From ESG to DESG: The Impact of DESG (Digital Environmental, Social, and Governance) on Customer Attitudes and Brand Equity

ABSTRACT

Due to the advances in digital technology, the environmental, social, and governance (ESG) concept has been transformed into the digital environmental, social, and corporate governance (DESG) model, which can be realized as a potentially vital strategic movement for sustainable business practices in the contemporary digital era. Nevertheless, there is a lack of empirical research evidence on how firms’ DESG practices impact customers’ attitudes and brand equity. The purposes of this study were (1) to investigate the effect of DESG initiatives on customers’ attitudes (CA) and brand equity (BE), and (2) to explore how those impacts vary based on the diversity of socio-economic attributes. An online survey was conducted, and the data were analyzed by a structural equation modeling (SEM) technique. Based on 212 samples of Thai citizens’ experiences with firms’ DESG initiatives, the results revealed that DESG has a significant positive direct effect on CA. The mediation analysis revealed that CA fully mediated the relationship between DESG and BE. The results of a second-order confirmatory factor analysis of the DESG construct found that the digital social dimension (b = 0.775) played the strongest role in explaining DESG, followed by the digital environmental (b = 0.768) and digital governance (b = 0.718) dimensions. The moderation analysis found that the impact of DESG on CA was stronger for younger groups than older populations. Additionally, the group with a higher formal education level seemed to exhibit higher levels of CA than those with a lower level. Our study is one of a few endeavors to clarify the effects of DESG from the customer’s side, and suggests several implications and recommendations.