Evaluating the Influence of Ethical and Sustainable Brand Narratives on Brand Loyalty

Sustainable and ethical branding has become a major component of international corporate strategy in the twenty-first century. What was before seen as a specialized or incidental issue has now evolved into a basic expectation among stakeholders and customers alike. More and more, brands are integrating principles like social justice, environmental responsibility, and ethical governance into their identities and marketing storylines. Sustainability's strategic advantages, such as long-term profitability and competitive advantage, are driving this change in addition to the moral need to behave ethically (Fernando et al., 2022), (Thorisdottir & Johannsdottir, 2020). Today's consumers are increasingly socially conscious, educated, and driven to support companies that share their beliefs. Because of this, there has been a discernible movement toward conscious consumerism, when consumers consider a brand's social and environmental effect in addition to price and quality when making choices about what to buy. Transparency, moral behaviour, and authenticity in branding are thus now essential for gaining the confidence of customers. In response, businesses from a variety of sectors are implementing sustainable practices including supporting fair labour, cutting carbon emissions, sourcing ethically, and taking part in significant corporate social responsibility (CSR) programs. Meanwhile, environmental, social, and governance (ESG) requirements are becoming more important to investors and regulators, which emphasizes how important sustainable branding is in today's corporate climate (Jinga, 2022).

Building strong the customer relationships and loyalty is becoming increasingly important for businesses in today's rapidly evolving marketing environment (Islam et al., 2020). Because it may give companies long-term competitive advantages in dynamic marketplaces, cultivating enduring brand loyalty has attracted a lot of attention (Kaur et al., 2020). Brand loyalty has long been linked to corporate marketing campaigns and customer interaction strategies (Utami, 2015). Brand loyalty is frequently indicated by consumer perceptions of a company's products and the strength of customer-brand relationships (Tanveer, 2021).

In addition to functional benefits, there has been growing consensus in recent years that brand messaging should also address broader social and environmental issues. This shift is a reflection of the trend toward ethical branding, where companies align their values with those of their socially conscious clientele. Strategies that support consumers' shared ethical and sustainable values, which tend to promote greater emotional and cognitive engagement, frequently increase brand loyalty. Maintaining customers' trust and brand loyalty has become both a strategic necessity and a significant challenge as modern cultures put more and more pressure on companies to interact with stakeholders in an ethical and responsible manner.

Ethical marketing strategies, a key component of ethical branding, have been researched as tools for gaining a competitive edge in a number of business domains (Papadimitri et al., 2021). These strategies influence how customers interact with products and services on a daily basis, which influences how they behave. Regardless of how knowledgeable consumers are about their purchasing power, ethical marketing practices have a direct impact on their perceptions of corporate responsibility, brand legitimacy, and product fairness. It is widely acknowledged by managers and marketers that marketing ethics—which encompass elements such as open pricing, honest promotion, and product safety—are critical to a company's long-term survival (Lee & Jin, 2019). As a result, a company's ethical or immoral behaviour has a direct impact on its stakeholder trust, brand image, and long-term market viability (Vallaster et al., 2019),(Rekker et al., 2014).

Despite the growing importance of ethical marketing, there hasn't been much empirical research done on the expanded marketing mix (product, price, venue, promotion, people, tangible proof, and packaging) (Tanveer et al., 2020),(Cuomo et al., 2019),(Alwi et al., 2017). Trust is a key mediating factor in these interactions because customers are more likely to remain loyal to businesses they perceive to be open, honest, and socially conscious. As a result, ethical marketing strategies are crucial for enhancing consumer-business relationships, product evaluations, and trust-based brand loyalty (Haryanto et al., 2016). However, only a few studies have fully examined the behavioural and attitudinal effects of incorporating ethical considerations into all facets of the marketing mix. Also, consumer ethical sensitivity, or how aware and responsive people are to ethical issues when they shop, is an important factor that affects the link between ethical branding and brand loyalty. People who are very aware of ethics are more likely to accept and respond positively to brand stories that focus on social responsibility, fairness, and sustainability. On the other hand, people with less ethical awareness may not see or value these kinds of efforts as much, which makes ethical messages less effective. This difference shows how important it is to know how people's moral beliefs differ, since these differences affect how people respond to brand messages and how much trust and loyalty they build.

