Unveiling the Power of ESG: How it Shapes Brand Image and Fuels Purchase Intentions - An Empirical Exploration

Nowadays, with a widespread increase in awareness of environmental concerns, the ESG concept has been acknowledged as one of the most vital strategic movements for firms. This paper explores the effect of ESG activities on brand image and customers’ purchase intentions. The moderating effects of a range of sociological factors are also investigated. Based on 168 samples of Thai participants, survey research with an online questionnaire tool was employed to collect the data with structural equation modelling (SEM) to test hypotheses and verify the conceptual framework of this study. The results showed that all environmental, social, and governance activities significantly affect brand image and customers’ purchase intentions. For brand image as a consequence of ESG activities, social activities (b = 0.511) play the strongest role, followed by environmental (b = 0.482) and governance (b = 0.434) activities. On the other hand, environmental activities (b = 0.420) of the ESG concept strongly influence customers' purchase intentions, followed by social (b = 0.395) and governance activities (b = 0.309). Additionally, the moderation analysis found that the effects of ESG activities on brand image and purchase intentions vary depending on gender, age, and education level. These findings provide a deeper understanding of the ESG concept for both academics and practitioners. This paper offers implications and recommendations for further research based on the outcomes.


Introduction
Environmental, social, and governance (ESG) are progressively widely acknowledged as essential keywords for company management strategies. Environmental, social, and governance, or ESG, are non-financial factors that an organization should consider along with financial considerations when making investment decisions [1]. ESG mandates the evaluation of elements that have an impact on a company's value and sustainability over the long term, as opposed to the past, when financial performance was the only criterion for investing in a firm. ESG management is thus a crucial management technique for businesses that plan to attain sustainability in terms of the environment, society, and governance. Leading Thai organizations are giving ESG practices a high priority to improve efficiency, brand credibility, risk management, and investor appeal. The results of the survey were published in the "Thailand ESG and Sustainability Survey Report 2022" by Deloitte. Top Thai executives from 106 organizations in important industrial areas, including consumer products, energy, financial services, and media, were polled by the company. According to the survey, most Thai company leaders prioritize ESG knowledge in their firms, and they also incorporate ESG into their corporate

Literature Review and Hypotheses Development
Researchers and practitioners have become interested in the ESG idea since the UN Principles of Responsible Investment were released in 2006 and first emerged [3]. According to Miralles-Quirós et al. (2018), the ESG idea, which contains methods to have a positive social effect, is also recognized as the three new elements of corporate social responsibility (CSR) [4]. It has several definitions, incorporating green, ethical, objective, effect, accountable, values, socially responsible, and sustainable. In the research literature, the words ESG and CSR are sometimes used interchangeably because ESG is derived from the more well-known concept of CSR. ESG is still a developing term, hence it lacks a clear and consistent definition. To guide and manage all the organization's affairs to serve the interests of stakeholders, ESG is a collection of activities that are connected to an organization's association with its ecological surroundings, its existence and interaction with people, and its corporate system of internal controls, according to the definition provided by the International Accounting Standards Board [5]. Three topics are covered under the ESG concept: environmental, social, and governance topics. Corporate climate policies, energy use, waste, pollution, the protection of natural resources, and the treatment of animals are a few instances of environmental challenges. ESG factors can be used to assess a company's exposure to environmental risks as well as how it manages such risks. The social activities of ESG refer to the connections a corporation has with its stakeholders. An organization may be assessed based on elements like rational compensation as well as its effect on the communities in which it operates. Corporate governance is the term used to describe a company's management and direction. To better comprehend how shareholder rights are viewed and respected, how leadership incentives fit with stakeholder anticipation, and what kinds of internal controls are in place to stimulate leadership accountability, ESG analysts will consider these and other variables [6].
Previous research has endeavored to verify the relationship between firms' social responsibility strategies and brand image. Earlier studies indicated the positive effect of firms' ESG initiatives on customer attitudes towards brands such as brand perception [7], brand image [8], brand reputation [9,10], brand trust [11], brand valuation [12], and brand loyalty [13]. The economic effects of socially responsible strategies, particularly its influence on brand image and reputation, are examined by Reinhardt et al. (2008) [14]. It goes through how businesses can improve their brand image and get a competitive edge by participating in CSR activities like ESG initiatives. Lourenço et al. (2012) look at the connection between brand value and CSR. It concludes that organizations with robust CSR programs, including ESG initiatives, can have a beneficial impact on brand value, enhancing both brand perception and financial performance [15]. This Nielsen report offers information on what consumers expect in terms of sustainability. It draws attention to the effects of ESG initiatives on brand perception and consumer behavior and stresses the growing significance of sustainability in purchasing choices [16]. Thus, based on the above theoretical arguments, this study proposes that: H1: ESG activities will have a positive effect on brand image.

