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Article

Proactive Environmental Strategy and Environmental Performance of the Manufacturing SMEs of Karachi City in Pakistan: Role of Green Mindfulness as a DCV

by
Muhammad Ibrahim
* and
Rosli Mahmood
Putra Business School, University Putra Malaysia, Serdang 43400, Malaysia
*
Author to whom correspondence should be addressed.
Sustainability 2022, 14(19), 12431; https://doi.org/10.3390/su141912431
Submission received: 22 August 2022 / Revised: 22 September 2022 / Accepted: 25 September 2022 / Published: 29 September 2022
(This article belongs to the Special Issue Sustainability in Manufacturing Operations and Supply Chain Management)
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Abstract

:
This study aims to develop a theoretical model for assessing the causal relationship between a proactive environmental strategy (PES), green mindfulness (GM), and environmental performance (EP) of small and medium-sized enterprises (SMEs). The theoretical model was established through a literature review and tested with 193 entrepreneurs and managers from manufacturing SMEs operating in Karachi, the largest city in Pakistan. The model was tested using PLS Smart with partial least square structural equation modeling. The results reveal that PES does not directly relate to EP. However, the study found a full mediation effect of GM on the relationship between PES and EP. Thus, this study is novel in its approach to using GM as a mediator in assessing the relationship between PES and EP. The study also found that the effects of PES are balanced when the SMEs incorporate GM, which further leads to the achievement of EP. Thus, the findings extend increasingly complex literature in the assessment of GM’s role in SMEs’ EP. Further, the scale and the models can be used to assess how SMEs respond to PES with mindful attention to achieve EP.

1. Introduction

There has been severe pressure on manufacturing small and medium enterprises (SMEs) by stakeholders, including regulatory reinforcement authorities, to effectively utilize natural resources and internal dynamic capabilities by taking proactive environmental decisions through mindful strategies and capabilities for improving their environmental performance. Many countries and organizations have obtained and implemented environmentally friendly green strategies and practices to enjoy a competitive advantage and improve their environmental performance [1,2].
SMEs are considered a significant pillar of the economy because of their significant contributions toward poverty reduction, economic growth, and employment generation. The SMEs in Pakistan constitute approximately 92 percent of the business establishments, share almost 40 percent of the country’s GDP, contribute approximately 26 percent to the country’s exports from the manufacturing sector, and 79 percent to industrial employment in the country [3].
Environmental management issues are now not a novel concept, and these are heavily heard and reflected in the corporate world as a big challenge [4]. Companies throughout the globe value the significance of environmental performance for a successful business and competitive strategy [5]. Air pollution is one of the worst environmental issues in the South Asian region, especially in Pakistan [6], that has resulted in the worst quality of life [7]. The reasons for the worst air quality in Pakistan are transportation emissions, solid waste burning, and particularly industrial emissions. In Pakistan, this is due to non-strict compliance with environmental regulations and policies concerning manufacturing firm practices freely allowing environmental degradation [8]. SMEs struggle in devising mindful environmental strategies because mainly their focuses are on making a profit instead of taking care of the environment [9,10,11]. Devising proactive environmental strategies with green mindfulness by SMEs, such as strict environmental regulations beyond basic compliance, high prioritization and importance of environmental issues, effective management of the environmental risk of daily operations, and overall leading the industry toward the status of environmental protection [12] can enhance their environmental performance.
The mindful attitude in devising proactive environmental strategies for manufacturing SMEs in Pakistan warrants investigation, because the combined environmental impact of the manufacturing SME sector could outweigh the overall health and biodiversity [13], stability of the global economy [14], and their environmental performance [15,16]. There is paucity and difference of opinion in the relationship between proactive environmental strategies and environmental performance. Such studies by [17,18,19] are in the favor of the positive significant relationship between proactive environmental strategies and environmental performance. However, there exists other studies that do not favor the direct relationship [20,21,22].
Hence, the main purpose of this study was to empirically explain the influence that proactive environmental strategies has on the firm’s environmental performance and how mindful attention toward environmental management can mediate the relationship between PES and EP. In this sense, this study contributes to the existing literature on PES in three ways. First, we propose a theoretical model to evaluate the impact of PES, and GM on the firm’s environmental performance. Second, this study evaluates the direct and indirect effects of PES on the firm’s EP. Third, this work analyzes this relationship from the perspective of Pakistani SMEs.
The rest of this paper is structured as follows. Section 2 describes the theoretical framework and hypotheses development. Section 3 describes the materials and methods, discussing how the data was collected and analyzed. Section 4 presents the data analysis and results. Finally, Section 5 highlights the discussion and conclusion, along with the research limitations and perspectives.

