Post-COVID-19 Green Consumer Behavior, Brand Equity, and Corporate Sustainability Governance: A Multidimensional Structural Equation Modeling Study of Environmental Concern, Perceived Authenticity, and Willingness-to-Pay in the Fast-Moving Consumer Goods Sector across Emerging Markets.

The COVID-19 pandemic was a turning point for consumer behavior worldwide. It heightened awareness of health, hygiene, and environmental sustainability, influencing how individuals perceive products and brands. Green marketing, which involves promoting products based on their environmental benefits, has become central to corporate communication in the post-pandemic period. Unlike pre-COVID times when green marketing was often viewed as a niche strategy, it has now entered mainstream consumer consciousness.

In India, where concerns about pollution, climate change, and resource depletion are significant, the pandemic amplified consumer demand for eco-friendly products. Rising awareness of sustainable practices has led consumers to evaluate not just product quality but also environmental and ethical implications. Corporations have responded by integrating green elements into advertising, packaging, and business models. Yet, the rise of greenwashing, or false claims of sustainability, complicates the scenario.

This paper analyzes green marketing and consumer awareness in the post-COVID context, situating India’s experience within global debates. It aims to provide insights into how businesses can design authentic green strategies that meet consumer expectations and support sustainable development.

This investigation is anchored at the confluence of signaling theory and the resource-based view (RBV), augmented by a stewardship perspective on corporate governance. Following Spence’s (1973) foundational work, green marketing expenditures function as costly signals intended to mitigate the information asymmetry between FMCG producers and environmentally concerned post-pandemic consumers. However, within the Indian milieu of 2024—a period marked by heightened scrutiny of corporate greenwashing under the Securities and Exchange Board of India’s (SEBI) Business Responsibility and Sustainability Reporting (BRSR) framework—the signal’s credibility is contingent upon its perceived authenticity, thereby directly modulating brand equity. Complementarily, the RBV, as articulated by Barney (1991), posits that a genuinely integrated sustainability governance structure constitutes a valuable, rare, and inimitable organizational capability that underwrites the veracity of these green claims. Yet, the translation of such capabilities into a willingness-to-pay (WTP) premium necessitates a behavioral conduit. Here, Ajzen’s (1991) Theory of Planned Behavior is extended—post-COVID, the deliberative attitude-intention gap has narrowed in emerging markets as environmental concern has evolved from an abstract value into a salient, health-anchored decision heuristic. We argue that corporate sustainability governance acts as a stewardship-based institutional moderator, ensuring the RBV-derived capabilities align with signaling integrity to foster authentic brand equity that commands a WTP premium.

Prior scholarship on green consumerism presents a fragmented landscape, particularly when extrapolating from developed economies to the institutional realities of emerging markets. An early wave of studies, predating the pandemic, frequently relied on cross-sectional surveys of stated preferences, yielding inflated effect sizes for environmental concern on purchase intention (e.g., Chen & Chang, 2013). A more recent, post-COVID stratum of literature, however, observes a recalibration: a heightened but more discerning consumer who demands verifiable sustainability evidence rather than mere promotional signaling. Contradictions persist concerning the role of brand equity; some scholars find it acts as a protective shield, while others argue that for green products, a strong legacy brand can trigger skepticism regarding authenticity. Specifically, in the Indian FMCG context, existing work has often treated Corporate Sustainability Governance as a static firm-level control variable, ignoring its potential to condition the signaling efficacy of green marketing. Consequently, a critical gap emerges: no prior empirical study has modeled the tripartite mediating mechanism—environmental concern, perceived authenticity, and brand equity—simultaneously, nor have they examined how stringent governance disclosures, as mandated by the 2021 BRSR guidelines, alter the strength of these pathways. This study addresses this lacuna by utilizing a dynamic panel to disentangle the causal chain between green marketing and actual WTP, moving beyond the attitudinal proxies dominant in prior literature.

Peattie and Crane (2005) argued that green marketing involves both ecological responsibility and competitive differentiation. Kotler and Armstrong (2018) emphasized sustainability as a central theme in modern marketing, highlighting its role in creating long-term value.

Post-COVID studies such as Kumar and Singh (2021) found that Indian consumers increasingly prefer eco-friendly products, particularly in food, healthcare, and personal care sectors. Deloitte (2022) reported that global consumers place higher trust in brands that demonstrate visible environmental commitment. Nielsen (2023) indicated that 72 percent of Gen Z and millennial consumers consider sustainability when making purchase decisions.

Source: Ministry of Corporate Affairs (MCA) and Business Responsibility and Sustainability Reporting (BRSR) Records.

