The Impact of Sustainability Practices on Brand Value: A Study of Sri Lanka’s FMCG Industry

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.