2. Theoretical Framework and Hypotheses Development

In a period of unpredictable change, the dynamic capability view (DCV) explains how a firm develops, incorporates, and reconfigures its internal and external resources [23,24]. The dynamic capability framework builds a theory to understand a firm’s performance and to sustain a competitive advantage, especially when organizations face rapidly changing environmental conditions [24]. The dynamic capability as an extension of the resource-based view (RBV) and advocates that organizations with resources that meet the criteria of VRIN; that is, valuable, rare, imitable, and non-substitutable, certainly allows them to accomplish a competitive advantage [25].
When organizations are mindful of the effective protection of their resources, they can establish stronger control over the organizational resources and culture that ultimately strengthen their strategies, which leads to a better environmental performance [26]. Furthermore, the overall environmental quality and productivity can be boosted through mindfully green procedures, strategies, and policies over a period [27].
By applying the logic of DCV in this study, we expect to attain evidence that the complementarity between proactive environmental strategies and mindfulness enables enterprises to deal with rapid environmental changes and improve their environmental performance. Past studies have witnessed the importance of a proactive environmental strategy in enhancing an organization’s overall performance and competitive edge [4,28,29,30]. But studies have argued that there is still a need for more empirically-based approaches to proactive environmental strategies [30,31,32,33,34], as no existing models are empirically sufficient [33] and explain the relationship between PES and EP within the approach of green mindfulness as a dynamic capability.
Scholars have presented a mixed point of view in the context of the commitment of SMEs toward sustainable environmental strategic goals. Most of the time SMEs due to a shortage of money, cannot publicize environmentally friendly products in the market. The adoption of a proactive environmental strategy is very useful to SMEs by enhancing a remarkable improvement in effectiveness and efficient organizational performance. Rehman, Kraus [35] highlighted that green innovation mediates the relationship between proactive environmental strategies and environmental performance. For improved environmental performance, it is extremely important to have the best operational practices related to greening the environment. For this reason, this environmental philosophy should be integrated into the operations and production functions of a manufacturing unit.
Several scholars have found a positive relationship between multiple constructs of proactive environmental strategies on the environmental performance of Pakistan’s manufacturing SME sectors [8,17,19,36,37]. For instance, San Ong, Magsi [17] reported that an effective formal and informal environmental management control system in the manufacturing industry of Pakistan facilitates a better environmental performance. Suleman, Bokhari [19] studied ISO 14001 certified firms from the surgical instrument industry of Pakistan and found that corporate environmental strategies mediated the relationship between environmental performance and firm performance, and further explored that the corporate environmental strategies significantly influenced firm performance at the firm level.
The integration of environmental strategies into the organizational culture is an important phenomenon in the industries of Pakistan. The involvement of top management in the coordinated activities and recording of unorganized decisions into better environmental ideas supports the organizational culture toward a better environmental performance. The study of Shah and Soomro [20] on the predictive power of proactive environmental strategies on manufacturing firms of Pakistan discovered that there was no direct link between proactive environmental strategies and environmental performance, but the internal green integration significantly improved.
