<p>Do customers punish a firm that harms the natural environment? We answer this question by examining the relationship between a firm’s environmental footprint and customers’ perceptions, as reflected in customer-based brand equity. Our empirical analysis shows that a firm’s environmental footprint is negatively associated with its brand equity. Furthermore, the firm’s advertising and CSR reputation aggravate this negative association. These results are consistent with the notion that customers view a large environmental footprint as a violation of the firm’s brand promise. Follow-up analysis indicates that the association between a firm’s environmental footprint and its brand equity is driven by resource use, rather than pollution, suggesting that customers interpret a firm’s high resource use as a promissory violation. Additionally, the firm’s environmental footprint is negatively associated with its brand stature but not its strength. The findings contribute to the environmental ethics literature and the brand-as-promise framework.</p>

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The Cost of Broken Promises: Does a Firm’s Environmental Footprint Affect Its Brand Equity?

  • Vivek Astvansh,
  • Nandini Ramani

摘要

Do customers punish a firm that harms the natural environment? We answer this question by examining the relationship between a firm’s environmental footprint and customers’ perceptions, as reflected in customer-based brand equity. Our empirical analysis shows that a firm’s environmental footprint is negatively associated with its brand equity. Furthermore, the firm’s advertising and CSR reputation aggravate this negative association. These results are consistent with the notion that customers view a large environmental footprint as a violation of the firm’s brand promise. Follow-up analysis indicates that the association between a firm’s environmental footprint and its brand equity is driven by resource use, rather than pollution, suggesting that customers interpret a firm’s high resource use as a promissory violation. Additionally, the firm’s environmental footprint is negatively associated with its brand stature but not its strength. The findings contribute to the environmental ethics literature and the brand-as-promise framework.