Driving SME Sustainability via the Influence of Green Capital, HRM, and Leadership
Abstract
1. Introduction
- RQ1: How do GIC and GHRM influence green innovation, which leads to environmental performance?
- RQ2: Does green innovation positively mediate between GIC, GHRM, and environmental performance?
- RQ3: Does GTL positively moderate between GIC, GHRM, and green innovation?
2. Literature Review and Hypotheses Development
2.1. Theoretical Foundation
2.2. Relationship Between GIC and Environmental Performance
2.3. Relationship Between GIC and Green Innovation
2.4. Relationship Between GHRM and Environmental Performance
2.5. Relationship Between GHRM and Green Innovation
2.6. Relationship Between Green Innovation and Environmental Performance
2.7. The Mediating Role of Green Innovation
2.8. The Moderating Role of Green Transformational Leadership
3. Materials and Methods
3.1. Procedure and Data Collection
3.2. Measures
3.3. Demographic Profile of the Respondents
3.4. Common Method Bias
4. Results
4.1. Measurement Model Evaluation
4.1.1. Reliability and Validity of First-Order Constructs
4.1.2. Reliability and Validity at Second-Order Constructs
4.2. Predictive Relevance
4.3. Hypothesis Results
4.4. Discussion
4.5. Theoretical Implications
4.6. Practical Implications
4.7. Conclusions
5. Limitations and Future Research Recommendations
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
Appendix A. Questionnaire
Items |
Green Intellectual Capital Green Human Capital
Green Ability
Green Product Innovation My company uses materials that
The manufacturing processes of my company effectively reduce…
Environmental activities significantly…
|
References
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Construct | Operational Definition | Reference |
---|---|---|
Green Intellectual Capital (GIC) | The collective environmental knowledge, capabilities, and relationships that contribute to sustainable performance are embedded in an organization’s human, structural, and relational capital. | [5,21] |
Green Human Resource Management (GHRM) | Environmentally oriented HR practices, such as green recruitment, training, performance management, and rewards, aim to foster pro-environmental behavior among employees. | [19,22] |
Green Innovation (GI) | Developing and implementing new or significantly improved eco-friendly products, processes, or practices intended to reduce environmental harm. | [23] |
Green Transformational Leadership (GTL) | A leadership style that motivates and inspires employees to achieve environmental goals by articulating a green vision, providing support, and fostering pro-environmental values. | [24] |
Environmental Performance (EP) | The extent to which a firm minimizes its negative environmental impacts, including reductions in emissions, waste, and resource consumption, through sustainable practices. | [25] |
Characteristics | Range | Frequency | Percentage |
---|---|---|---|
Organization Type | Public Limited | 202 | 61.40 |
Private Limited | 127 | 38.60 | |
Total | 329 | 100.00 | |
Age of the Organization | <5 years | 60 | 18.24 |
6–10 years | 69 | 20.97 | |
11–20 years | 66 | 20.06 | |
21–40 years | 80 | 24.32 | |
>40 years | 51 | 15.51 | |
Total | 329 | 100.00 | |
Size of the Organization | <100 | 52 | 15.80 |
100–200 | 60 | 18.84 | |
201–500 | 70 | 21.28 | |
501–1000 | 76 | 23.10 | |
>1000 | 69 | 20.98 | |
Total | 329 | 100.00 |
Component | Initial Eigenvalues | Extraction Sums of Squared Loadings | ||||
---|---|---|---|---|---|---|
Total | % of Variance | Cumulative % | Total | % of Variance | Cumulative % | |