Despite the fact that sustainable branding and ethical marketing have been the subject of several studies, little study has been done on how the combined messaging of sustainable and ethical brands affect brand loyalty. Specifically, less is known about the role that consumer trust plays in this connection and how consumer ethical awareness may either increase or decrease the effect of these brand messages. By investigating the relationship between ethical and sustainable brand narratives and brand loyalty, this research seeks to close that gap. It focuses on the function of trust as a mediator and ethical sensitivity as a moderator. Our study offers a more comprehensive understanding of how businesses may create enduring, devoted connections with clients in the competitive and socially conscious market of today by examining all of these aspects together.

Impact of Ethical Brand Narratives on Brand Loyalty

Ethical marketing is based on principles that advocate for fairness, honesty, and social responsibility in every marketing practice, including product representation, pricing, distribution, promotion, and even packaging. As noted in the literature, ethical marketing is the practice of applying moral standards and codes of conduct in business transactions with stakeholders, such as customers, employees, and society (Tanveer & Hassan, 2020),(Resnik, 2015). Ethical brand stories—those that tell of a company's dedication to fairness, social justice, openness, and moral principle—are important for their ability to influence consumer attitudes and behaviors. In the modern marketplace, where consumers are more attuned to social concerns and look to hold companies accountable, these stories serve to foster credibility and trust. Studies indicate that consumers are more likely to prefer brands that they share with on ethical ground and are even willing to pay more for a product from socially conscious companies (Sun & Yoon, 2022). These perceptions tend to extend into more profound emotional connections, favorable evaluations, and ultimately, more loyalty towards the brand. Ethical storytelling also shapes consumers' judgments on a brand's integrity in terms of the extended marketing mix, such as equitable pricing, proper product information, ethical promotions, and socially responsible supply chains (Holloway, 2024). Hence, ethical brand stories are suggested to not just build brand image but also consolidate long-term customer loyalty. Based on these arguments, the following hypothesis is developed:

Ø H1: Ethical brand narratives have a significant positive impact on brand loyalty.

Sustainable Brand Narratives and Their Impact on Brand Loyalty

Sustainable brand stories convey a firm's dedication to tackling environmental, social, and economic issues through accountable and transparent business activities. Sustainable business strategies try to minimize environmental damage, facilitate social justice, and maximize long-term economic sustainability by encouraging efficient use of resources, ethical working conditions, and growth that is inclusive (Adewumi et al., 2024); (Ochuba et al., 2024). These sustainability initiatives—varied as they are from carbon reduction and the adoption of renewable energy to fair trade purchasing and community outreach—have become integral parts of a brand's DNA in today's socially and ecologically aware market. When businesses are able to communicate these values through their brand stories, they align with the aspirations of contemporary consumers who increasingly integrate sustainability into their buying choices. Existing research implies that messaging for sustainability can build corporate reputation, establish trust, and attract consumers concerned with ethical consumption (Obinna & Kess-Momoh, 2024); (Tula et al., 2024). While the power of sustainability narratives on loyalty is not necessarily as powerful as ethical narratives based on fairness or justice, they are still positively influencing customer preference and repeat purchase behavior. Thus, in line with these observations, the following hypothesis is put forward:

Ø H2: Sustainable brand narratives have a significant positive impact on brand loyalty.

