How Green HRM Enhances Sustainable Organizational Performance: A Capability-Building Explanation Through Green Innovation and Organizational Culture

Abstract

This study examines how Green Human Resource Management (GHRM) is linked to sustainable organizational performance, encompassing environmental, economic, and social outcomes through the capability-building mechanisms of green innovation (GI) and green organizational culture (GOCL) in emerging manufacturing systems. Drawing on the Resource-Based View and capability-based sustainability perspectives, GHRM is conceptualized as a strategic organizational capability that enables firms in developing economies to beyond short-term regulatory compliance toward measurable and integrated sustainability performance outcomes. Survey data were collected from 446 managerial and technical respondents in Ethiopia’s garment and textile industrial parks, one of Africa’s fastest-growing industrial sectors facing significant sustainability challenges. Using Partial Least Squares Structural Equation Modeling (PLS-SEM) with bootstrapping-based mediation analysis, the results show that GHRM is positively associated with sustainable organizational performance, with GI and GOCL operating as key mediating mechanisms that translate HR-related practices into measurable sustainability outcomes. The findings highlight the role of GHRM in strengthening firms’ adaptive and developmental sustainability capabilities by fostering pro-sustainability mindsets and innovation-oriented behaviors, which are particularly critical in resource-constrained and weak-institutional contexts. The study contributes to sustainability and management literature by explicitly linking Green HRM to triple-bottom-line performance through a capability-building framework and by providing rare firm-level empirical evidence from a low-income emerging economy. Practically, the results provide guidance for managers and policy makers to design, monitor, and evaluate HRM systems that intentionally cultivate human, cultural, and innovative capabilities to support long-term organizational sustainability transitions.

1. Introduction

Lately, global discourse has increasingly emphasized the urgency for organizations to operate responsibly in the face of accelerating environmental challenges [1]. Sustainability has therefore shifted from a normative aspiration to a measurable and operational requirement at the organizational level, particularly for production-oriented firms whose activities directly affect environmental, economic, and social outcomes, as evidenced by recent research linking HR strategies to quantifiable sustainability performance metrics [2]. The pace of economic expansion, particularly in industrializing regions, has intensified ecological degradation, resource depletion, and pollution, making sustainability a central concern for policymakers and firms alike [3]. Consequently, production-oriented companies are now expected to demonstrate simultaneous responsibility across environmental, social, and economic dimensions, often conceptualized through triple-bottom-line organizational performance indicators, yet balancing these dimensions remains a complex managerial challenge [4].

Across many developing economies, large-scale manufacturing continues to generate excessive waste, consume disproportionate energy, and create hazardous working conditions [5]. These sustainability challenges affect ecological, social, and economic domains, undermining long-term competitiveness and workforce well-being, particularly in textile and garment production where water use, chemical processes, and labor issues intersect with weak regulatory enforcement [6]. Although the manufacturing sector contributes substantially to GDP, export revenue, and employment, empirical research explaining how firms in such contexts build internal capabilities to measure, manage, and improve sustainable organizational performance remains limited [2]. This challenge is especially visible in emerging nations such as Ethiopia, where the manufacturing sector faces environmental and social vulnerabilities despite its significant potential for industrial growth [7]. In sectors such as textile and garment manufacturing, sustainability pressures are intensified by water-intensive production processes, chemical use, labor-intensive operations, and weak enforcement of environmental and labor regulations. Production systems, if not managed sustainably, become primary sources of industrial waste and ineffective human resource practices [8]. Sustainable corporate performance increasingly depends on firms’ ability to embed green practices into everyday managerial and employee activities [9].

Rather than relying solely on regulatory compliance, sustainability outcomes in developing economies often depend on internally developed organizational capabilities that shape behavior, routines, and innovation processes [10]. Global trends such as climate change, industrialization, and globalization have compelled organizations to rethink their operational systems and adopt greener pathways [11]. Green Human Resource Management (GHRM) has emerged as a strategic approach that integrates environmental considerations into HR functions to align workforce skills and behaviors with sustainability objectives [12]. Recent evidence shows that GHRM enhances green innovation and organizational culture, translating HR practices into measurable sustainability performance [10]. By embedding environmental values into recruitment, training, performance management, and reward systems, GHRM enables organizations to institutionalize sustainability-oriented practices across all levels [13,14]. At a conceptual level, GHRM represents a set of HR-related mechanisms through which organizations can mobilize human capital toward sustainability goals, without requiring detailed elaboration of individual HR practices at this stage. From a capability-building perspective, GHRM extends beyond short-term compliance by strengthening firms’ internal routines, shared values, and environmental competencies, thereby enabling durable sustainability outcomes [15].

Green innovation (GI) and green organizational culture (GOCL) are key internal capabilities that translate sustainability-oriented intentions into operational outcomes [16]. GI refers broadly to the development of environmentally improved processes, products, or practices that reduce ecological harm while supporting competitiveness [17]. GOCL reflects the extent to which environmental values are embedded in organizational norms and daily behaviors, shaping how employees interpret and enact sustainability priorities [18]. While prior studies often examine GHRM, GI, and GOCL independently, considerably less attention has been paid to their complementary and mutually reinforcing roles in enabling measurable sustainable organizational performance [10]. Specifically, it remains unclear how HR-driven practices are converted into triple-bottom-line sustainability outcomes through innovation and culture, particularly in manufacturing contexts characterized by resource constraints and institutional voids [19]. This constitutes a critical research gap in sustainability and management literature.