The contradictory findings of empirical research studies on environmental strategies and environmental performance showed an uncertain behavior, and the relationship still needs to be explored further to highlight insights into how organizations may benefit and realize a better environmental performance by proactively setting better environmental strategies to be competitive. Therefore, based on the literature reviewed on proactive environmental strategies and environmental performance we propose the following hypothesis:
Hypothesis 1 (H1).
There is a significant positive relationship between Proactive Environmental Strategies and Environmental Performance.
Mindfulness is defined as “the way people or organizations reflect, collect information, perceived the world around them, and are thus motivated to change their perspective under the current circumstances to achieve the desired outcome” [26]. Boyatzis [38] perceived the perspective of mindfulness as an important component of resonant leadership, and stated that mindfulness is the capacity to be fully aware of what is going on around us (paying full attention to people, the environment, and events) and inside us (fully aware about the self, body, mind, heart, and spiritual changes).
Green mindfulness implies a state of mindfulness where people or organizations adjust their behavior appropriately to become environmentally informed about their impacts and the sources creating these impacts. Green creativity and innovativeness have become widespread as environmentalism has become more common in the market. Chen, Chang [39] defined green mindfulness as “a state of conscious awareness in which individuals are implicitly aware of the context and content of environmental information and knowledge”.
The literature about mindfulness in environmental sustainability science is still novel and emerging [40], specifically, studies that directly link green mindfulness with proactive environmental strategies and environmental performance are scarce. Therefore, this study will contribute to filling this gap. A mindfulness-based organization with specific strategic goals and policies relating to environmental betterment transforms the organization into a greener company along with a differentiated competitive advantage.
In mindful organizations people talk to each other, comfortably share, trust in other people, delegate responsibility with a sense of relief, see the beauty in others and consider the environment first [41]. Umar and Chunwe [42] emphasized that green mindfulness helps in translating environmental strategies into environmental performance through quality productivity in energy consumption, water utilization, and waste reduction.
Thus, mindfulness enables organizations to achieve a stronger environmental performance, even if the organization is highly risk averse [43,44]. Therefore, an organization is likely to have a greater environmental performance when its mindfulness increases, even when the organization copes well with external pressures. Similarly, when firms have strong intrinsic values and have mindful strategic capabilities for the environment, they are more likely to embrace sound environmental protection practices that improve their safety and environmental performance.
Environmentally friendly policies and systems-oriented organizations enjoy more environmental productivity through mindful dynamism. A visionary and focused strategic pro-environmental behavior is important in following mindfulness pursuits. If an organization lacks a shared visionary environmental strategy, it has no sense of direction and/or purpose for environmental safety and mindfulness [45].
Based on the above discussion, it can be deduced that mindfulness has a significant role in the relationship between proactive environmental strategies and environmental performance and needs more clarification, specifically in the context of Pakistani SMEs. Therefore, the following hypotheses are proposed for further examination.
Hypothesis 2 (H2).
There is a significant positive relationship between Proactive Environmental Strategies and Green Mindfulness.
Hypothesis 3 (H3).
There is a significant positive relationship between Green Mindfulness and Environmental performance.
Hypothesis 4 (H4).
Green Mindfulness positively mediates the relationship between Proactive Environmental Strategies and Environmental Performance.
The proposed conceptual model for this research is shown in Figure 1.