H1a. Environmental activities will significantly affect brand image.
H1b. Social activities will significantly affect brand image.

H1c. Governance activities will significantly affect brand image.
Earlier studies also found a link between ESG implementation and customers' purchasing intentions. The potential adverse consequences of ethical product qualities, such as sustainability and social responsibility, on customers' product preferences, are examined by Luchs et al. (2010) [17]. It clarifies how customers might view ethical qualities as less desirable when making purchases. The intention-behavior gap among ethical consumers is examined by Carrington et al. (2014), who also look at the variables that affect how ethical intentions are translated into real purchasing behavior [18]. It offers perceptions of the intricate connection between moral intentions, such as support for ESG initiatives, and shopper behavior. Consumer attributions for corporate social responsibility initiatives, including ESG initiatives, and their influence on consumer attitudes and actions were discovered by Ellen et al. (2006) [19]. It offers information on how customers view and react to a company's socially conscious initiatives. Therefore, based on the above theoretical arguments, this study proposes that:

H2: Engaging in ESG activities positively influences customers' purchasing intentions.
H2a. Environmental activities will significantly affect the customer's purchasing intention.
H2b. Social activities will significantly affect the customer's purchasing intention.
H2c. Governance activities will significantly affect the customer's purchasing intention.

H3:
The brand image will have a positive effect on the customer's purchasing intention.
Additionally, there has been previous evidence that firms' social responsibility practices influence customers' perceptions and behaviors differently. Kahreh et al. (2014) examine how gender differences in a basic variable affect corporate social responsibility [20]. The findings demonstrated that, even though women's orientation to CSR is generally superior, there are no appreciable distinctions between male and female orientations to CSR. Employee attitudes such as CSR demandingness, trust, and satisfaction are examined by Rosati et al. (2018) to see if differences in gender, age, and educational attainment affect them [21]. According to the research, male employees generally have a little bit more faith in and satisfaction with CSR performance than their female counterparts. Graduates are generally more content, slightly more demanding, and more trustworthy than non-graduates. It is interesting to note that there is no discernible difference between older and younger staff. When Koirala & Charoensukmongkol (2020) investigated the potential moderating effect of income level on the relationship between employees' perceptions of CSR initiatives implemented by their companies and their work attitudes in the areas of employee commitment and job satisfaction, they discovered that employees with higher incomes had a positive relationship between CSR perception and job commitment that was noticeably stronger than that of employees with lower incomes [22]. Therefore, based on the above theoretical arguments, this study proposes that:

H5d: Income moderates the effect of ESG activities on purchase intention.
The conceptual framework and proposed hypotheses of this study can be illustrated in Figure 1

Design of Research and Data Collection
This study used a research survey approach and an online questionnaire as its primary data collection tool. This study used a retrospective survey method that looked at prior occurrences to examine how the samples related to the results. The survey data were analyzed using partial least squares structural equation modelling (PLS-SEM). Most of the responses were initially screened with screening questions to validate the suitability of the samples. The initial question posed to respondents was, "Have you ever seen any initiatives or campaigns that show a brand's commitment to social, environmental, and ethical business practices while facilitating contacts and transactions between you and brands or businesses?" Respondents who selected "yes" as their response are included in the survey. The respondents were prompted to reflect on their most recent interactions with ESG practices used by a specific company. Based on how they view the brand's ESG initiatives, they respond to the questionnaires. 168 completed surveys were received, which is within the acceptable range of 100 to 200 instances for PLS-SEM analysis [23].

Measurement Scale Development
The survey respondents' demographic data were gathered in the first section of the questionnaire. Then, 5-point Likert-scale questions were employed to estimate the major elements of our proposed conceptual model. For the ESG construct, ESG comprises three elements, which are environmental, social, and governance activities. The authors adopted and modified 12 items (four items for environmental, four items for social, and four items for governance) from earlier studies [24][25][26].  [29,30]. The details of the questionnaire items are illustrated in Appendix I.

Sample Profile
A total of 168 suitable respondents from the online surveys that were performed were chosen for further examination after any missing or insufficient responses were eliminated. The following findings are related to the respondents' demographic traits. 53.5% of the sample's participants were female, making up the bulk of its participants. A high level of education was demonstrated by the respondents' 44.5% bachelor's degree holding rate. Most participants (55.3%) reported being single and unmarried status. Additionally, a sizeable part of the respondents-29.1% of the samplewere between the ages of 26 and 35.