Mediating Role of Consumer Trust Between Ethical Brand Narratives and Brand Loyalty

The linkage between ethical branding and brand loyalty is increasingly being conceptualized in terms of consumer trust. Ethical companies, by maintaining alignment with moral values and socially responsible conduct, have greater chances of building strong emotional connections with the consumers, resulting in repeat buying and long-term loyalty. Research has established that customers become more attached to businesses they see as morally accountable, and 66% of international consumers are prepared to pay extra for goods from brands dedicated to social and environmental issues (White et al., 2017), (Khandai et al., 2023). Moral brand stories—those that convey justice, openness, and social responsibility—act as significant indicators for establishing consumer trust. This trust, in turn, acts as a facilitator, enhancing the relationship between moral values and consumer loyalty (Aldulaimi et al., 2025). Ethical business practices such as honest trade, ethical marketing, and CSR initiatives create an image of reliability that strikes a chord with consumers (MacDonald, 2013). Unethical actions, on the other hand, can deconstruct trust and loyalty, as experienced in high-profile corporate cases such as Volkswagen's emissions scandal (Smith, 2024). In addition, trust has been found to be an essential consumer-brand relationship factor whereby ongoing ethical behavior has a positive effect on purchasing decisions (Andersch et al., 2019). Based on this proof, consumer trust will most likely partially mediate the interaction between ethical brand stories and brand loyalty. Thus, the following hypothesis is proposed:

Ø H3: Consumer trust mediates the relationship between ethical brand narratives and brand loyalty.

Moderating Role of Consumer Ethical Sensitivity in the Ethical Branding–Loyalty Relationship

Ethically based marketing, rooted in moral values and socially conscious action, has an important impact on the attitudes and decisions of consumers. Ethical marketing involves fairness in products, pricing transparency, ethical promotion, and appropriate sourcing and packaging methods—making up a fundamental component of the extended marketing mix (Tanveer et al., 2021). Yet, how consumers react to ethical brand stories largely rests on their ethical sensitivity—the degree to which they identify and are driven by ethical factors in consumption. Ethical sensitivity is influenced by one's values, social awareness, and concern for justice, fairness, and sustainability. Highly ethically sensitive consumers are likely to be triggered by brand messages focusing on social responsibility, humane labor practices, or ecological protection and thus intensifying their affective bond and allegiance towards such brands (Ahmad et al., 2023),(Alwi et al., 2017).

Brand loyalty itself has been well understood as a sophisticated and multifaceted construct encompassing not only repeat buying but also psychological commitment, affective bond, and refusal to switch (Khan et al., 2020),(Islam et al., 2019). Trust and individual identification with brand values are understood to increase customer loyalty, particularly in markets driven by ethics. With identification with the brand's ethical position, consumer loyalty takes on a deeper level, creating a sustained competitive lead for companies (Islam & Zaheer, 2016),(Islam & Rahman, 2016). The loyalty is not equal among all consumers, though. Individual differences in ethical sensitivity can moderate the success of ethical brand communication. Low ethical sensitivity consumers may not find ethical stories significant or impactful, which would weaken the effect of such messages on loyalty. Understanding and reaching out to ethically sensitive consumers, therefore, becomes important for brand managers who want to create significant, value-driven connections. On this basis, the following hypothesis is formulated:

Ø H4: Consumer ethical sensitivity moderates the relationship between ethical brand narratives and brand loyalty, such that the relationship is stronger for consumers with higher ethical sensitivity.

Research gap

In spite of increased concern for ethical and sustainable branding, past research has a number of limitations that limit a full understanding of how such narratives affect consumer behavior. The majority of past studies have examined either ethical or sustainable branding as distinct constructs, without considering the combined or comparative effects of both. Also, previous research has a tendency to investigate the immediate effect of such stories on measures such as purchase intention or brand image, without paying sufficient attention to higher-order relational constructs like trust. In addition, most current models conceptualize consumers as a homogeneous population, without any attempt to explore the possibility that differences among individuals, especially in ethical sensitivity, can influence how consumers are involved in and react to ethical branding efforts.

To bridge these gaps, the current research proposes an integrated model that explores ethical and sustainable brand stories as simultaneous predictors of brand loyalty. The research extends direct relationships by including consumer trust as a mediator and consumer ethical sensitivity as a moderator. This process provides a more accurate representation of how value-based branding impacts customer loyalty by considering both psychological processes and individual differences. In so doing, the research offers more in-depth understandings of why and how ethical and sustainable messaging influences consumer-brand relationships and provides useful implications for marketers interested in establishing trust and long-term loyalty among ethically conscious consumer groups.

