Exploring the relationship between sustainability perceptions and brand value: how and why does perceived sustainability affect brand value?

Purpose Previous research examining the association between brand value and sustainability has largely focused on corporate sustainability efforts measured through environmental, social and governance indices, rather than on customer perceptions of those efforts. Within the brand value chain framework, customer perceptions of brand actions are key to generating financial brand value. However, prior research focus on sustainability performance has overlooked the crucial role of customer perceptions in shaping brand value. To address this gap, this study aims to explore the effects of customer-perceived sustainability on brand value. Furthermore, this study examines the drivers (mediators) that explain the impact of customer-perceived sustainability on brand value and the variables that determine a higher or lower impact (moderators). Design/methodology/approach Using brand value data from Interbrand, and customer perception data from Brand Finance’s Brand Equity Monitor, a global panel-based survey with more than 150,000 respondents, the authors conducted mediation and moderation analyses to test their hypotheses. Findings The analysis shows that customer perceived sustainability has a positive impact on brand value. Furthermore, the findings suggest that perceived quality mediates this effect. The findings provide clarity for brand managers on how sustainability affects financial brand value and emphasize the importance of linking sustainability commercial communications to product performance to increase brand value. Originality/value Among the growing body of literature that explores the link between sustainability and brand value, to the best of the authors’ knowledge, this study is the first to focus specifically on perceptions of sustainability rather than sustainability actions.