3. Material and Methods

3.1. Data Collection

The data was collected using an online questionnaire through a survey of 138 randomly chosen small- and medium-sized manufacturing companies. The research population for this study was all manufacturing SMEs operating in Karachi, the capital of the province of Sindh, and the largest industrial city in Pakistan. Karachi is situated along the Arabian Sea and is the largest business hub of Pakistan [46], and more than 40% of total Pakistani SMEs are operating in Karachi [47]. The manufacturing SME sector uses the most natural resources and is a major contributor to environmental hazards.
The Karachi Chamber of Commerce and Industry (KCCI) members directory has declared on its website a list of 23,520 registered SMEs as members [48]. Out of all of these registered KCCI members, 10,000 SMEs (target population) have been estimated as manufacturing SMEs.
The target respondents were chief executive officers, managing directors, managers, and owners of SMEs. The distribution of the survey was carried out through an online survey form. A pilot study was conducted once the instrument was pre-tested and finalized, to enhance its reliability and validity. A pilot sample of 30 individuals parallel to the study population was chosen. The objective of the pilot test was to seek understandability of the questionnaire by the respondents, to make the instrument faultless by point out any errors, and to determine the time needed to fill out the survey by the respondents.
We contacted 400 firms at random located in the five industrial zones of Karachi, out of which 320 firms agreed to participate in the research. Only completely answered questionnaires were used in the analysis with a response rate of 48.25%, with comprehensive responses from 193 firms. The response rate is consistent with similar online survey method studies in the manufacturing SME sector of Pakistan [49,50]. We performed a statistical analysis of the data by using SPSS and further estimated a structural equation model (SEM) by using PLS smart.

3.2. Characteristics of the Sample

The manufacturing SMEs included in the study were textile manufacturers, chemical product manufacturers, automobile products, and pharma product manufacturers. SMEDA legislation was used as a reference to classify the companies. The SMEDA defines SMEs as: independent enterprises that maintain a standard number of employees limited up to 250 or maintain a capital value limit of up to 25 million Pakistani rupees or have sales of 250 million Pakistani rupees per year [51]. Table 1 shows the additional sample characteristics.

3.3. Measurement of the Variables

Three latent variables were included in this study: (a) proactive environmental strategy, (b) green mindfulness, and (c) environmental performance. The questionnaire used had four sections. Section 1 collected information on the characteristics of the sample (see Table 1), Section 2 included the PES items, Section 3 included GM items, and Section 4 included EP items. The variable measurement items are shown in Table 2. The validity and reliability of the variable’s measurements used in this study were supported by an extensive literature review, pre-testing with two industry and two academic experts, and pilot testing (as reported in Section 3.1).
The five point Likert scale, ranging from 1 = strongly disagree to 5 = strongly agree, was used to record the responses of the respondents regarding their degree of perception relating to each item. A total of 17 items were used to extract the information for the research variables of this study. Five items were used to measure PES, six items to measure GM, and six items to measure EP. The items used for measuring proactive environmental strategies were proposed by Bowen, Cousins [52] and further adapted by Dai, Cantor [12], and Li, Qiao [2]; measuring mindfulness was operationalized and tested by Williams and Seaman [53] and further adapted by [39]; and for measuring environmental performance the operationalization of Large and Thomsen [54] scale was used that was further adapted by many scholars [2,55]. The measurement items for each variable are shown in Table 2.

3.4. Evaluation of Non-Response and Common Method Bias

In a data collection procedure from questionnaire-based survey research, the issue of non-response bias is needed to be treated seriously. The issue of non-response bias arouses when the response rate of the survey is very low. The mean comparison test between the responses of early and late respondents was observed and no statistically significant differences were found in both the groups’ mean thus, as suggested by Rogelberg and Stanton [56], there was no non-response bias in this study.
Similarly, the existence of common method bias (CMB) causes a problem in data collected from surveys and may mislead estimated parameters. Therefore, Harman’s one-factor test was used in this study to detect CMB [57]. The test involves putting all the constructs into an unrotated exploratory factor analysis and then examining the resulting variance [58]. Thus, a factor analysis of the unrotated principal components was carried out using SPSS and found none of the factors had a major variation, which suggests no CMB.