Research Design

This study used a quantitative, cross-sectional research design to look at how ethical and sustainable brand stories affect brand loyalty. The design also looked into how consumer trust can act as a mediator and how consumer ethical sensitivity can act as a moderator. We used a structured questionnaire to gather primary data, which made it possible to use statistics to look at how the key constructs were related to each other.

Objectives

1.   To examine the impact of ethical brand narratives on brand loyalty.

2.   To evaluate the influence of sustainable brand narratives on brand loyalty.

3.   To investigate the mediating role of consumer trust in the relationship between ethical brand narratives and brand loyalty.

4.   To analyse the moderating effect of consumer ethical sensitivity on the relationship between ethical brand narratives and brand loyalty.

Sample and Sampling Technique

The target people included customers exposed to businesses that engage in ethical and sustainable marketing practices. The survey gathered a total of 384 valid replies. The sample technique used was non-probability convenience sampling, suitable for exploratory research on consumer behaviour. Participants were chosen based on their readiness and capacity to provide knowledgeable insights on the topic.

Instrumentation and Measures

Data were collected using a structured questionnaire comprising validated measurement items adapted from previous studies. The constructs assessed in the study included:

• Ethical Brand Narratives
• Sustainable Brand Narratives
• Consumer Trust
• Consumer Ethical Sensitivity
• Brand Loyalty

Every item was measured on a 5-point Likert scale, with 1 denoting "strongly disagree" and 5 denoting "strongly agree." Before it was fully implemented, a small sample of respondents was asked to pre-test the questionnaire to make sure it was clear and pertinent.

Validity and Reliability Assessment

All survey questions were assessed for construct validity and reliability in order to guarantee measurement accuracy. To verify internal consistency, Cronbach's Alpha and Composite Reliability (CR) were used to evaluate reliability. Using Average Variance Extracted (AVE), convergent validity was examined to make sure that each item accurately reflected its corresponding concept. All measurement scales were found to meet the suggested criteria, confirming the instrument's appropriateness for further study.

Data Analysis Techniques

The data collected were analyzed through Structural Equation Modeling (SEM) to examine hypothesized relationships between the constructs.

• Direct effect analysis was done to investigate the association between ethical and sustainable brand stories and brand loyalty.
• Mediation analysis was done to evaluate the function of consumer trust in mediating the relationship between ethical brand stories and brand loyalty.
• Moderation analysis entailed examining interaction effects to assess the role played by consumer ethical sensitivity on the strength of the ethical brand–loyalty link.

An appropriate statistical program was used for all analyses to provide correct model estimation and hypothesis testing.

Validity and Reliability:

Table 1 Internal Consistency and Convergent Validity

The internal consistency and convergent validity of the constructs were evaluated by Cronbach’s Alpha, Average Variance Extracted (AVE), and Composite Reliability (CR). Table 1 indicates that all constructs exhibited adequate internal consistency, with Cronbach’s Alpha values beyond the acceptable limit of 0.70, ranging from 0.841 for Consumer Trust to 0.857 for Ethical Brand Narratives. All constructs had AVE values beyond the minimal threshold of 0.50, indicating sufficient convergent validity, with Sustainable Brand Narratives recording the greatest AVE at 0.676 and Ethical Brand Narratives the lowest at 0.6322. The Composite Reliability values adhered to the suggested threshold of 0.70, ranging from 0.8070 to 0.8270, therefore affirming that the constructs are trustworthy and relevant indicators for the research. The findings confirm the reliability of the measuring approach used to assess the connections among ethical and sustainable brand narratives, consumer trust, ethical sensitivity, and brand loyalty.

Table 2 Mean and standard deviation

Hypothesis Implementation:

H1: Ethical brand narratives have a significant positive impact on brand loyalty.

The results show a robust and statistically significant beneficial impact of ethical brand narratives on brand loyalty, with a standardised estimate of 0.802 and a p-value classified as highly significant (***).  This suggests that customers who see brands as morally motivated are far more inclined to cultivate loyalty to such businesses.  The elevated standardised estimate underscores the essential function of ethical communication and transparency in fostering enduring customer loyalty and strengthening positive brand-consumer interactions.

