Understanding the Impact of ESG on Brand Trust and Customer Engagement

Businesses all over the world are paying more attention to environmental, social, and governance (ESG) investment initiatives. However, few studies discuss its impact on customers' attitudes and brand perception. The purpose of this research was to verify the causal relationship between ESG initiatives, brand trust, and customer engagement as perceived by customers in Thailand. An online survey was requested, and a total of 175 participants were chosen for data analysis. To conduct statistical analysis, partial least squares structural equation modeling (PLS-SEM) was used with the SMARTPLS3 program. The findings showed that the three elements of ESG have significant positive effects on brand trust and customer engagement. The result of the mediation analysis revealed that brand trust significantly mediates the causal association between the three elements of ESG and customer engagement. The environmental pillar of ESG (B = 0.527) has the largest impact on brand trust, followed by the social (B = 0.315) and governance (B = 0.239) pillars. On the one hand, the strongest predictor of customer engagement is the social pillar of ESG (B = 0.594), followed by the environment (B = 0.513) and the governance (B = 0.181) pillars. Additionally, it was established that the value created by businesses’ ESG initiatives could have a direct effect on brand trust and customer engagement. Therefore, the study’s objectives are to increase the diversity of scholarly perspectives on ESG and to offer valuable marketing implications for companies that desire to implement ESG strategies. Doi: 10.28991/HEF-2022-03-04-03 Full Text: PDF