Examining the influence of GHRM on sustainable organizational performance in the textile and apparel sector of developing economies, particularly Ethiopia, is timely and essential for several reasons. First, although GHRM is increasingly recognized as relevant for sustainability-oriented management, most empirical evidence is drawn from developed economies and emphasizes external institutional pressures rather than internal capability-building processes. As a result, limited insight exists into how GHRM simultaneously fosters innovation- and culture-based capabilities that support sustainability measurement and improvement in developing-country manufacturing systems [20]. Second, empirical research on sustainability-oriented organizational practices in low-income countries remains scarce, despite rapid industrial expansion and mounting environmental and social risks. By focusing on Ethiopia’s textile and garment industrial parks, this study responds to calls for context-sensitive sustainability research reflecting socio-economic realities beyond developed-country settings. Third, while the textile and apparel industry is widely recognized as environmentally and socially sensitive, its internal sustainability management mechanisms—particularly those related to human resource systems—remain underexplored. Finally, although GI and GOCL are acknowledged as drivers of sustainability, their joint mediating role within a capability-building model linking GHRM to sustainable organizational performance has not been systematically tested in emerging-economy manufacturing contexts.

Despite growing evidence on the role of GHRM in promoting sustainability, prior research has largely focused on developed economies and on direct relationships between HR practices and environmental outcomes, leaving several gaps in understanding how sustainable organizational performance is achieved in emerging economies. First, the mechanisms through which GHRM translates into measurable triple-bottom-line outcomes remain underexplored, particularly the joint mediating effects of green innovation (GI) and green organizational culture (GOCL) as complementary internal capabilities. Second, empirical evidence on how firms in resource-constrained and institutionally volatile contexts build internal capabilities to sustain performance across economic, environmental, and social dimensions is scarce. This study addresses these gaps by proposing and testing a capability-building model in Ethiopia’s textile and garment sector, demonstrating how GHRM fosters innovation- and culture-based capabilities that collectively drive sustainable organizational performance. By integrating GHRM, GI, and GOCL within a unified framework and providing firm-level evidence from a low-income emerging economy, this study contributes both theoretically by extending capability-based perspectives of sustainability and practically by offering actionable guidance for managers and policymakers to enhance sustainability outcomes.

The remainder of the paper is structured as follows. The next section reviews relevant literature and develops theoretical framework and hypotheses. This is followed by research methodology. Subsequently, the results are presented and discussed, and the paper concludes with implications, limitations, and directions for future research.

2. Theoretical Background and Hypothesis Development

2.1. Theoretical Background

Resource-Based View Theory

The Resource-Based View (RBV) offers a foundational lens for understanding why some organizations consistently outperform others by strategic internal capabilities that are valuable, rare, inimitable, and non-substitutable [21]. In sustainability research, RBV explains how firms move beyond short-term compliance toward building internal capabilities that support long-term economic, environmental, and social performance [22]. Rather than framing environmental initiatives merely as external compliance obligations, RBV posits that firms can transform internal resources including human, technological, and organizational assets into enduring competitive advantages when strategically aligned with sustainability objectives [23].

The Natural Resource-Based View (NRBV) extends RBV by explicitly incorporating environmental considerations into strategic analysis. It argues that environmental capabilities, such as pollution prevention, eco-efficient processes, and sustainable resource management, constitute critical strategic assets, particularly in industries with substantial ecological footprints [24]. NRBV thus provides a direct theoretical bridge between firm-level capability development and measurable sustainability outcomes, emphasizing that environmental stewardship can reinforce competitiveness rather than undermine it. Empirical evidence suggests that firms capable of minimizing waste and efficiently utilizing natural resources often achieve superior financial and operational performance, demonstrating that environmental responsibility and organizational resilience are mutually reinforcing [25].

Within this study, green innovation (GI) is positioned as a central mechanism through which NRBV-oriented capabilities are operationalized. GI represents a tangible manifestation of a firm’s ability to convert natural, technological, and organizational resources into environmentally improved processes, products, and practices. Effective GI requires not only access to resources but also the organizational capacity to embed environmental considerations into routines, strategic decision-making, and knowledge-sharing practices [26]. This perspective is particularly salient in resource-constrained emerging economies, where internally generated environmental capabilities are strategically critical [27].

To explain how such environmental capabilities are cultivated at the employee and organizational levels, RBV and NRBV are frequently integrated with the Ability–Motivation–Opportunity (AMO) framework. The AMO model posits that employees contribute effectively to organizational objectives when they possess the necessary abilities, are motivated to act, and are provided with opportunities to participate meaningfully [28]. Here, AMO provides the micro-foundational logic explaining how HR systems transform abstract sustainability intentions into concrete employee behaviors and organizational routines.

Within this integrated framework, Green Human Resource Management (GHRM) is conceptualized as a capability-building system rather than a set of isolated practices. GHRM enhances employees’ green knowledge and technical skills (ability), strengthens intrinsic and extrinsic motivation for pro-environmental behavior (motivation), and provides structured opportunities for participation in environmental initiatives (opportunity) [29]. Practices such as green recruitment, targeted training programs, performance-linked environmental incentives, and employee empowerment collectively cultivate an internal green capability that aligns human capital with strategic sustainability priorities, reflecting RBV’s emphasis on developing inimitable internal resources that support sustained organizational performance.

By integrating RBV, NRBV, and AMO in a stepwise manner, this study advances a coherent theoretical explanation of how firm-level sustainability performance is generated. RBV explains why internal capabilities matter for competitive outcomes; NRBV specifies which environmental capabilities are strategically relevant; and AMO clarifies how HR systems enable employees to enact these capabilities in practice. Within this logic, GHRM functions as the enabling capability, while GI and green organizational culture represent complementary mechanisms through which sustainability-oriented capabilities are translated into measurable environmental, social, and economic performance outcomes.