Evaluation of the Measurement Model
The proposed model was tested in two steps, which are the measurement model and the structural model [31]. To evaluate the instrument's validity and reliability as well as the research framework, partial least-based structural equation modelling (PLS-SEM) with the Smart PLS program was used. The measuring model's findings for internal consistency reliability, convergent validity, and discriminant validity are shown in Tables 1 and 2. Cronbach's alpha value and the composite reliability (CR) values were used to analyze the internal consistency among the components in each construct. The Cronbach's alpha values of all constructs ranged from 0.759 to 0.911, which were higher than the threshold value of 0.7 as suggested by Nunnally (1978) [32]. The composite reliability (CR) values of all constructs were higher than the suggested value of 0.7, ranging from 0.899 to 0.925. These evaluations ensured reliability and internal consistency among these constructs.  The convergence validity of the measurement model was assessed based on factor loadings and average variance extracted (AVE). In the beginning, a total of 21 measurement items were used for the confirmatory factor analysis. The AVE values of the constructs that were applied to assess the common variance in a specific construct were higher than the suggested value of 0.5, ranging from 0.666 to 0.755. These assessments implied validity in the convergence of the measurement model. Discriminant validity was examined using the Fornell-Larcker criterion and the Heterotrait-Monotrait (HTMT) ratio criterion to determine how much a construct differs from other constructs within its components. For the Fornell-Larcker criterion, Table 2 shows that the square root of the AVE for each construct had the highest value compared to other correlation values, showing a relationship with other factors. The Heterotrait-Monotrait (HTMT) ratio values of all constructs are also below 0.850, which is a good sign for the data's discriminant validity. In short, the internal consistency, reliability, convergent validity, and discriminant validity of the measurement model all met the criteria. This shows that the measurement model used in this study is appropriate for further structural model analysis.

Evaluation of the Structural Model
The next step in the PLS-SEM is to analyze the structural model after analysing the measurement model and determining that it is satisfactory. It includes assessing the collinearity, path coefficients, significant value, determination coefficients R 2 , prediction value Q 2 , the magnitude of the effect f 2 of the model, and hypothesized relationships among the constructs. The main effects of the three ESG dimensions on brand trust and customer engagement are shown in Figure 2 and Table 3, along with the main effect of customer engagement on brand trust.  To avoid problems with multicollinearity, the structural model's VIF values were checked and found to be less than 5. Using PLS predict, the Q 2 values were confirmed by comparing the errors in the PLS path model's predictions with predictions based on the sample mean. 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. The R 2 values for brand image and purchase intention are 0.245 and 0.296, respectively, which are greater than the recommended threshold (0.10) by Falk and Miller (1992) [33]. Cohen (1988) described the assessment criteria for f 2 and suggested that a f 2 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 [34]. The findings demonstrated that environmental activities have a large impact on both brand image (f 2 = 0.204) and purchase intention (f 2 = 0.184).
The social activities have a large impact on the brand image (f 2 = 0.255) and a medium impact on purchase intention (f 2 = 0.156). The governance activities have a medium impact on the brand image (f 2 = 0.198) and a small impact on purchase intention (f 2 = 0.127). And brand image has a large impact on purchase intention (f 2 = 0.351). These findings demonstrate coherence between path coefficients and f 2 results. Therefore, H1, H2, and H3 are supported. The predictive relevance of the model was then determined by using Stone-Geisser's Q 2 value. If Q 2 is greater than zero, predictive relevance is established. In this situation, brand image and purchase intention were determined to have Q 2 values of 0.216 and 0.271, respectively. Consequently, the predictive validity of the model is established. According to the parameters' loading factors, social activities (b = 0.511) have the biggest effects on brand image, followed by environmental (b = 0.482) and governance (b = 0.434) activities. As opposed to this, environmental (b = 0.420), social (b = 0.395), and governance (b = 0.309) activities of the ESG concept have a significant impact on customers' purchasing intentions.
To examine the moderating effect of sociological factors on the causal relationship among ESG activities, brand image, and purchase intention. The authors used a median-split technique [35]. Age, education, and income moderating variables were initially converted to binary variables by the authors. The ratios of the differences in factor loadings between sociological factor groups were calculated. After assessing the associated models for every binary group separately, the authors analyzed the regression weights and critical ratios for group differences (see Tables 4 and 5).  Note: Younger (under or equal to 45 years of age); Older (over 45 years of age); Low (lower than a bachelor's degree); High (undergraduate degree or higher); Low income (less than or equal 978 USD); High income (more than 978 USD); ***p < 0.05  Table 4 reveals that there are statistically significant differences between the genders and age groups for the impacts of environmental, social, and governance activities on brand image. Regarding education and income, we found no statistically significant difference between the high-and low-income groups and the high-and low-education groups. Thus, the results of the moderating effect partially support H4. For H5, sociological factors moderate the effect of ESG activities on purchase intention. The authors found only a statistically significant difference between age but not gender, education, or income in environmental and social activities and a statistically significant difference between age and education in governance activities (see Table 5). The ESG activities had a stronger impact on purchase intention for younger individuals than for older participants. The results of the moderating effect partially support H5.
To summarize the hypothesis verification, the finding demonstrates that all environmental, social, and governance initiatives have a significant impact on brand image. The finding demonstrates that all environmental, social, and governance initiatives have a significant impact on brand image. These findings are in line with the previous study by Wu & Wang (2014), which found that the impression of social responsibility is crucial in determining company image [36]. Customers' perceptions of a brand are improved when they believe it to be socially responsible. Increased trust, trustworthiness, and goodwill connected with the brand can result from positive ESG perception. Customers frequently see brands that practice social responsibility as being more moral, considerate, and dedicated to having a positive impact on society and the environment. Participating in ESG initiatives benefits many stakeholders and can improve ties between stakeholders and companies. As a result, stakeholders view the organization favorably, considering it to be ethical, trustworthy, and socially responsible [37].
The result of this study also reveals that ESG activities affect consumers' intentions to purchase. This finding is consistent with earlier studies by Lee & Shin (2010) showing that customers' purchase intentions and their awareness of social responsibility initiatives are positively correlated [38]. Environmental activities have the greatest impact on the brand's image as a result of ESG activities, followed by social and governance activities. On the other hand, social and governance activities of the ESG concept have a significant impact on customers' purchase intentions. The result confirms earlier findings that these different dimensions of ESG (environmental, soc ial, and governance initiatives) have varying effects on how customers perceive and engage with brands [39]. Depending on the consumer's evaluation processes, the effect of perceived CSR on brand image varies as well and has a favorable valence [40,41]. According to the moderation findings, there are differences in how ESG activities affect brand image and purchase intentions based on gender, age, and educational attainment. The findings are in line with Haski -Leventhal et al.
(2017), who found that in comparison to younger age groups, older age groups had more favorable CSR attitudes [42]. Diversity in educational background can affect ESG disclosure [43]. The perception of social responsibility depends on gender differences [44,45].

