Research-Thesis: The impact of Sustainability innovation initiatives on brand image: The mediating effect of Brand credibility

Abstract

Sustainability has evolved into a balanced approach that integrates environmental, economic, and social priorities, often referred to as the “three pillars” of sustainability. For businesses, this requires going beyond financial performance to also consider social and environmental impacts, in line with the principle of meeting present needs without compromising those of future generations. In this context, brand credibility plays a central role, as it determines how stakeholders interpret and evaluate a brand’s sustainability efforts, ultimately influencing reputation and brand image. This thesis investigates the relationships between sustainability innovation initiatives, brand credibility, and brand image, using Signaling Theory as the main theoretical framework. A research model was developed to test five hypotheses, focusing on the direct effects of sustainability innovation initiatives on brand credibility and brand image, as well as the mediating role of brand credibility in explaining how sustainability initiatives translate into brand image. To test the model, Nike was selected as the case brand due to its high-profile sustainability programs. A quantitative research design was applied, with data collected through an online survey of 199 respondents. The analysis examined both the direct and indirect relationships between the constructions. The findings show that sustainability innovation initiatives significantly strengthen both brand credibility and brand image. In addition, brand credibility has a strong positive effect on brand image and was found to mediate the relationship between sustainability innovation initiatives and brand image. This indicates that sustainability initiatives improve brand image not only directly, but also by increasing how trustworthy and reliable the brand is perceived to be. Overall, the study highlights sustainability as a critical driver of brand image and long-term business success. A strong brand image built on credible and authentic sustainability initiatives can enhance stakeholder trust, improve market relevance, and provide a lasting competitive advantage in an increasingly value-driven marketplace.