The Ethiopian textile and apparel manufacturing context does not alter these theoretical relationships but provides a critical empirical setting to test their relevance. Characterized by institutional voids, regulatory gaps, and resource constraints, this context allows examination of whether capability-based sustainability mechanisms operate effectively when external pressures are weaker and internal systems play a decisive role [30].

In sum, this integrated RBV–NRBV–AMO framework underpins the conceptual model by distinguishing direct effects (GHRM → sustainable organizational performance) and indirect effects (GHRM → GI/GOCL → sustainable organizational performance). This capability-based perspective positions the study as a contribution to sustainability research that emphasizes measurable organizational performance rather than symbolic or compliance-driven initiatives.

2.2. Hypothesis Development

2.2.1. GHRM and SUP

Human resource management has long been recognized as a central driver of organizational performance, particularly when firms seek to embed sustainability into their strategic agenda [19]. Recent scholarships have shifted attention from general HRM to green human resource management (GHRM), emphasizing how environmentally oriented HR practices not only enhance efficiency but also contribute to social and ecological performance outcomes [31,32]. Recent studies indicate that GHRM fosters internal organizational capabilities that integrate green innovation and green organizational culture, thereby translating HR practices into measurable sustainability performance across environmental, social, and economic dimensions [33]. This shift is grounded in the resource-based view (RBV), which posits that sustained competitive advantage arises from developing strategic resources and capabilities that are valuable, rare, inimitable, and non-substitutable [34].

Within this framework, GHRM practices—such as green recruitment, green training, employee involvement, and performance management—build internal green capabilities by embedding environmental knowledge, cultivating pro-environmental competencies, and motivating workforce behaviors aligned with sustainability objectives [35]. In this study, GHRM is conceptualized as a meta-capability that orchestrates complementary pathways—green innovation (GI) and green organizational culture (GOCL)—enabling firms to generate sustainable performance in a systemic, measurable way, rather than through isolated HR practices. This conceptualization represents a key novelty relative to prior studies, which often examine mediators individually and do not capture the capability-based interplay between HR, innovation, and culture in producing sustainability outcomes [36].

Empirical evidence from diverse contexts supports this theoretical perspective. For example, research in Saudi Arabian manufacturing firms found that bundled GHRM practices, including green hiring, green training, and environmentally linked performance management and rewards, significantly enhance sustainable organizational performance (SUP) [37]. Similarly, Zhao and Huang reported strong positive correlations between GHRM and sustainability outcomes across multiple industries, showing that employee engagement in eco-friendly practices mediates the relationship between HR strategy and organizational sustainability [38]. These findings collectively highlight that internal capability pathways are crucial for translating GHRM into measurable sustainability outcomes that include operational efficiency, reduced resource consumption, and improved social performance [39].

Despite these global insights, emerging economies such as Ethiopia present unique institutional, resource, and infrastructural conditions that differentiate them from the developed-country contexts dominating prior GHRM research [40]. The textile and garment sector in Ethiopia faces resource constraints, fragmented regulatory enforcement, and limited technological infrastructure, resulting in sporadic and underdeveloped implementation of GHRM practices [41]. Importantly, the Ethiopian textile and apparel sector provides conditions characterized by institutional voids and resource limitations, allowing this study to explore how capability-based mechanisms connect GHRM to sustainable performance. The analysis assesses the frameworks of RBV, NRBV, and AMO without proposing any modifications, emphasizing the relevance of these theoretical perspectives under constrained external pressures.

Theoretically, investigating GHRM in Ethiopia allows for testing whether green HR practices can cultivate strategic value in resource-constrained manufacturing contexts with limited technological sophistication. It also examines whether GHRM can develop internal capabilities that align with RBV predictions, even in the presence of skill shortages, institutional voids, and cultural nuances that might otherwise influence sustainability outcomes. By situating this study in Ethiopia’s textile and apparel sector, the research assesses the applicability of capability-based mechanisms linking GHRM to sustainable performance under real-world emerging-economy conditions, without implying any modification to established RBV, NRBV, or AMO theoretical relationships.

Given the theoretical logic and contextual realities, a positive and significant relationship between GHRM and SUP is both conceptually robust and empirically meaningful, particularly in Ethiopia’s textile and apparel sector, where sustainability-driven competitiveness is increasingly critical.

H1. 

GHRM positively and significantly affects SUP (Figure 1).

2.2.2. GHRM and GI

Green innovation (GI) refers to the development and implementation of environmentally sustainable products, processes, and services that reduce ecological impact while supporting organizational competitiveness [42]. Contemporary research increasingly frames GI not merely as a technological outcome but as a dynamic organizational capability that emerges when firms systematically cultivate employees’ environmental knowledge, creativity, and sustainability-oriented behaviors. Within this perspective, Green Human Resource Management (GHRM) acts as a central capability-building mechanism by shaping employees’ abilities, motivations, and opportunities to engage in eco-innovative activities [43].

By strategically integrating green recruitment, training, development, and performance management with environmental objectives, firms develop an internal green capability that enables employees to generate actionable eco-innovations and embed sustainability into daily operations. GHRM thus functions as both a catalyst and enabler of GI, translating human capital and organizational resources into measurable environmental outcomes [44]. Empirical studies support this capability-based linkage. For example, research in manufacturing contexts such as the United Arab Emirates shows that bundled GHRM practices stimulate continuous improvements in green processes, products, and services, enhancing overall environmental performance [45]. Employees equipped with environmental competencies, motivated to act sustainably, and empowered to innovate are more likely to produce solutions that improve resource efficiency, reduce waste, and foster cleaner production. Integrating recruitment of environmentally conscious talent, targeted green training, and performance-linked incentives for eco-innovations reinforces the firm’s capacity for sustainable innovation [46].