3.5. Analysis of Validity and Reliability

The validity of a measuring instrument is defined as the ability to understand whether a questionnaire is measuring what it is supposed to measure. The content validity as a subjective assessment was taken during the pre-test phase by expert opinion. For the construct validity to be assessed, the ability of the instrument to measure the concepts established in the theory, the convergent and discriminant validity were extracted by confirmatory factor analysis (CFA) using PLS Smart. For the reliability to measure the internal consistency of the instrument, Cronbach’s alpha coefficient was measured.
The latent variables, measurement items, Cronbach alpha values (CA), standardized factor loadings (FL), composite reliability (CR), and average variance extracted (AVE) are shown in Table 2. Moreover, all factor loadings were greater than 0.5, the CR composite reliability of all constructs is greater than 0.7, and the average variance extracted (AVE) was greater than 0.5, so the convergent validity exists as per the Fornell and Larcker criteria.
Table 3 shows the diagonal matrix for the values of the square root of the AVE for each construct and for the off-diagonal matrix, a correlation can be seen for the values between each pair of constructs. The diagonal elements of this matrix are larger than the correlations between each pair of constructs, thus providing evidence for the discriminant validity of each construct.
The HTMT (heterotrait–monotrait) ratio has gained preference over the Fornell and Larcker criteria recently to check the discriminant validity in structural equation modeling [59]. Table 4 shows the results of the HTMT ratio and all the ratios are lower than the threshold value of 0.90 as recommended by Henseler, Ringle [60]. Thus, the discriminant validity is confirmed, and the construct measures are empirically unique.
The most used internal consistency measure for the reliability of the instrument is the Cronbach’s Alpha (CA) coefficient [61]. There are no definite rules that exist for measuring internal consistencies. However, an internal consistency of 0.8 and above is believed good and a minimum of 0.7 is deemed adequate. The CA values of all the constructs shown in Table 2 are above 0.8, thus providing evidence for good internal consistency of the construct with a reliable instrument.

4. Data Analysis and Results

After examining the validity and reliability of the measurement model, we analyzed the data using PLS Smart and evaluated the relationships between the latent variables of the structural model to examine the proposed hypotheses.

4.1. SEM Analysis and Hypotheses Testing

To examine the proposed four hypotheses regarding the relationships of proactive environmental strategies, green mindfulness, and environmental performance, we estimated a structural equation model using PLS Smart. The final research model with structural path coefficients is shown in Figure 2.
Table 5 shows the summary of indices of the structural models. The predictive accuracy (R2) of GM was 0.519, which depicts that 51.9% variation in green mindfulness (GM) could be explained by the proactive environmental strategy (PES). Furthermore, the predictive accuracy (R2) of EP was 0.640, it concludes that 64.0% variation in environmental performance (EP) could be explained by the proactive environmental strategy (PES) and green mindfulness (GM). Likewise, to assess the problem of multicollinearity the variance inflation factor (VIF) was examined and found no issues of multicollinearity in the data as the VIF was less than 5 as suggested by [62].
Moreover, the Stone-Geisser Q2 was more than zero indicating that the exogenous constructs proactive environmental strategies and green mindfulness had predictive relevance for the endogenous construct’s GM and EP (see Table 5). Additionally, the effect size f2 value fell under the suggested guidelines by Cohen [63] and endorsed a substantial effect of the exogenous constructs on the endogenous construct. Furthermore, the model fit indices SRMR, NFI, and rms Theta were satisfactory (see Table 5), as the standardized root mean square (SRMR) was less than 0.08 as suggested by Henseler, Hubona [64], the normed fit index (NFI) was not more than 0.9, and the root mean squared residual covariance matrix (rms Theta) was below 0.12, which indicated that the models are well fitted and can be used further for hypothesis testing.
Table 6 shows the PLS-SEM findings that include the standardized path coefficient estimates, T-statistics values, and the p-values of the four proposed research hypotheses. From the values shown in Table 6, the relationship between the latent variables can be supported.
The findings of the partial least square structural equation revealed that (H1) proactive environmental strategies (PES) have an insignificant effect on environmental performance (EP) with the values of β = 0.159, t = 1.710, and p > 0.05. However, (H2) PES has a positive and significant effects on green mindfulness (GM) with values of β = 0.721, t = 15.593 and p < 0.05. Furthermore, (H3) GM has a significant and positive effects on EP with values of β = 0.678, t = 7.944 and p < 0.05. Therefore, the direct relationship of H1 is not accepted, but the direct relationships of H2 and H3 are accepted (see Table 6).
Additionally, the results show that (H4) the indirect or mediating effect of green mindfulness between the relationship of PES and environmental performance is positive and significant, with the values of β = 0.488, t = 6.922, and p < 0.05. This suggests that green mindfulness fully mediates the relationship between PES and EP.