Conclusions
The goals of this study are to examine the relationship between ESG activities, brand image, and customers' purchase intentions as well as the influence of several sociological variables, including gender, age, education, and income, on that relationship. To test hypotheses and validate the theoretical underpinnings of this study, survey research using an online questionnaire tool was employed to collect data from 168 samples of Thai people. The results showed that environmental, social, and governance (ESG) activities have a considerable impact on brand perception and consumer purchase intentions. The investigation also indicated that variables like gender, age, and educational attainment affected how ESG initiatives affect brand perception and purchase intentions.
Our study provides some practical implications. Firstly, integrating environmental, social, and governance concerns into corporate plans and operations should be a top priority for corporations. This calls for the adoption of sustainable practices, the promotion of positive social effects, and the maintenance of ethical and transparent governance. Companies may improve their brand image and positively affect consumers' purchasing intentions by doing this. Secondly, brands should effectively communicate with customers about environmental, social, and governance actions. Transparently disseminate information on governance processes, social responsibility efforts, and sustainability projects via multiple communication platforms. Customers are better able to comprehend and appreciate a company's dedication to ethical business practices thanks to clear and persuasive communication, which ultimately affects how they perceive a brand and whether they would make a purchase. Thirdly, brands should adjust their communication tactics in light of the societal variations in the effects of ESG operations. Conduct market research to learn how attitudes and behaviors connected to ESG are influenced by gender, age, and educational attainment. Create individualized messages and communication strategies to engage and effectively reach various demographic groups.
Despite this study's theoretical and practical contributions, its limitations are acknowledged. First, there may be additional factors that influence telemedicine customer engagement, such as medical history and whether they present to the clinic with an acute or chronic condition. Firstly, the authors only considered a small subset of components in this study that we thought would be affected by ESG. In further research, additional factors like brand loyalty and word-ofmouth (WOM) could be empirically tested. Increased ESG engagement is frequently accompanied by higher project costs and cash flows. Financial considerations such as the cost of capital, the cost of equity, and cash flow should be taken into account in further analyzing the value of ESG activities. Second, Thailand was where the study's data were collected. It is important to be cautious when extrapolating the findings to other countries with diverse cultures. The results of cultural differences can also be captured through this future research.

Data Availability Statement
The data presented in this study are available on request from the corresponding author.

Funding
The authors received no financial support for the research, authorship, and/or publication of this article.

Institutional Review Board Statement
Not applicable.

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

Declaration of Competing Interest
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.