While these relationships are well-documented in developed-country settings, evidence from emerging economies remains limited. Firms in developing countries often face institutional fragility, resource scarcity, outdated technologies, and inconsistent regulatory enforcement, which constrain innovation but simultaneously make GI a critical strategic priority for sustainability-driven competitiveness [47].

The Ethiopian textile and garment industry represents a high-need, low-capacity context where GI is essential for both compliance with international sustainability standards and operational efficiency. Firms encounter water scarcity, inefficient resource use, outdated equipment, and rising pressure from global buyers to meet environmental and social benchmarks. In this environment, GHRM provides a mechanism to systematically build employee knowledge, motivation, and participatory opportunities, thereby strengthening the organizational capacity to generate meaningful green innovations.

Synthesizing these theoretical and contextual insights, GHRM enhances employees’ ecological knowledge, motivation, and opportunities, which collectively translate into actionable green innovations. By embedding environmentally oriented recruitment, training, empowerment, and performance incentives, organizations develop internal green capabilities critical for operationalizing sustainability objectives. Accordingly, we hypothesize:

H2. 

GHRM positively and significantly associates with GI (Figure 1).

2.2.3. GHRM and GOCL

Green organizational culture (GOCL) represents a collective workplace ethos in which employees prioritize ecological responsibility, extending beyond mere compliance or financial motives to generate substantive environmental outcomes [48]. GOCL encompasses shared values, norms, and symbolic practices that communicate an organization’s dedication to sustainability [49]. As environmental pressures intensify, firms increasingly recognize that embedding pro-environmental principles into organizational routines, policies, and decision-making processes is essential not only for regulatory compliance but also for long-term competitive advantage [50]. Within this context, Green Human Resource Management (GHRM) serves as a strategic capability-building mechanism, embedding ecological values across recruitment, training, development, performance management, and reward systems [51]. By cultivating employees’ environmental attitudes, reinforcing pro-environmental behaviors, and institutionalizing sustainability-oriented routines, GHRM creates the internal conditions necessary for a deeply embedded green organizational culture [52]. Selecting environmentally conscious talent, equipping them with green competencies, and rewarding eco-friendly behaviors operationalizes cultural norms and strengthens the organization’s collective commitment to sustainability [53].

The synergistic operation of GHRM components fosters GOCL. Green recruitment attracts individuals with intrinsic ecological values; green training, empowerment, and participatory decision-making equip employees with knowledge, skills, and agency; and performance management and reward systems reinforce environmentally responsible behaviors. Together, these practices embed sustainability into daily operations and cultivate a culture where environmental responsibility is internalized and continuously enacted. Empirical studies indicate that GOCL strengthens when employees collectively address ecological challenges and when organizations consistently implement sustainability-oriented HR practices [54].

Despite these insights, evidence on how GHRM fosters GOCL in developing-country manufacturing settings is limited. In Ethiopia’s textile and garment sector characterized by high environmental pressures, resource constraints, fragmented regulation, and emerging sustainability capabilities developing a green culture is strategically essential for operational efficiency, compliance with international sustainability standards, and long-term competitiveness. In such environments, GHRM practices catalyze shifts in organizational mindset, instill shared ecological values, and establish the cultural foundations necessary for sustained green performance.

Synthesizing theoretical and contextual perspectives, GHRM functions as a strategic lever that shapes organizational norms, beliefs, and collective behaviors, creating an environment where sustainability is embedded and internal capabilities for continuous green improvement are cultivated. Accordingly, we propose:

H3. 

GHRM positively and significantly affects GOCL (Figure 1).

2.2.4. GI and SUP

Green innovation (GI) has emerged as a key strategic mechanism through which firms can enhance sustainable performance (SUP), defined as improvements in environmental, economic, and social outcomes. Recent evidence shows that GI contributes to sustainability by enabling organizations to integrate environmentally sound technologies, processes, and products that reduce ecological harm and promote operational efficiency [55]. GI plays a role not only in reducing energy use and waste but also in strengthening competitive positioning and stakeholder legitimacy, particularly as markets and regulators increasingly reward sustainable business practices. These dynamics align with recent systematic analyses of sustainable innovation performance, which highlight the multi-dimensional benefits of GI for organizational sustainability performance [56].

Empirical research supports the positive association between GI and sustainable performance. For example, recent bibliometric studies show that firms engaging in green innovation tend to report improvements not only in environmental indicators such as emission reduction and resource efficiency but also in economic outcomes like cost savings and market value [57]. Moreover, evidence from diverse institutional contexts suggests that GI can serve as a mediator in the relationship between strategic sustainability practices and performance outcomes, reinforcing the idea that innovation capability is instrumental for achieving sustainability goals. This is consistent with findings that link organizational innovation efforts with sustainable corporate performance metrics across regions [58].

GI typically encompasses both green product innovation and green process innovation, and both dimensions have been shown to contribute to sustainability by promoting cleaner production, improved resource utilization, and reduced environmental footprint [59]. Firms that adopt these forms of innovation enhance not only environmental outcomes but also economic resilience and social well-being through improved operational practices and enhanced worker safety [60]. These findings underscore GI’s role in supporting integrated sustainability performance, consistent with the broader literature linking sustainable innovation and triple-bottom-line outcomes.

The benefits of GI extend beyond purely environmental improvements. Sustainable innovation can also enhance social dimensions such as worker health and community well-being by fostering safer production systems and reducing exposure to harmful pollutants. Such impacts reflect the broader role of GI in advancing socio-economic sustainability objectives, which align with firm commitments to environmental stewardship and social responsibility [61].