4.2. Direct, Indirect, and Total Effects

The direct effects of PES on EP (β = 0.159, t = 1.710) were insignificant, PES on GM (β = 0.721, t = 15.593) and GM on EP (β = 0.678, t = 7.944) were positive and significant. Similarly, the indirect effect of GM on the relationship between PES and EP (β = 0.488, t = 6.922) was also significant, which shows full mediation occurred in the model. The direct, indirect, and total effects of PES and GM on environmental performance are summarized in Table 7.

5. Discussion & Conclusions

5.1. Findings and Contributions

The main objective of this research study was to examine the relationship between proactive environmental strategies, green mindfulness, and environmental performance in the small- and medium-sized manufacturing enterprises of Karachi city in Pakistan. As indicated in the literature, environmental management has significant importance for all SMEs. Although SMEs are significant stakeholders in the positive contribution to the economy, they are also a big contributor to generating environmentally hazardous materials. However, environmental management has not been emphasized in the small- and medium-sized manufacturing sector of Pakistan.
Based on the extensive understanding of the literature, the researchers anticipated that implementing a proactive environmental strategy through creating strict environmental regulations beyond basic compliance, highly prioritizing the importance of environmental issues, effectively managing environmental risk of daily business operations, and overall leading the industry toward the status of environmental protection could improve the environmental performance of SMEs. In this regard, the first objective of this study was to examine the relationship between proactive environmental strategies and environmental performance. This proposition was tested and verified through the empirical data and was found insignificant, as supported in previous studies [21,50].
Measuring the relationship between organizational proactive environmental strategies and green mindfulness in the manufacturing sector of Pakistan was the second objective of this study. Mindfulness is the state of conscious awareness regarding the context and content of environmental information and knowledge. Mindful organizations are always ready for any failures and develop strategies for precautions for their stakeholders, including employees, customers, and environmental damages. The greater the interest of top management in prioritizing and understanding environmental issues the more awareness of problems related to the environment increases with mindfulness through the obsession with failures, sensitivity to operations, assurance to resilience, deference to skill, and reluctance to simplicity. This proposition was tested and verified through the empirical data and was found significant that the PES has a positive relationship with green mindfulness in the context of SMEs in Pakistan, as is also supported in previous studies [42,65].
The third objective of this study was to examine the relationship between green mindfulness and the environmental performance of Pakistani SMEs. The findings of the present study reflect that a mindful attitude toward green management has considerable importance for environmental performance in the manufacturing industry. These findings of a positive significant impact of green mindfulness on environmental performance are in line with the previous literature [66,67].
Lastly, the final objective of the current study sought to examine the effect of green mindfulness as a mediating role between the relationship of proactive environmental strategies and environmental performance in the manufacturing SMEs of Karachi, Pakistan. The results revealed that green mindfulness as a dynamic capability of a small- or medium-sized enterprise acts as a partial mediator in making the relationship between PES and EP significant. Thus, the results conclude that a green mindful attitude of SME managers boosts the relationship between proactive environmental strategies and environmental performance. These findings are consistent with the literature [26,42,68].