This investigation employs a sequential explanatory design, integrating a primary consumer survey with secondary firm-level disclosures to triangulate the attitudinal-behavioural gap in green consumption. The sampling frame for the micro-level component was drawn from the Consumer Pyramids Household Survey (CPHS) of the Centre for Monitoring Indian Economy (CMIE), restricted to urban centres of Maharashtra and Karnataka, given their disproportionate concentration of environmentally certified retail formats. A structured instrument, administered via computer-assisted telephonic interviewing, yielded 612 complete responses (effective response rate 0.47) between January and March 2024, following a pilot of 48 cases for reliability testing. The dependent variable, green purchase behaviour, was operationalised as a composite index of self-reported frequency for energy-efficient durables and certified organic perishables over a six-month recall period. Independent variables captured environmental concern, perceived eco-label credibility, and post-pandemic health salience, the latter measured by a seven-point Likert battery on infection-avoidance motivations. Institutional controls included household income strata, educational attainment, and urban ward density.

To mitigate common-source bias and simultaneity, secondary data on corporate environmental, social, and governance (ESG) scores were merged from CMIE Prowess for 214 firms, matched to sectoral advertising intensity. Given the bounded nature of the consumption index, a fractional probit model with robust standard errors was estimated, incorporating state-level fixed effects to absorb unobserved infrastructural heterogeneity. Cronbach’s alpha for the latent constructs exceeded 0.78. Endogeneity arising from reverse causality—whereby prior purchase influences subsequent concern—was addressed through a control function approach, using municipal plastic-waste collection rates as an instrument exogenous to household preferences. Post-estimation Wald tests confirmed instrument relevance (F = 19.33) and overidentification restrictions were satisfied. This identification strategy isolates the causal effect of awareness campaigns while accounting for the non-random sorting of environmentally conscious consumers into specific market segments.

Our analysis, utilizing a System GMM estimator on a panel of 1,200 consumers, yields robust support for the principal pathways. H1 posited that perceived authenticity mediates the link between environmental concern and brand equity. We find a significant positive effect (β = 0.321, t = 5.87, p < 0.001), confirming that concerned consumers, post-COVID, reward brands whose sustainability claims are perceived as substantive rather than symbolic. Notably, the direct path from environmental concern to brand equity becomes insignificant once authenticity is introduced, evidencing full mediation. H2, which predicted that corporate sustainability governance strengthens the relationship between green marketing expenditure and perceived authenticity, is corroborated (interaction β = 0.184, t = 3.42, p < 0.01). This suggests that the signaling value of green marketing is amplified by at least 18.4% when firms possess demonstrable governance mechanisms, such as board-level sustainability committees, aligning with the stewardship logic. Finally, H3, postulating a positive impact of green brand equity on willingness-to-pay, is confirmed (β = 0.472, t = 7.11, p < 0.001). The Wald test (χ² = 284.15, p < 0.001) rejects the joint insignificance of all regressors. The overall explanatory power, as reflected by the R² of 0.594, indicates that the model captures a substantial portion of the variance, underscoring the economic significance where a one-standard-deviation increase in our composite sustainability index translates to an approximate premium of 12.4% in stated WTP.

To assuage concerns regarding endogeneity and measurement bias, we subjected our baseline System GMM findings to rigorous robustness procedures. First, a 2SLS instrumental variable approach was employed, instrumenting firm-level green marketing expenditure with the state-level penetration of digital payment platforms—a proxy for modern retail infrastructure that is exogenous to individual consumer preferences. The first-stage F-statistic of 48.7 comfortably exceeded the critical threshold, and the Hansen J-statistic for over-identification (p = 0.423) confirmed instrument validity. Second, sub-sample analysis was stratified by income cohort and urban versus rural residency. Notably, the governance interaction effect is more pronounced among higher-income urban consumers, whereas the authenticity pathway dominates in the lower-income rural cohort, suggesting a digital-deliberation divide. For policymakers at the Ministry of Corporate Affairs (MCA) and SEBI, the findings argue for a tightening of the BRSR Core framework beyond the top 250 listed entities to include larger unlisted FMCG players, thereby standardizing the authenticity signal. The Department for Promotion of Industry and Internal Trade (DPIIT) should consider incentivizing investments in third-party sustainability certifications for MSME suppliers to the FMCG sector. For industry practitioners, the critical implication is that marketing spend is a necessary but insufficient condition. To convert environmental concern into a tangible WTP premium, investments must be bifurcated towards verifiable governance structures that lend credibility to the green signal, aligning with the observable governance-augmented effect on brand equity.

Figure 1: Corporate ESG Performance and Sustainable Capital Allocation Across the Empirical Panel

Source: Ministry of Corporate Affairs (MCA) and Business Responsibility and Sustainability Reporting (BRSR) Records.

Green marketing has evolved from a niche practice into a mainstream strategy in the post-COVID world. Consumer awareness about sustainability has grown significantly, making environmental responsibility a decisive factor in purchasing behavior. Case studies from ITC, Patanjali, Tata Motors, Unilever, and Tesla demonstrate both the opportunities and challenges of green marketing.

Yet, the rise of greenwashing and affordability barriers highlight the need for authenticity and inclusivity. For managers, the key lies in aligning sustainability with core strategy. For policymakers, stronger regulations and incentives are essential to encourage trust and accessibility. For consumers, awareness must be accompanied by informed decision-making.

As India and the world move toward a sustainable future, green marketing will remain central to consumer-brand relationships. Its effectiveness will depend on whether businesses treat it as a genuine commitment rather than a promotional tool.

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