was waived due to the minimal risk to the subjects involved.

Data Availability Statement

The datasets generated during and/or analyzed during the current study are not publicly available due to IRB stipulations but are available from the corresponding author on reasonable request.

Conflicts of Interest

The authors declare no conflict of interest.

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Sustainability 15 11578 g001 550
Figure 1. The conceptual framework of the study.
Figure 1. The conceptual framework of the study.
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Figure 2. The slope of moderation analysis results.
Figure 2. The slope of moderation analysis results.
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Table
Table 1. Observed variables and questionnaire constructs.
Table 1. Observed variables and questionnaire constructs.
ConstructsItemsObserved Variables
Refer to any programs or campaigns that represent a company’s commitment to social, environmental, and ethical business practices while facilitating interactions and transactions between you and the firm or brand, the (NAME)…
Environmental
dimension (ED)		ED1Takes every effort to reduce or get rid of negative environmental consequences.
ED2Minimizes resource usage without endangering the environment.
ED3Uses environmentally friendly materials with a strong commitment.
ED4Focuses on the effective management of waste and recycling disposal activities.
Social
dimension (SD)		SD1Respects culture, traditions, and social norms.
SD2Enhances societal well-being and people’s quality of life over the long term.
SD3Aids in the growth of society and the economy.
SD4Supports charities that work to improve the lives of disadvantaged people.
Governance
dimension (GD)		GD1Strictly adheres to the law when conducting its business.
GD2Is focused on fulfilling its obligations to its partners and stockholders.
GD3Has an ethical standards policy that takes precedence over financial performance.
GD4Goes out of its way to avoid and prevent corruption in its dealings with the country.
Brand love (BO)BO1How strongly do you feel compelled to use this firm (or brand)?
BO2Please describe the degree to which you believe you naturally “fit” with this firm (or brand).
BO3Please rate how well this firm (or brand) seems to match your personal preferences.
BO4Please describe the degree to which you anticipate having a long-term relationship with the firm (or brand).
Brand loyalty (BL)BL1I will buy this firm (or brand) next time.
BL2I intend to purchase this firm (or brand).
BL3I commit to this firm (or brand).
BL4In comparison to switching to other brands, I would be willing to pay more for this firm (or brand).
Refer to the kind of products that you recalled ESG initiatives…
Product involvement (PI) PI1You carefully select products of this type.
PI2This category of products is a topic that might be discussed at length.
PI3You feel the need to evaluate as many options as possible to ensure that you get the greatest product.
PI4You are concerned about the outcome of your decision while selecting products in this category.
PI5The brands of products you purchase make a substantial difference to you.
Table
Table 2. Sample profile.
Table 2. Sample profile.
ItemDescriptionSample(%)
GenderFemale8353.5
Male7346.5
Age18–253623.2
26–354629.8
36–454830.8
46–551710.6
More than 55 years95.6
Marital statusSingle8353.5
Married7145.3
Others21.2
EducationBelow undergraduate2314.7
Undergraduate7749.6
Postgraduate5635.7
Income (USD)Below 9786340.5
979–27946843.4
Above 27942516.1
Note: 1 USD = 32.68 Baht.
Table
Table 3. Validity and reliability assessments for the data.
Table 3. Validity and reliability assessments for the data.
ConstructsItemsOuter LoadingsCronbach’s αCRAVE
EDED10.8220.8580.9040.704
ED20.904
ED30.880
ED40.740
SDSD10.8720.8600.9060.707
SD20.910
SD30.822
SD40.749
GDGD10.8480.8570.9040.702
GD20.902
GD30.843
GD40.752
BOBO10.8760.8360.8910.671
BO20.822
BO30.815
BO40.761
BLBL10.8820.8340.8900.669
BL20.814
BL30.742
BL40.828
PIPI10.7270.8340.8830.602
PI20.834
PI30.726
PI40.787
PI50.798
ESGED0.8020.8560.8540.661
SD0.813
GD0.824
Note: ESG is the higher order construct of ED, SD, and GD; environmental dimension (ED); social dimension (SD); governance dimension (GD); brand love (BO); brand loyalty (BL); product involvement (PI); composite reliability (CR); average of variance extracted (AVE).
Table
Table 4. Discriminant validity analysis.
Table 4. Discriminant validity analysis.
Latent VariableBLBOEDGDSDPI
Fornell-Larcker criterion
BL0.818
BO0.4610.819
ED0.1630.3180.839
GD0.3890.5530.2620.838
SD0.3940.5000.2840.4400.841
PI0.3690.4330.1050.4450.2640.776
Heterotrait-Monotrait Ratio
BO0.546
ED0.1880.370
GD0.4540.6560.305
SD0.4710.5860.3270.509
PI0.4310.5170.1280.5250.314
Note: The square roots of the variance between the constructs and their measurements are represented by the diagonal elements in bold (AVE). ESG is a second-order construct; thus, its value is excluded in interpreting the Fornell-Larcker criterion and HTMT results.
Table
Table 5. Results of the structural model.
Table 5. Results of the structural model.
HHypothesized RelationshipPath Coefficientf2Results
1ESG → BL0.418 ***0.425Supported
2ESG → BO0.627 ***0.648Supported
3BO → BL0.348 ***0.193Supported
Note: *** p < 0.001; Effect Size (f2). Variance explained: BO (R2 = 0.393), and BL (R2 = 0.276). Predictive validity: BO (Q2 = 0.386), and BL (Q2 = 0.221).
Table
Table 6. Results of Mediation Testing.
Table 6. Results of Mediation Testing.
HRelationshipMediatorDirect EffectIndirect EffectType of Mediation
H4ESG → BLBO0.418 ***0.255 ***Partially mediation
Note: *** p < 0.001.
Table
Table 7. Results of moderated mediation analysis.
Table 7. Results of moderated mediation analysis.
H Original Sample (O)Sample Mean (M)SEt Valuesp Values
5ESG × PI → BO → BL−0.144−0.1460.0543.7690.000Supported
6ESG × PI → BL−0.151−0.1520.0404.1560.000Supported
7ESG × Age → BO → BL −0.138−0.1360.0413.3820.001Supported
8ESG × Age → BL−0.074−0.0780.0591.2710.204Rejected
Note: the index of moderated mediation results can be directly obtained from specific indirect effect outputs [(ESG × PI → BO → BL) and (ESG × Age → BO → BL)].
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MDPI and ACS Style

Puriwat, W.; Tripopsakul, S. Sustainability Matters: Unravelling the Power of ESG in Fostering Brand Love and Loyalty across Generations and Product Involvements. Sustainability 2023, 15, 11578. https://doi.org/10.3390/su151511578

AMA Style

Puriwat W, Tripopsakul S. Sustainability Matters: Unravelling the Power of ESG in Fostering Brand Love and Loyalty across Generations and Product Involvements. Sustainability. 2023; 15(15):11578. https://doi.org/10.3390/su151511578

Chicago/Turabian Style

Puriwat, Wilert, and Suchart Tripopsakul. 2023. "Sustainability Matters: Unravelling the Power of ESG in Fostering Brand Love and Loyalty across Generations and Product Involvements" Sustainability 15, no. 15: 11578. https://doi.org/10.3390/su151511578

APA Style

Puriwat, W., & Tripopsakul, S. (2023). Sustainability Matters: Unravelling the Power of ESG in Fostering Brand Love and Loyalty across Generations and Product Involvements. Sustainability, 15(15), 11578. https://doi.org/10.3390/su151511578

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