In developing-country contexts such as Ethiopia’s textile and garment industry, the strategic relevance of GI is particularly pronounced. Firms in this sector face water scarcity, chemical pollution, outdated technologies, and increasing global pressures to meet sustainability standards. In these environments, GI offers a mechanism for overcoming systemic constraints by modernizing production processes, reducing environmental harm, and enhancing competitiveness in resource-limited settings. Integrating GI into operational strategies enables manufacturers to pursue long-term sustainability objectives while addressing market and regulatory demands. Synthesizing theoretical insights and empirical evidence, GI emerges as a critical driver of sustainable performance, translating firm capabilities into actionable sustainability outcomes across environmental, economic, and social dimensions. Given this theoretical and contextual grounding, we hypothesize that:

H4. 

GI positively and significantly affects SUP (Figure 1).

2.2.5. GOCL and SUP

A strong green organizational culture (GOCL) serves as a strategic mechanism to enhance sustainable performance (SUP) by systematically aligning employees’ behaviors, values, and decision-making with environmental and social objectives. When employees internalize organizational ecological values, they exhibit higher engagement in sustainability initiatives, enhanced motivation, creativity, and productivity, which collectively improve environmental, social, and economic outcomes [62]. Organizations with a robust GOCL also encourage proactive problem-solving for environmental challenges, enabling the creation of innovative solutions that support long-term sustainability [63]. In essence, GOCL embeds sustainability into daily operations and strategic decisions, creating a self-reinforcing system that drives measurable performance across the triple bottom line.

Conceptually, GOCL comprises shared values, assumptions, symbols, and institutionalized routines that signal organizational commitment to ecological responsibility. Recent research emphasizes that GOCL embodies a contemporary environmental ideology grounded in ethical, social, and scientific considerations, shaping firms’ approach to sustainable economic, social, and environmental development [64]. The emergence of such a culture is often reinforced by corporate social responsibility (CSR) initiatives and stakeholder pressures, which influence consumer behavior, regulatory compliance, and ultimately organizational legitimacy. Embedding GOCL into core organizational philosophy fosters employee participation, knowledge sharing, and collaborative innovation, further strengthening sustainability outcomes [65].

From a theoretical standpoint, organizational culture is an intangible, rare, and inimitable resource, consistent with resource-based and capability-driven perspectives [66]. GOCL is particularly critical for green innovation, as it establishes the contextual environment within which environmentally oriented processes, products, and technologies emerge [67]. Firms with strong green cultures formalize sustainability objectives in their mission, vision, and operational policies, ensuring pro-environmental behaviors are continuously reinforced, monitored, and rewarded. This systematic cultural embedding helps organizations translate green strategies into tangible sustainability performance outcomes [68].

In emerging economies such as Ethiopia, GOCL is highly relevant. Firms in the textile and garment sector face water scarcity, chemical pollution, outdated technologies, and pressures from global buyers to meet sustainability standards. Cultivating a green culture under these conditions enables organizations to enhance operational efficiency, reduce costs, improve employee satisfaction, foster collaboration, and maintain competitive advantage while meeting global sustainability expectations [69]. The development of GOCL in Ethiopian manufacturing firms is therefore both a strategic necessity and a practical mechanism for integrating international sustainability standards into daily operations.

Based on this integrated theoretical and contextual reasoning, we posit that GOCL functions as a critical driver of sustainable performance in the Ethiopian textile and garment sector.

H5. 

GOCL positively and significantly affects SUP (Figure 1).

2.2.6. GI and GOCL Mediate the Link Between GHRM and SUP

Green Human Resource Management (GHRM) is widely recognized as a strategic driver of sustainable performance (SUP), encompassing environmental, social, and economic outcomes. Recent studies highlight that the effectiveness of GHRM is significantly amplified when mediated by green innovation (GI) and green organizational culture (GOCL), which serve as internal capability-building mechanisms translating HR practices into measurable sustainability outcomes [70]. GHRM enhances employees’ environmental knowledge, cultivates green competencies, and strengthens their ability to engage in eco-innovative initiatives. By embedding sustainability into recruitment, training, performance management, and reward systems, GHRM equips employees with the ability, motivation, and opportunity (AMO) to generate innovative solutions that reduce ecological impact, improve operational efficiency, and enhance overall firm-level sustainability performance [71].

Empirical research supports this mediated relationship, although most evidence is drawn from contexts with well-developed institutional and technological infrastructures. For example, studies in Malaysia show that GHRM positively influences GI, which in turn enhances environmental performance, with GI fully mediating the GHRM–performance linkage [72]. Similarly, research in Saudi Arabia demonstrates that GI extends its impact beyond environmental outcomes to include social and economic dimensions, collectively improving SUP [73]. However, these studies largely reflect contexts with robust regulations, advanced technology, and skilled workforces, conditions that differ significantly from low-income, resource-constrained settings such as Ethiopia.

In the Ethiopian textile and garment industry, the mediating role of GI and GOCL is particularly critical. Firms face severe environmental challenges, including water scarcity, inefficient waste management, limited technological adoption, and growing pressure from global buyers to meet sustainability standards. In such settings, GHRM alone may not suffice to achieve meaningful sustainability gains. Developing GI capabilities allows employees to translate green knowledge into actionable innovations, including eco-efficient processes, green products, and resource-saving operational practices [74]. Simultaneously, cultivating a GOCL aligns employees’ attitudes, values, and behaviors with organizational sustainability objectives, embedding environmentally responsible practices into the firm’s routines, decision-making processes, and social norms [27].

A strong GOCL acts as both a cognitive and social mechanism, fostering coordinated pro-environmental behaviors, prioritization of ecological objectives over short-term profit motives, and continuous improvement in sustainability practices. This is especially vital in emerging economies like Ethiopia, where institutional support for sustainability remains limited, making internal cultural alignment a key driver of effective green outcomes [75].

