This study explores the impact of sustainability practices on brand value in Sri Lanka’s fast-moving consumer goods (FMCG) sector, emphasising the mediating role of consumer perception. In recent years, sustainability has become an integral part of corporate strategy, with environmental, social and governance (ESG) practices increasingly shaping consumer expectations and business performance. However, limited empirical evidence exists on how these practices translate into consumer-driven brand value within emerging markets such as Sri Lanka. Addressing this gap, the study integrates stakeholder theory, the resource-based view and brand equity theory to examine how ESG practices influence consumer perception and subsequently, brand value. Adopting a quantitative, cross-sectional research design, data were collected through an online structured survey from 418 Sri Lankan consumers who had recently interacted with leading FMCG brands like Nestlé, Keells, Dilmah, Kotmale and Elephant House. Using partial least squares structural equation modelling via SmartPLS, the analysis confirmed that all three dimensions of sustainability (ESG) have significant positive effects on consumer perception. Moreover, consumer perception exhibited a strong, positive influence on brand value and served as a significant partial mediator between sustainability practices and brand value. The findings affirm that sustainability initiatives not only enhance corporate reputation but also serve as strategic assets that strengthen consumer-based brand equity in competitive markets. The study contributes to the growing body of research linking ESG integration to brand performance in emerging economies and provides actionable insights for managers seeking to enhance brand value through authentic, transparent and socially responsible practices.

Sustainability, environmental, social and governance, consumer perception, brand value, fast-moving consumer goods

Aaker, D. A. (1991). Managing brand equity: Capitalizing on the value of a brand name. Free Press.

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108

Brand Finance Plc. (2023). Brand Finance Sri Lanka 100 2023: The annual report on the most valuable and strongest Sri Lankan brands. Brandirectory. https://static.brandirectory.com/reports/brand-finance-sri-lanka-100-2023-full-report.pdf

Bryman, A., & Bell E. (2015). Business research methods (4th ed.). Oxford University Press.

Central Environmental Authority. (2023). Ban on single-use plastic products effective October 1, 2023 [Press release]. https://www.adaderana.lk/news/92871/sri-lanka-to-ban-single-use-plastic-products-from-oct-01

Cochran, W. G. (1977). Sampling techniques (3rd ed.). Wiley.

Collis, J., & Hussey, R. (2014). Business research: A practical guide for undergraduate and postgraduate students (4th ed.). Palgrave Macmillan.

Creswell, J. W., & Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (5th ed.). Sage Publications.

Delmas, M. A., & Burbano, V. C. (2011). The drivers of greenwashing. California Management Review, 54(1), 64–87.

Dilmah. (2023). Kindness. Dilmah Tea. https://www.dilmahtea.com/kindness/

Etikan, I., Musa, S. A., & Alkassim, R. S. (2016). Comparison of convenience sampling and purposive sampling. American Journal of Theoretical and Applied Statistics, 5(1), 1–4. https://doi.org/10.11648/j.ajtas.20160501.11

Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.2307/3151312

Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman.

Hahn, T., & Kühnen, M. (2013). Determinants of sustainability reporting: A review of the literature and its implications. Journal of Business Economics, 83(5), 533–557. https://doi.org/10.1007/s11573-013-0605-3

Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM) (2nd ed.). Sage Publications.

Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A primer on partial least squares structural equation modeling (PLS-SEM) (3rd ed.). Sage Publications.

Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/s11747-014-0403-8

Ishaq, M. I., & Di Maria, E. (2020). Sustainability countenance in brand equity: A critical review and future research directions. Journal of Brand Management, 27, 15–34. https://doi.org/10.1057/s41262-019-00167-5

Jagani, S., Saboorideilami, V., & Tarannum, S. (2024). Shaping brand attitudes through sustainability practices: A TSR approach. Journal of Services Marketing, 38(3), 369–382. https://doi.org/10.1108/JSM-08-2023-0345

Jayasinghe, S., & Fernando, R. (2021). Community-oriented sustainability initiatives and consumer perceptions in Sri Lanka’s FMCG sector: A qualitative study. Journal of South Asian Sustainable Development, 8(2), 123–137.

Joshi, A., Kale, S., Chandel, S., & Pal, D. K. (2015). Likert scale: Explored and explained. British Journal of Applied Science & Technology, 7(4), 396–403. https://doi.org/10.9734/BJAST/2015/14975

Keells. (2023). John Keells Group’s crisis response initiative records promising impact among multiple communities. https://keells.lk/posts/john-keells-groups-crisis-response-initiative-records-promising-impact-among-multiple-communities

Keller, K. L. (1993). Conceptualizing, measuring, and managing customer-based brand equity. Journal of Marketing, 57(1), 1–22. https://doi.org/10.2307/1252054

Khandai, S., Mathew, J., Yadav, R., Kataria, S., & Kohli, H. (2023). Ensuring brand loyalty for firms practising sustainable marketing: A roadmap. Society and Business Review, 18(2), 219–243. https://doi.org/10.1108/SBR-10-2021-0189

Kotler, P., & Keller, K. L. (2022). Marketing management (16th ed.). Pearson Education.

