IMPACT OF ESG (ENVIRONMENT, SOCIAL, AND GOVERNANCE) ON BRAND IMAGE AND BRAND EQUITY THROUGH MEDIATING EFFECT OF CUSTOMER SATISFACTION

Abstract

Businesses all over the world are now paying a lot more attention to “Environmental, Social, and Governance (ESG)” issues
when they make choices. ESG contains things that aren't about money but are about being responsible and taking care of
the environment. Companies should think about these things as well as quantitative metrics when making strategy and
investment choices. As more people learn about climate change, ESG performance has become an increasingly essential
strategic consideration for corporations. This study investigates the impact of ESG practices on brand image and brand
equity, using customer satisfaction as a moderating factor. The researcher employed a quantitative research approach,
utilizing an online self-administered questionnaire to gather data from customers engaging with firms that actively pursue
ESG activities. We used Partial Least Squares (PLS) analysis with PLS-Graph software to test the hypothesis. This is called
Structural Equation Modelling (SEM). The results show that ESG practices have a favorable effect on both brand image
and brand equity. Furthermore, customer satisfaction plays a crucial role in moderating the connection between ESG
practices and brand results, making ESG initiatives more effective at changing how customers think about a brand, what
they associate with it, and how loyal they are. These results show that adopting ESG has two benefits: it improves the
company's reputation and financial worth, and it also builds consumer trust and long-term engagement.
The study enhances the existing ESG literature by emphasizing the pivotal role of customer satisfaction in mediating ESG's
impact on brand-related outcomes. Managers who want to improve ESG performance and brand positioning can use these
practical tips. They stress the need of including social and environmental factors in company strategy to achieve long-term
and sustainable commercial success.