Original Research

The impact of environmental, social and governance performance on brand value: The role of the digitalisation level

Ying Wang, Jiang Cao, Xiao Cai
South African Journal of Business Management | Vol 55, No 1 | a4448 | DOI: https://doi.org/10.4102/sajbm.v55i1.4448 | © 2024 Ying Wang, Jiang Cao, Xiao Cai | This work is licensed under CC Attribution 4.0
Submitted: 19 December 2023 | Published: 16 May 2024

About the author(s)

Ying Wang, Department of Marketing and E-Commerce, College of Business Administration, Chaohu University, Hefei, China
Jiang Cao, School of Business Administration, Dongbei University of Finance and Economics, Dalian, China
Xiao Cai, School of Business Administration, Dongbei University of Finance and Economics, Dalian, China

Abstract

Purpose: Studying the role of environmental, social and governance (ESG) performance in enhancing brand value is strategically important for promoting sustainable development.

Design/methodology/approach: Using panel data for 126 different brands over 10 years, we empirically analyse the impact of ESG performance on brand value, considering the moderating role of the digitalisation level.

Findings/results: Firstly, the impact of ESG performance on brand value exhibits a U-shaped relationship. Secondly, the digitalisation level negatively moderates the U-shaped relationship. Thirdly, the effect of ESG performance on brand value is mainly on the sub-items of environment and social responsibility, while the effect of governance is not significant.

Practical implications: Firstly, firms should recognise the complex relationship between ESG performance and brand value, and strive to find a balance between economic benefits and sustainable development. Secondly, firms can utilise digital technology and platforms to communicate and interact with consumers, integrating ESG principles into their daily brand activities. Thirdly, investments in environmental and social responsibility are more meaningful for improving brand value.

Originality/value: Firstly, our study adds value to corporate social responsibility (CSR) and ESG literature by investigating the non-linear impact of ESG performance on brand value. Secondly, we replenish the mechanistic study about how ESG performance affects brand value. Thirdly, we open the black box of the effect of single indicators (E/S/G) on brand value, including the specific direction and strength.


Keywords

ESG performance; brand value; reputation signals; digitalisation level; U-shaped relationship.

JEL Codes

M14: Corporate Culture • Diversity • Social Responsibility; M21: Business Economics; M31: Marketing; Q01: Sustainable Development

Sustainable Development Goal

Goal 12: Responsible consumption and production

Metrics

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