Why buying socially responsible brands may backfire on corporate reputation

As consumers grow increasingly concerned about climate change, sustainability, and social justice, corporate social responsibility (CSR) has become an essential part of brand strategy. Many major corporations, such as L’Oréal, Unilever, and P&G, seek to strengthen their social responsibility profiles not only through internal initiatives but also by adding socially responsible brands to their brand portfolios.

In the article “Build or Buy Corporate Social Responsibility? Socially Responsible Brand Acquisitions and Firm CSR Perceptions,” published in the Journal of Business Research, John Molson researchers Onur Bodur and Bianca Grohmann, both full professors in the Department of Marketing, with lead author Argiro Kliamenakis of the Telfer School of Management at the University of Ottawa, found that while developing a socially responsible brand from within generally enhances a company’s reputation, acquiring one can sometimes weaken it - especially when the acquired brand carries strong symbolic meaning for consumers.

When an acquisition dilutes authenticity

Across seven studies, the researchers compared consumer reactions to two expansion strategies: developing a new socially responsible brand versus acquiring an existing one. Across contexts ranging from apparel to personal care, results consistently showed that brand acquisitions lead to lower perceptions of a firm’s CSR when the brand has high symbolic value - that is, when consumers use the brand to express their personal identity and values.

Consumers tend to see such acquisitions as disruptive, fearing that a once-authentic brand may lose its purpose or independence under corporate ownership. By contrast, when a company develops a socially responsible brand itself, consumers view the effort as a more costly and credible signal of genuine commitment.

Credibility is the missing link

The research identifies brand credibility - a brand’s perceived ability to deliver on its social-responsibility promise - as the key mechanism behind these perceptions. When an acquired brand’s credibility suffers, so does the parent firm’s CSR image.

Because developing a socially responsible brand requires greater investment and risk, consumers view it as a more credible signal of a firm’s willingness to invest in social responsibility compared to a simple acquisition.

How firms can protect CSR credibility

The authors also tested practical ways to mitigate these adverse effects. One effective approach is to preserve the acquired brand’s autonomy through a house-of-brands strategy rather than blending it into the parent company’s identity. This structure allows the brand to maintain its own logo, name, and culture - helping consumers believe its values remain intact.

Another strategy is transparent, product-based communication after the acquisition. Emphasizing continuity in ethical sourcing, manufacturing processes, or environmental standards reassures consumers that the brand’s mission remains authentic. By contrast, emphasizing leadership continuity or corporate control proved less effective for highly symbolic brands.

Implications for business leaders

For executives, the message is clear: while acquiring a socially responsible brand may seem an efficient way to signal commitment to sustainability, authenticity cannot be outsourced. Consumers recognize when responsibility is integrated into a firm’s core values versus when it is appended through acquisition.

In categories where brands serve as identity symbols, such as fashion, beauty, or lifestyle, developing a socially responsible brand internally or maintaining an acquired brand’s independence is likely to yield more substantial long-term reputational benefits.

The authors conclude that although brand acquisitions offer strategic advantages, they can weaken consumers’ perceptions of a firm’s social responsibility if they compromise the authenticity and credibility of the acquired brand. For companies seeking to build lasting trust, genuine commitment remains the most persuasive signal of all.