Integrating these theoretical and contextual insights, GI and GOCL are identified as essential mediators that transform GHRM practices into enhanced SUP. This perspective advances the Resource-Based View (RBV) by demonstrating that human and organizational capabilities function as strategic assets in resource-constrained environments. Moreover, it introduces a novel context-specific contribution: in Ethiopia, GHRM’s effectiveness is contingent upon its simultaneous capacity to foster innovation and institutionalize eco-values within organizational culture, providing a pathway for emerging-economy firms to achieve sustainable competitiveness.

Additionally, the conceptual model (Figure 1) distinguishes between direct and indirect effects. The direct effect captures the immediate influence of GHRM practices on SUP, reflecting operational and behavioral improvements induced by HR interventions. The indirect effects occur through GI and GOCL, which serve as mediating mechanisms translating HR practices into measurable environmental, social, and economic outcomes. Clarifying these pathways highlights that GHRM contributes to SUP both directly and by building internal green capabilities, particularly relevant in the resource-constrained Ethiopian textile and garment context.

Accordingly, the following hypotheses are proposed:

H6. 

GI mediates the association between GHRM activities and SUP (Figure 1).

H7. 

GOCL mediates the connection between GHRM practices and SUP (Figure 1).

3. Materials and Methods

3.1. Sampling Procedure and Data Gathering

This study employed a quantitative research design using a structured questionnaire to collect primary data from the garment and textile manufacturing sector located in Ethiopian industrial parks. The target population consisted of managers and technical experts across lower-, middle-, and upper-level management positions who were directly involved in human resource management, innovation activities, and sustainability-related decision-making. Operational-level employees were excluded because they typically have limited exposure to strategic HR systems, organizational culture formation, and innovation processes that are central to the constructs examined in this study.

A purposive sampling technique was adopted to ensure that respondents possessed adequate knowledge and experience relevant to Green Human Resource Management (GHRM), green innovation (GI), green organizational culture (GOCL), and sustainable performance. To qualify for inclusion, respondents were required to have a minimum of two years of experience in their current managerial or expert role. Although purposive sampling may introduce selection bias, this risk was mitigated by including respondents from multiple hierarchical levels, functional areas, and firms across different industrial parks, thereby enhancing the diversity and representativeness of perspectives within the sector.

Data collection initially targeted 550 respondents. A total of 460 questionnaires were returned, yielding a response rate of 83.6%. Fourteen questionnaires were excluded due to missing data, inconsistent responses, or patterned answering, resulting in a final sample of 446 valid responses used for analysis. These exclusion criteria were applied to ensure data quality, reliability, and internal consistency. Fieldwork was conducted between June 2021 and April 2022, a period marked by heightened regulatory attention to environmental compliance, labor standards, and sustainability-oriented management practices in Ethiopia’s manufacturing sector. The timing of data collection therefore captures organizational responses to contemporary sustainability pressures rather than transient or crisis-driven effects. The study covered major industrial hubs and regional production centers. Addis Ababa and Dire Dawa were selected due to their high concentration of textile and apparel firms and their strategic importance as national industrial centers. In addition, industrial parks located in the Tigray, Amhara, and Sidama regions were included because of their substantial contribution to national textile production and employment. While firms across these locations operate under similar national industrial policies, differences in infrastructure availability, workforce capacity, and regulatory enforcement were considered when interpreting the findings.

Prior to the main survey, a pilot study was conducted to assess the clarity, reliability, and contextual relevance of the measurement instrument. Feedback from the pilot resulted in minor refinements to item wording and survey structure to improve respondent comprehension and reduce ambiguity.

3.2. Variable Measurement

The study assessed the validity and reliability of all constructs using established multi-item measurement scales adapted from prior empirical research. All items were measured using a five-point Likert-type scale ranging from 1 (“strongly disagree”) to 5 (“strongly agree”), with higher values indicating stronger agreement with the statements. The questionnaire was administered in English, which is the official working language of Ethiopian industrial parks, and was pilot tested to ensure clarity, contextual relevance, and comprehension among respondents.

3.2.1. Sustainable Organizational Performance

Sustainable organizational performance was operationalized as a multidimensional construct encompassing environmental, economic, and social performance, in line with the triple-bottom-line perspective widely adopted in sustainability research. Nine measurement items were adapted from established studies [9,76], with three items capturing each performance dimension. Environmental performance items assessed the extent to which organizations reduce environmental impacts through practices such as minimizing waste, emissions, and resource consumption. Economic performance reflected improvements in cost efficiency, productivity, and long-term financial viability associated with sustainability-oriented initiatives. Social performance items captured organizational efforts to enhance employee well-being, workplace safety, and broader social responsibility. All items were combined to form an overall SOP construct, enabling the study to assess integrated sustainability outcomes at the organizational level rather than examining environmental, economic, and social indicators in isolation.

3.2.2. GHRM

Green human resource management was measured using five items adapted from established GHRM scales [77,78], reflecting the extent to which environmental considerations are embedded in core HR practices. The items captured key HR functions, including green recruitment and selection, environmental training, performance appraisal, rewards linked to environmental goals, and employee involvement in green initiatives. Sample items included statements such as “Environmental criteria are considered when hiring new employees” and “Employees receive training related to environmental protection and sustainability.” The scale captures GHRM as a system of practices rather than isolated HR activities, consistent with the study’s capability-based perspective.

3.2.3. Green Innovation

Green innovation was included as a mediating variable and measured using six items adapted from prior research [79]. The scale captured both process- and practice-oriented innovation, reflecting improvements that reduce environmental impact while supporting operational efficiency. Example items included “Our firm has introduced environmentally friendly production processes” and “We actively develop new methods to reduce energy and material consumption.” These items assess the extent to which firms translate sustainability intentions into tangible innovation outcomes, aligning with the study’s focus on capability-building mechanisms.

