Decoding ESG: Consumer Perceptions, Ethical Signals and Financial Outcomes

Stacie F. Waites ()
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Stacie F. Waites: Department of Marketing, University of North Carolina Wilmington, Wilmington, NC 28407, USA

JRFM, 2025, vol. 18, issue 7, 1-16

Abstract: This study investigates how consumers respond to firm communications emphasizing Environmental, Social and Governance (ESG) dimensions. Through experimental design, how consumers distinguish among ESG components and how each affects behavioral finance outcomes, including purchase intentions, willingness to buy and brand trust is assessed. Results confirm that consumers perceive the ESG dimensions as distinct from a non-ESG control message. However, the Social and Governance dimensions are perceived as closely related. Importantly, all three dimensions—Environmental, Social, and Governance—significantly improved behavioral outcomes, supporting the persuasive power of ESG messaging. Mediation analyses reveal that perceived ethicality drives these effects across all dimensions, while perceived authenticity plays a stronger mediating role for social messaging. These findings contribute to finance literature by illuminating the consumer-level mechanisms through which ESG communication influences firm value and offer strategic insights for both practitioners and investors seeking to leverage ESG as a market signal.

Keywords: ESG; behavioral finance; brand trust; authenticity; perceived ethicality (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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