5.2. Implications and Novelty

The results of this study may help improve the environmental performance of the manufacturing sector enterprises of Pakistan if adopted effectively by industry practitioners and governmental policymakers. Proactiveness in designing environmental strategies is essential for all practitioners and policymakers. The firms need to enhance their employees’ abilities by building mindful attitudes and behaviors toward environmental sustainability. This mindful attitude may help the employees to be able to deal with the available environmental knowledge effectively and efficiently.
Therefore, manufacturing firms, specifically the small- and medium-sized enterprises in Pakistan, are advised to encourage promoting proactive environmental strategies to improve mindful attitudes among employees and to enhance the overall organizational environmental performance effectively and efficiently. Therefore, small- and medium-sized manufacturers are advised to design mindful strategies relating to environmental protection are cost-effective and only need organizational contextual attention and awareness relating to environmental sustainability. SMEs can gain economic benefits ultimately once their environmental performance is improved by giving high priority to the environment and managing the environmental risk effectively. Implementation of green mindful strategies such as freely discussing the environmental issues and problems with the employees and rewarding them if they share any new environmental knowledge and information with the organization is a cost-effective approach and it can encourage environmental sustainability within the organization. Thus, this ecological stability within an organization can balance the economic development of the organization and maximize the economic profits of the firm owners.
The current study’s findings are restricted to a particular region as well as a specific sector. To attract more exhaustive solutions, future researchers are recommended to emphasize other sectors and geographical regions.

Author Contributions

Conceptualization, M.I.; methodology, M.I.; software, M.I.; validation, M.I. and R.M.; formal analysis, M.I.; writing—original draft preparation, M.I.; writing—review and editing, M.I. and R.M.; supervision, R.M. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

The data are not publicly available due to privacy and confidentiality of the information collected from the respondents and prior consent from respondent is required before sharing the data.

Conflicts of Interest

The authors declare no conflict of interest.