Krejcie, R. V., & Morgan, D. W. (1970). Determining sample size for research activities. Educational and Psychological Measurement, 30(3), 607–610. https://doi.org/10.1177/001316447003000308

Kumar, V., & Christodoulopoulou, A. (2014). Sustainability and branding: An integrated perspective. Industrial Marketing Management, 43(1), 6–15.

McEachern, M. G., Middleton, D., & Cassidy, T. (2020). Encouraging sustainable behaviour change via a social practice approach: A focus on apparel consumption practices. Journal of Consumer Policy, 43(2), 397–418. https://doi.org/10.1007/s10603-019-09431-0

Monfort, A., López-Vázquez, B., & Sebastián-Morillas, A. (2025). Building trust in sustainable brands: Revisiting perceived value, satisfaction, customer service, and brand image. Sustainable Technology and Entrepreneurship, 4(3), 100105. https://doi.org/10.1016/j.stae.2025.100105

Nestlé Lanka. (2023). Creating shared value and sustainability report 2023. Nestlé SA. https://www.nestle.com/sites/default/files/2024-02/creating-shared-value-sustainability-report-2023-en.pdf

NielsenIQ. (2022). The challenge of sustainability: How consumers fight for their values in everyday life. https://nielseniq.com/global/en/news-center/2022/the-challenge-of-sustainability-how-consumers-fight-for-their-values-in-everyday-life/

Noh, M., & Johnson, K. K. (2019). Effect of apparel brand’s sustainability efforts on consumer’s brand loyalty. Journal of Global Fashion Marketing, 10(1), 1–17. https://doi.org/10.1080/20932685.2018.1533565

Peloza, J., White, K., & Shang, J. (2013). Good and guilt-free: The role of self-accountability in influencing preferences for products with ethical attributes. Journal of Marketing, 77(1), 104–119. https://doi.org/10.1509/jm.10.0187

Saeidi, S. P., Sofian, S., Saeidi, P., Saeidi, S. P., & Saaeidi, S. A. (2015). How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of Business Research, 68(2), 341–350. https://doi.org/10.1016/j.jbusres.2014.06.024

Saunders, M., Lewis, P., & Thornhill, A. (2019). Research methods for business students (8th ed.). Pearson Education.

Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill-building approach (7th ed.). Wiley.

Srivastava, A., Yadav, S. S., & Pal, D. (2024). Exploring the prevalence of undernutrition and consumer’s knowledge, preferences, and willingness to pay for biofortified food. In R. Kumar, S. S. Yadav, & A. Srivastava (Eds), Food security and undernutrition: Issues, challenges, and policy pathways (pp. 109–123). Springer. https://doi.org/10.1007/978-981-99-4413-2_7

Sunday Times. (2024). Article about the retail industry’s contribution to GDP and employment. https://www.sundaytimes.co.za/

Unilever. (2022). Unilever sustainable living plan—Annual report. https://www.unilever.com/files/92ui5egz/production/0daddecec3fdde4d47d907689fe19e040aab9c58.pdf

Appendix

Survey Questionnaire

Instructions to Respondents:

For Section C–E, please indicate your level of agreement with the following statements by selecting the most appropriate response on a five-point Likert scale:

1 = Strongly Disagree | 2 = Disagree | 3 = Neutral | 4 = Agree | 5 = Strongly Agree

Section A: Screening Questions

 

1. Have you purchased or interacted with any of the following Sri Lankan FMCG brands in the past 6 months (Nestle, Elephant House, Kotmale, Dilmah, Keells)? (Yes/No)

2. Are you aware of any sustainability or corporate social responsibility (CSR) activities (e.g., eco-friendly packaging, community programmes) conducted by any of these FMCG brands in Sri Lanka? (Yes/No)

Section B: Demographic Information

3. What is your age?

[18–24] [25–34] [35–44] [45–54] [55+]

4. What is your gender?

[Male] [Female] [Prefer not to say]

5. What is your highest educational qualification?

[Up to A/L] [Diploma] [Bachelor’s] [Master’s or higher]

6. What is your monthly income range?

[Less than 50,000] [50,000–100,000] [100,001–200,000] [More than 200,000]

Section C: Your Views on Sustainability and Brands

C1: Environmental Sustainability Practices

7. This brand actively reduces environmental pollution in its operations.

8. This brand uses recyclable or biodegradable packaging materials.

9. This brand is committed to reducing its carbon footprint.

10. I believe this brand minimises its environmental impact.

C2: Social Sustainability Practices

11. This brand supports local communities through CSR programmes.

12. The company ensures fair labour practices and employee wellness.

13. This brand promotes health, education or well-being in society.

14. The brand contributes positively to Sri Lankan society.

C3: Governance Sustainability Practices

15. I trust the brand to be transparent about its sustainability actions.

16. The company communicates openly and ethically with consumers.

17. This brand adheres to ethical business practices.

18. I believe this brand’s company is accountable for its operations.

C4: Consumer Perception

19. I trust this brand because of its sustainability practices.

20. I have a positive image of this brand.

21. I am aware of the brand’s commitment to sustainability.

22. I believe this brand is socially responsible.

C5: Brand Value

23. I would recommend this brand to others.

24. I am willing to pay a higher price for this brand.

25. I feel loyal to this brand.

26. I believe this brand offers high value.

27. This brand’s reputation influences my purchasing decisions.