3.2.4. Green Organizational Culture

Green organizational culture was also modeled as a mediating construct and measured using four items adapted from prior studies [54,80]. The items assessed the degree to which environmental values, norms, and shared beliefs are embedded in organizational routines and employee behavior. Sample statements included “Environmental sustainability is a core value shared by employees in this organization” and “Managers consistently encourage environmentally responsible behavior.” This scale captures culture as a collective, organization-wide phenomenon rather than individual attitudes, consistent with its theorization in the conceptual model.

3.3. Data Analysis Approach

To examine the hypothesized relationships among green human resource management (GHRM), green innovation (GI), green organizational culture (GOCL), and sustainable performance (SUP), this study employed Partial Least Squares Structural Equation Modeling (PLS-SEM), a variance-based approach widely used in sustainability and human resource management research for analyzing complex models with latent constructs [81].

PLS-SEM was selected over covariance-based SEM (CB-SEM) for three model-specific reasons. First, the primary objective of the study is predictive and explanatory—namely, to assess how GHRM contributes to sustainable performance through innovation- and culture-based capabilities rather than to confirm a well-established theory, which aligns with the strengths of PLS-SEM [81,82]. Second, the conceptual model includes multiple parallel mediating paths (GHRM → GI → SUP; GHRM → GOCL → SUP), which PLS-SEM is particularly well suited to estimate efficiently and robustly [82]. Third, PLS-SEM is appropriate for empirical contexts characterized by emerging economies and industrial settings where mild deviations from multivariate normality are common [83].

The analysis was conducted using SmartPLS software 3.2.8, a widely accepted tool for PLS-SEM applications in sustainability and HRM studies [84]. Following established methodological guidelines, the analysis proceeded in two stages. First, the measurement model was evaluated by examining indicator loadings, internal consistency reliability (Cronbach’s alpha and composite reliability), convergent validity using average variance extracted (AVE), and discriminant validity assessed through the heterotrait–monotrait (HTMT) ratio [85]. Second, the structural model was assessed by estimating path coefficients, significance levels obtained through a bootstrapping procedure with 5000 resamples, coefficients of determination (R²), predictive relevance (Q²), and variance inflation factors (VIF) to check for multicollinearity [86].

Mediation effects were tested using a bootstrapping-based indirect effects approach, which allows for robust inference without assuming normality of the sampling distribution of indirect effects [87]. This procedure enabled the simultaneous examination of direct and indirect relationships within the proposed capability-based framework.

To enhance clarity and conciseness, general methodological explanations not directly related to the specific analytical requirements of the proposed model were intentionally minimized, consistent with best practices for reporting SEM results in applied sustainability research. Overall, this analytical strategy ensured rigorous yet parsimonious testing of the hypothesized relationships, generating empirically grounded insights into how GHRM-driven capabilities influence sustainable performance in Ethiopia’s textile and apparel manufacturing sector.

4. Results

4.1. Assessment of Demographic Factors

Descriptive statistics were generated using SPSS software version 25 to summarize the demographic characteristics of the respondents. The frequency and percentage distributions for gender, age, educational qualification, and work experience are presented in

Table 1. Demographic Characteristics.

Variable	Category	Frequency	Percentage
Gender	Male	258	57.8
	Female	188	42.2
	Total	446	100.0
Age	18–30	338	75.8
	31–45	76	17.0
	46 and above	32	7.2
	Total	446	100.0
Educational Qualification	BA/BSC	424	95.1
	PhD	22	4.9
	Total	446	100.0
Work Experience	0–2 years	348	78.0
	3–5 years	98	22.0
	Total	446	100.0

. As shown in Table 1, the sample consisted of 446 respondents, of whom 57.8% were male and 42.2% were female. The majority of respondents (75.8%) were between 18 and 30 years of age, followed by 17.0% aged 31–45 and 7.2% aged 46 and above. Regarding educational qualifications, 95.1% of respondents held a bachelor’s degree, while 4.9% held a doctoral degree. In terms of work experience, 78.0% of respondents reported having 0–2 years of experience, and 22.0% reported 3–5 years of experience. The demographic variables were used solely for descriptive purposes to characterize the sample and were not included as control variables in the structural model.

4.2. Measurement Model Assessment

This study employed quantitative research design, utilizing a structured questionnaire to collect data from participants. The constructs examined include Green Human Resource Management (GHRM), Green Innovation (GI), Green Organizational Culture (GOCL), and Sustainable Organizational Performance (SUP). To assess the measurement properties of the constructs, Partial Least Squares Structural Equation Modeling (PLS-SEM) was applied using SmartPLS software, beginning with an evaluation of the outer (measurement) model.

Internal consistency reliability was evaluated using Cronbach’s alpha (α) and composite reliability (CR) [86]. Cronbach’s alpha assesses the consistency among items measuring the same construct, while CR accounts for standardized loadings to evaluate latent construct reliability. Threshold values of 0.70 for Cronbach’s alpha and values between 0.70 and 0.95 for CR are widely accepted indicators of satisfactory reliability [87]. As reported in

Table 2. Construct reliability and validity.