1 | 4.339 | 43.387 | 43.387 | 4.339 | 43.387 | 43.387 |
2 | 1.061 | 10.610 | 53.997 | 1.061 | 10.610 | 53.997 |
3 | 1.029 | 10.286 | 64.283 | 1.029 | 10.286 | 64.283 |
4 | 0.847 | 8.474 | 72.757 | 0.847 | 8.474 | 72.757 |
5 | 0.684 | 6.837 | 79.594 | 0.684 | 6.837 | 79.594 |
6 | 0.558 | 5.576 | 85.170 | 0.558 | 5.576 | 85.170 |
7 | 0.478 | 4.782 | 89.952 | 0.478 | 4.782 | 89.952 |
8 | 0.393 | 3.930 | 93.882 | 0.393 | 3.930 | 93.882 |
9 | 0.356 | 3.557 | 97.439 | 0.356 | 3.557 | 97.439 |
10 | 0.256 | 2.561 | 100.000 | 0.256 | 2.561 | 100.000 |
First-Order Constructs | Second-Order Constructs | Items | Loadings | VIF | Ca | CR | AVE |
---|---|---|---|---|---|---|---|
Green Human Capital | GHC1 | 0.784 | 1.851 | 0.835 | 0.890 | 0.669 | |
GHC2 | 0.851 | 2.308 | |||||
GHC3 | 0.833 | 2.032 | |||||
GHC4 | 0.803 | 1.699 | |||||
Green Relational Capital | GRC2 | 0.867 | 2.258 | 0.889 | 0.923 | 0.750 | |
GRC3 | 0.839 | 2.157 | |||||
GRC4 | 0.905 | 3.207 | |||||
GRC5 | 0.850 | 2.517 | |||||
Green Structural Capital | GSC1 | 0.710 | 1.733 | 0.874 | 0.903 | 0.572 | |
GSC2 | 0.844 | 2.790 | |||||
GSC3 | 0.802 | 2.328 | |||||
GSC4 | 0.786 | 1.921 | |||||
GSC6 | 0.674 | 1.554 | |||||
GSC7 | 0.792 | 1.974 | |||||
GSC8 | 0.665 | 1.548 | |||||
Green Intellectual Capital | GHC | 0.773 | 1.540 | 0.746 | 0.853 | 0.659 | |
GRC | 0.829 | 1.372 | |||||
GSC | 0.833 | 1.674 | |||||
Green Ability | GA1 | 0.889 | 2.478 | 0.859 | 0.905 | 0.704 | |
GA2 | 0.784 | 1.762 | |||||
GA3 | 0.864 | 2.302 | |||||
GA4 | 0.816 | 1.860 | |||||
Green Motivation | GM1 | 0.797 | 1.773 | 0.843 | 0.895 | 0.680 | |
GM2 | 0.796 | 1.808 | |||||
GM3 | 0.859 | 2.692 | |||||
GM4 | 0.846 | 2.603 | |||||
Green Opportunity | GOP1 | 0.883 | 2.097 | 0.822 | 0.894 | 0.738 | |
GOP2 | 0.888 | 2.162 | |||||
GOP3 | 0.804 | 1.583 | |||||
Green Human Resource Management | GA | 0.863 | 1.910 | 0.757 | 0.861 | 0.676 | |
GM | 0.718 | 1.276 | |||||
GOP | 0.875 | 1.941 | |||||
Green Product Innovation | GPDI1 | 0.812 | 1.872 | 0.866 | 0.909 | 0.714 | |
GPDI2 | 0.823 | 1.903 | |||||
GPDI3 | 0.871 | 2.398 | |||||
GPDI4 | 0.874 | 2.428 | |||||
Green Process Innovation | GPRI1 | 0.904 | 2.600 | 0.871 | 0.921 | 0.795 | |
GPRI2 | 0.918 | 2.897 | |||||
GPRI3 | 0.852 | 1.944 | |||||
Green Innovation | GPDI | 0.904 | 1.449 | 0.715 | 0.874 | 0.777 | |
GPRI | 0.858 | 1.449 | |||||
Green Transformational Leadership | GTL3 | 0.720 | 2.064 | 0.875 | 0.886 | 0.663 | |
GTL4 | 0.754 | 1.931 | |||||
GTL5 | 0.982 | 2.639 | |||||
GTL6 | 0.776 | 2.394 | |||||
Environmental Performance | EP2 | 0.807 | 1.544 | 0.801 | 0.869 | 0.624 | |
EP3 | 0.815 | 2.074 | |||||
EP4 | 0.786 | 1.984 | |||||
EP5 | 0.750 | 1.421 |
Constructs | EP | GA | GHC | GM | GOP | GPDI | GPRI | GRC | GSC | GTL |
---|---|---|---|---|---|---|---|---|---|---|
EP | ||||||||||
GA | 0.567 | |||||||||
GHC | 0.460 | 0.392 | ||||||||
GM | 0.448 | 0.485 | 0.244 | |||||||
GOP | 0.656 | 0.792 | 0.423 | 0.518 | ||||||
GPDI | 0.558 | 0.607 | 0.362 | 0.513 | 0.543 | |||||
GPRI | 0.551 | 0.392 | 0.282 | 0.392 | 0.473 | 0.637 | ||||
GRC | 0.625 | 0.312 | 0.481 | 0.453 | 0.415 | 0.534 | 0.405 | |||
GSC | 0.486 | 0.543 | 0.658 | 0.369 | 0.446 | 0.480 | 0.330 | 0.550 | ||
GTL | 0.082 | 0.044 | 0.073 | 0.084 | 0.102 | 0.075 | 0.052 | 0.070 | 0.088 |
Constructs | EP | GHRM | GI | GIC | GTL |
---|---|---|---|---|---|
EP | |||||
GHRM | 0.716 | ||||
GI | 0.692 | 0.785 | |||
GIC | 0.694 | 0.680 | 0.661 | ||
GTL | 0.082 | 0.089 | 0.074 | 0.077 | |
Fornell–Larker Criterion (second-order constructs) | |||||
Constructs | EP | GHRM | GI | GIC | GTL |
EP | 0.790 | ||||
GHRM | 0.567 | 0.822 | |||
