The impact of environmental, social, and governance (ESG) practices on customer behavior towards the brand in light of digital transformation: perceptions of university students

Abstract

In the digital transformation era, environmental, social, and governance (ESG) practices increasingly shape customers’ behavior (CB) toward brands, serving as frameworks that not only correspond with consumer values but also impact their trust, loyalty, and engagement with companies. However, prior studies have not extensively investigated this issue. Hence, this study, based on stakeholder theory, seeks to examine the effect of ESG on CB toward brands under the moderating effect of DT. To this end, data was collected from 306 students from Yemeni universities via an online questionnaire and analyzed using PLS-SEM via SmartPLS software. The results showed a direct relationship between ESG and CB. Specifically, the environmental dimension had the strongest effect on CB, followed by the social dimension and governance dimension. The results also found that DT moderates the relationship between the environmental dimension of ESG and CB, in contrast, the effect of DT on the relationship of the social dimension of ESG or the governance dimension of ESG on CB is not significant.