Implicit or Explicit? Understanding Consumer Responses to ESG-Related Claims and ESG Disclosure in the Consumer-Packaged Goods Industry: An Emerging Economy Perspective

Abstract

Grounded in signaling and legitimacy theories, this study explores consumers' responses to implicit and explicit ESG-related claims on product labels as well as the moderating effect of ESG disclosure in China's consumer-packaged goods industry. In a two-by-two between-subject experimental design with 329 Chinese consumers across diverse regions, the study reveals that explicit ESG claims generate stronger brand attachment and purchase outcomes compared to implicit claims. Moreover, the study finds support for the moderating role of ESG disclosure such that it amplifies both implicit and explicit ESG-related claims significantly. This study extends both signaling theory and legitimacy theory by explaining the mechanisms through which ESG-related claims and ESG disclosure interact to influence consumer decision-making in an emerging market context, thus filling critical gaps in existing literature. Practically, the study provides actionable strategies for organizations to optimize ESG communication by leveraging both explicit and implicit claims as well as ESG disclosure to drive favorable consumer outcomes.