Leveraging Product Labels for Sustainable Consumption: Circular Economy, Corporate Social Responsibility, and ESG Messaging on Consumers' Purchase Decisions

Abstract

While companies engage in different socio-environmental actions, such as Circular Economy (CE), Corporate Social Responsibility (CSR), or Environmental, Social, and Governance (ESG) initiatives, it is still unclear which socio-environmental action or the combination thereof will be more effective in prompting consumer purchases. To address this gap, this study builds on Signaling Theory. It investigates whether messages using CE, CSR, or ESG concepts influence consumers' purchase decisions by manipulating message specificity levels (specific vs. generic content). An experiment with young Brazilian and Australian consumers was carried out using the conjoint analysis approach, and a low-involvement cosmetic product (shampoo) was regularly purchased. The results indicate that consumers prefer specific messages containing the three concepts (CE, CSR, and ESG). Additionally, we controlled for socio-demographic variables, such as sustainability knowledge, sustainability proneness, belief in labels and companies, gender, age, and employment status, alongside the influence of CE, CSR, or ESG messages. Theoretical contributions and practical guidelines for managers are provided.