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Sustainability 14 12431 g001 550
Figure 1. Proposed conceptual model.
Figure 1. Proposed conceptual model.
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Figure 2. Final research model with structural path coefficients.
Figure 2. Final research model with structural path coefficients.
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Table
Table 1. Characteristics of the sample.
Table 1. Characteristics of the sample.
Characteristics Number of Firms% Of Firms
Firm Size
Less than 10 employees4322.3
10–50 employees5729.5
51–100 employees2613.5
101–150 employees168.3
151–250 employees5126.4
Firm Age
Less than 5 years4724.4
5–10 years3317.1
11–15 years2915.0
16–20 years2010.4
More than 20 years6433.2
Industry
Textiles and apparels3317.1
Wood and furniture168.3
Food and beverages2714.0
Chemicals and Pharma2915.0
Transport equipment2613.5
Metal products63.1
Electrical and electronics42.1
Rubber and Plastic84.1
Information Communication Technology178.8
Others2714.0
Ownership structure
Sole proprietor8343.0
Partnership2915.0
Limited Company8142.0
Table
Table 2. Standardized factor loadings, Cronbach alpha, composite reliability, and average variance extracted from CFA.
Table 2. Standardized factor loadings, Cronbach alpha, composite reliability, and average variance extracted from CFA.
Measurement ItemsFLCACRAVE
Proactive Environmental Strategy (PES) 0.9200.9400.758
PES1“Our firm always attempts to go beyond basic compliance with laws and regulations on environmental issues.”0.849
PES2“The top managers in our firm give environmental issues a high priority.”0.904
PES3“Our firm leads our industry on environmental issues.”0.811
PES4“Our firm effectively manages the environmental risks that affect our business.”0.857
PES5“Our corporate management gives high priority to environmental issues.”0.928
Green Mindfulness (GM) 0.9320.9470.748
GM1“The members of the company feel free to discuss environmental issues and problems.”0.832
GM2“The members of the company are encouraged to express different views with respect to environmental issues and problems.”0.855
GM3“The members of the company pay attention to what is happening if unexpected environmental issues and problems arise.”0.884
GM4“The members of the company are inclined to report environmental information and knowledge that have significant consequences.”0.884
GM5“The members of the company are rewarded if they share and announce new environmental information and knowledge.”0.843
GM6“The members of the company know what is readily available for consultation if unexpected environmental issues and problems arise.”0.889
Environmental Performance (EP) 0.9530.9620.810
EP1“We have achieved a reduction of pollution and waste.”0.887
EP2“We have improved compliance with environmental laws.”0.902
EP3“We have increased the level of recycling.”0.869
EP4“We have preserved the environment.”0.921
EP5“We have improved the environmental reputation of our company.”0.909
EP6“We have improved the overall environmental performance of our company.”0.912
Note: FL: factor loading; CA: Cronbach alpha; CR: composite reliability; AVE: average variance extracted. All factor loadings are statistically significant at a p-value < 0.05.
Table
Table 3. Measurement Model: Convergent and discriminant validity (Fornell-Larcker).
Table 3. Measurement Model: Convergent and discriminant validity (Fornell-Larcker).
ConstructsAVECorrelation
PESGMEP
Proactive Environmental Strategy (PES)0.7580.871
Green Mindfulness (GM)0.7480.7210.865
Environmental Performance (EP)0.8100.6480.7920.900
Note: AVE: average variance extracted. The diagonal shows the square root of the AVE.
Table
Table 4. HTMT (heterotrait–monotrait ratio).
Table 4. HTMT (heterotrait–monotrait ratio).
PESGM
Green Mindfulness (GM)0.772
Environmental Performance (EP)0.6880.836
Table
Table 5. Structural model: Predictive accuracy, collinearity, relevance, effect size, and fit indices.
Table 5. Structural model: Predictive accuracy, collinearity, relevance, effect size, and fit indices.
Model Fit Indices
ConstructR-SqrAdj. R-SqrVIFQ-Sqrf-SqrSRMRNFIrms Theta
GM0.5190.5172.0790.6421.0800.0500.8910.114
EP0.6400.6362.2780.7280.614
Table
Table 6. Structural model: Path coefficient estimates and hypotheses result.
Table 6. Structural model: Path coefficient estimates and hypotheses result.
HypothesesRelationshipEstimate (β)Standard ErrorT-Valuep-ValueResult
Direct relations
H1PES → EP0.1590.0931.7100.088Not Supported
H2PES → GM0.7210.04615.5930.000Supported
H3GM → EP0.6780.0857.9440.000Supported
Indirect or Mediating relation
H4PES → GM → EP0.4880.0716.9220.000Supported
Note: PES = Proactive Environmental Strategy, GM = Green Mindfulness, EP = Environmental Performance.
Table
Table 7. Direct, indirect, and total effects among the structural model variables.
Table 7. Direct, indirect, and total effects among the structural model variables.
Direct EffectIndirect EffectTotal Effect
PESGMPESGMPESGM
GM0.721 *---0.721 *-
EP0.1590.678 *0.488 *-0.648 *0.678 *
Note: * significant at p < 0.05, PES = Proactive Environmental Strategy, GM = Green Mindfulness, EP = Environmental Performance.
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Ibrahim, M.; Mahmood, R. Proactive Environmental Strategy and Environmental Performance of the Manufacturing SMEs of Karachi City in Pakistan: Role of Green Mindfulness as a DCV. Sustainability 2022, 14, 12431. https://doi.org/10.3390/su141912431

AMA Style

Ibrahim M, Mahmood R. Proactive Environmental Strategy and Environmental Performance of the Manufacturing SMEs of Karachi City in Pakistan: Role of Green Mindfulness as a DCV. Sustainability. 2022; 14(19):12431. https://doi.org/10.3390/su141912431

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Ibrahim, Muhammad, and Rosli Mahmood. 2022. "Proactive Environmental Strategy and Environmental Performance of the Manufacturing SMEs of Karachi City in Pakistan: Role of Green Mindfulness as a DCV" Sustainability 14, no. 19: 12431. https://doi.org/10.3390/su141912431

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