GI | 0.535 | 0.583 | 0.881 | ||
GIC | 0.566 | 0.513 | 0.500 | 0.812 | |
GTL | 0.029 | 0.019 | −0.084 | 0.007 | 0.812 |
EP | GHRM | GI | GIC | GTL | |
---|---|---|---|---|---|
EP2 | 0.806 | 0.497 | 0.485 | 0.555 | −0.002 |
EP3 | 0.814 | 0.433 | 0.416 | 0.388 | 0.038 |
EP4 | 0.786 | 0.424 | 0.321 | 0.303 | 0.068 |
EP5 | 0.751 | 0.423 | 0.435 | 0.489 | 0.004 |
GTL3 | 0.051 | 0.031 | −0.008 | −0.013 | 0.714 |
GTL4 | 0.051 | 0.011 | −0.024 | 0.045 | 0.750 |
GTL5 | 0.016 | 0.012 | −0.099 | −0.002 | 0.983 |
GTL6 | 0.082 | 0.129 | −0.006 | 0.026 | 0.774 |
LV scores—GA | 0.474 | 0.863 | 0.503 | 0.433 | −0.013 |
LV scores—GHC | 0.391 | 0.366 | 0.313 | 0.773 | 0.004 |
LV scores—GM | 0.378 | 0.718 | 0.445 | 0.387 | 0.004 |
LV scores—GOP | 0.535 | 0.875 | 0.489 | 0.443 | 0.054 |
LV scores—GPDI | 0.481 | 0.579 | 0.904 | 0.501 | −0.089 |
LV scores—GPRI | 0.462 | 0.438 | 0.858 | 0.370 | −0.056 |
LV scores—GRC | 0.544 | 0.409 | 0.472 | 0.829 | 0.062 |
LV scores—GSC | 0.420 | 0.474 | 0.408 | 0.833 | −0.061 |
Effect Size | R2 | Q2 | ||
---|---|---|---|---|
Constructs | EP | GI | Endogenous Constructs | |
EP | 0.452 | 0.265 | ||
GHRM | 0.085 | 0.269 | ||
GI | 0.050 | 0.437 | 0.319 | |
GIC | 0.123 | 0.089 | ||
GTL | 0.019 | |||
GTL x GHRM | 0.060 | |||
GTL x GIC | 0.023 |
Relationships | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Hypothesis | IV | Mod | DV | Path Coefficient | STDEV | T Statistics | p Values | 2.5% | 97.5% | Conclusion | ||
Direct Effects | ||||||||||||
H1 | GIC | → | EP | 0.315 | 0.059 | 5.374 | 0.000 | 0.198 | 0.430 | Supported | ||
H2 | GIC | → | GI | 0.263 | 0.057 | 4.571 | 0.000 | 0.154 | 0.382 | Supported | ||
H3 | GHRM | → | EP | 0.280 | 0.058 | 4.804 | 0.000 | 0.166 | 0.393 | Supported | ||
H4 | GHRM | → | GI | 0.454 | 0.057 | 7.950 | 0.000 | 0.331 | 0.557 | Supported | ||
H5 | GI | → | EP | 0.214 | 0.060 | 3.541 | 0.000 | 0.097 | 0.333 | Supported | ||
Moderating Effects | ||||||||||||
H8 | GIC | x | GTL | → | GI | −0.141 | 0.082 | 1.719 | 0.086 | −0.247 | 0.071 | Not Supported |
H9 | GHRM | x | GTL | → | GI | 0.256 | 0.116 | 2.218 | 0.027 | −0.082 | 0.370 | Supported |
Direct Effects | Indirect Effects | Total Effects | ||||||
---|---|---|---|---|---|---|---|---|
Hypotheses | Statistical Paths | β | T Values (p Values) | β | T Values (p Values) | β | T Values (p Values) | Conclusion |
H6 | GIC → GI → EP | 0.315 | 5.374 (0.000) | 0.056 | 2.666 (0.008) | 0.372 | 6.573 (0.000) | Partial mediation |
BCI-LL | 0.198 | 0.022 | 0.259 | |||||
BCI-UL | 0.430 | 0.103 | 0.484 | |||||
H7 | GHRM → GI → EP | 0.280 | 4.804 (0.000) | 0.097 | 3.281 (0.001) | 0.377 | 7.099 (0.000) | Partial mediation |
BCI-LL | 0.166 | 0.041 | 0.269 | |||||
BCI-UL | 0.393 | 0.157 | 0.478 |
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Jamil, K.; Zhang, W.; Anwar, A.; Mustafa, S. Driving SME Sustainability via the Influence of Green Capital, HRM, and Leadership. Sustainability 2025, 17, 6076. https://doi.org/10.3390/su17136076
Jamil K, Zhang W, Anwar A, Mustafa S. Driving SME Sustainability via the Influence of Green Capital, HRM, and Leadership. Sustainability. 2025; 17(13):6076. https://doi.org/10.3390/su17136076
Chicago/Turabian StyleJamil, Khalid, Wen Zhang, Aliya Anwar, and Sohaib Mustafa. 2025. "Driving SME Sustainability via the Influence of Green Capital, HRM, and Leadership" Sustainability 17, no. 13: 6076. https://doi.org/10.3390/su17136076
APA StyleJamil, K., Zhang, W., Anwar, A., & Mustafa, S. (2025). Driving SME Sustainability via the Influence of Green Capital, HRM, and Leadership. Sustainability, 17(13), 6076. https://doi.org/10.3390/su17136076