H2: Sustainable brand narratives have a significant positive impact on brand loyalty.

The study shows that sustainable brand narratives have a statistically significant, albeit lesser, positive influence on brand loyalty, shown by a standardised estimate of 0.120 and a p-value of 0.038. Although the impact magnitude is diminished relative to ethical narratives, the significance indicates that sustainability messaging still favourably influences customer loyalty. This suggests that while customers appreciate sustainability initiatives, these efforts may serve as a supplementary influence rather than a principal motivator of loyalty in comparison to ethical issues.

H3: Consumer trust mediates the relationship between ethical brand narratives and brand loyalty.

The mediation research shows that consumer trust acts as a crucial mediator between ethical brand narratives and brand loyalty. Ethical brand narratives are substantial predictors of customer trust (β = 0.582, ***), which subsequently has a large effect on brand loyalty (β = 0.706, ***). The direct impact of ethical storylines on brand loyalty is substantial (β = 0.151, ***), indicating partial mediation. This suggests that ethical tales foster trust, which then leads to increased brand loyalty, highlighting the essential intermediate function of trust in ethical marketing tactics.

H4: Consumer ethical sensitivity moderates the relationship between ethical brand narratives and brand loyalty, such that the relationship is stronger for consumers with higher ethical sensitivity.

The results confirm the moderating influence of consumer ethical awareness on the correlation between ethical brand narratives and brand loyalty. The standardised effect of the interaction term is 0.102, with a statistically significant p-value of 0.008, suggesting that the impact of ethical brand narratives on brand loyalty intensifies as consumers' ethical sensitivity rises. The substantial direct impacts of ethical brand narratives (β = 0.499, ***) and consumer ethical sensitivity (β = 0.413, ***) further underscore their respective contributions. The results indicate that consumers with heightened ethical sensitivity are more responsive to ethical messaging from companies, resulting in increased brand loyalty when these narratives are viewed as genuine and consistent. This underscores the need for marketers to customise their ethical branding strategies to more profoundly connect with ethically aware customers, since their loyalty is significantly swayed by ethical factors.

The study's results show the crucial importance of ethical and sustainable brand narratives in influencing brand loyalty, especially via the mediating impact of consumer trust and the moderating influence of consumer ethical sensitivity. Ethical brand narratives had a substantial and statistically significant direct influence on brand loyalty, suggesting that consumers are inclined to reciprocate enduring commitment to firms seen as ethically principled. While sustainable brand narratives significantly impacted brand loyalty, the effect was quite low, indicating that while environmental responsibility is valued, it may not be the primary determinant of loyalty. customer trust significantly mediates the association between ethical narratives and brand loyalty, indicating that trust serves as a crucial mechanism via which ethical messaging fosters customer commitment. Moreover, consumer ethical sensitivity modulated the association between ethical brand narratives and loyalty, with ethically conscious customers exhibiting more pronounced loyalty reactions to these narratives. These findings indicate that firms seeking to cultivate loyalty must not only engage in ethical communication but also establish trust and customise their messaging for ethically sensitive consumer groups. The established notions and strong statistical correlations provide a persuasive argument for incorporating ethics and sustainability into fundamental brand narratives to improve consumer-brand interactions.

In conclusion, the research presents persuasive evidence that ethical and sustainable brand narratives significantly improve brand loyalty, with ethical narratives having a more significant impact. The findings indicate that ethical branding directly cultivates client loyalty and indirectly boosts it by augmenting consumer trust, which serves as a partial mediator. Moreover, the function of customer ethical sensitivity as a moderator indicates that ethically conscious consumers are more significantly impacted by ethical brand communication, leading to increased loyalty. Sustainable narratives, although beneficial for loyalty, have a very minor influence relative to ethical messages. The results highlight the strategic significance of incorporating ethical ideals and trust-building processes into brand narratives to foster and sustain long-term customer loyalty, especially among ethically aware consumers.