Constructs	Items	Factor Loading	Cronbach’s Alpha	Rho_A	Composite Reliability	Average Variance Extracted
GHRM	GHR1	0.866	0.922	0.926	0.936	0.647
	GHR2	0.78
	GHR3	0.717
	GHR4	0.821
	GHR5	0.824
	GHR6	0.845
	GHR7	0.791
	GHR8	0.783
GI			0.844	0.846	0.882	0.515
	PC1	0.728
	PC2	0.694
	PC3	0.733
	PC4	0.71
	PD1	0.718
	PD2	0.739
	PD3	0.702
GOCL			0.848	0.882	0.898	0.689
	GOCL1	0.857
	GOCL2	0.871
	GOCL3	0.89
	GOCL4	0.685
SUP			0.906	0.912	0.921	0.508
	ECP1	0.568
	ECP2	0.624
	ECP3	0.698
	ECP4	0.657
	EVP1	0.762
	EVP2	0.751
	EVP3	0.721
	EVP4	0.75
	EVP5	0.761
	SOP1	0.767
	SOP2	0.695
	SOP3	0.735
	SOP4	0.749

, Cronbach’s alpha and CR values for all constructs exceeded the recommended thresholds.

Convergent validity was assessed using indicator loadings and average variance extracted (AVE) [86]. Indicator loadings ranged from 0.568 to 0.890, meeting the minimum acceptable criterion of 0.50 for applied PLS-SEM research. All constructs also demonstrated AVE values above 0.50, indicating that a substantial proportion of variance in the indicators is explained by the latent constructs [87]. Although a few indicators for sustainable organizational performance exhibited loadings near the lower bound of acceptability (minimum = 0.568), all other indicators had strong loadings (maximum = 0.890). Consistent with established PLS-SEM guidelines, indicators with loadings between 0.40 and 0.70 may be retained when they contribute to content validity and when construct-level reliability and convergent validity criteria are met [81]. In this study, these indicators were theoretically important for capturing the multidimensional nature of sustainable organizational performance, encompassing environmental, economic, and social outcomes. Retaining them ensures content validity while preserving the overall integrity of the measurement model.

Discriminant validity was evaluated using the Heterotrait–Monotrait (HTMT) ratio of correlations, which is recommended for assessing construct distinctiveness in PLS-SEM [88]. HTMT values below 0.90 indicate sufficient discriminant validity. All HTMT values reported in the analysis were below this threshold, indicating adequate distinction among the constructs.

The Heterotrait–Monotrait (HTMT) ratio of correlations was employed as a robust criterion to assess discriminant validity of the constructs (

Table 3. Discriminant validity (HTMT) /.

Constructs	GHRM	GI	GM	SUP
GHRM
GI	0.508
GOCL	0.506	0.812
SUP	0.895	0.731	0.812

) [88]. Although the Fornell–Larcker criterion is commonly used and can be effective in certain situations, recent research highlights that HTMT provides a more reliable assessment of discriminant validity in PLS-SEM models [89]. Discriminant validity is considered adequate when HTMT values are below 0.90. As shown in Table 3, all HTMT values for the constructs are below the threshold of 0.90, indicating that each construct measures a distinct concept and confirming discriminant validity in the measurement model.

4.3. Structural Model Assessment

Following the evaluation of the measurement model, the structural (inner) model was assessed to examine the hypothesized relationships among GHRM, green innovation (GI), green organizational culture (GOCL), and sustainable organizational performance (SUP). Path coefficients, t-values, and standard errors were derived using SmartPLS bootstrapping with 5000 resamples to determine the statistical significance of each hypothesized relationship.

To evaluate the explanatory and predictive capabilities of the model, R² (coefficient of determination) and Q² (predictive relevance) were calculated. R² values indicate the proportion of variance in endogenous constructs explained by exogenous constructs, while Q² values, computed using the blindfolding procedure, assess the predictive relevance of the model, with values greater than zero indicating meaningful predictive capacity [90]. Variance Inflation Factor (VIF) values were also calculated to check for collinearity; all values were below the recommended threshold of 3.3, confirming that multicollinearity does not bias the path coefficients [91].

Although the R² values indicate a moderate proportion of variance explained in GI and GOCL and a substantial proportion in SUP, no qualitative descriptors (e.g., “moderate” or “substantial”) are interpreted beyond reporting the numerical values, in line with standard result-reporting conventions. Similarly, Q² values above zero confirm the model’s predictive relevance without further interpretive statements, the details are presented in

Table 4. Structural model result.

Constructs	R2	Q2	VIF
GHRM			1.337
GI	0.208	0.104	2.045
GOCL	0.22	0.146	2.076
SUP	0.918	0.431

.

4.4. Model Fit

To assess global model adequacy, the standardized root mean square residual (SRMR) was examined. The SRMR value for the proposed PLS-SEM model is 0.0946, which is below the commonly accepted threshold of 0.10, indicating an acceptable overall model fit. Prior methodological research suggests that SRMR values below 0.08 reflect a good model fit, while values below 0.10 are considered acceptable in PLS-SEM applications [90]. Therefore, the reported SRMR supports the adequacy of the global model fit in this study (Figure 2).

4.5. Hypothesis Testing

The structural (inner) model was evaluated using SmartPLS 3.2.8 with bootstrapping of 5000 resamples. Path coefficients (β), standard errors (S.D.), p-values, and 95% biased-corrected confidence intervals (BCI LL and BCI UL) were calculated for all hypothesized relationships. Hypotheses were considered supported when t > 1.96 and p < 0.05.

Table 5. Results of Hypothesis testing.

Hypothesis	Path	β Value	S.D.	p-Values	BCI LL	BCI UL	Conclusion
H1	GHRM → SUP	0.715	0.026	0.000	0.662	0.764	Accepted
H2	GHRM → GI	0.456	0.046	0.000	0.359	0.538	Accepted
H3	GHRM → GC	0.469	0.047	0.000	0.369	0.553	Accepted
H4	GI → SUP	0.094	0.021	0.000	0.053	0.138	Accepted
H5	GOCL → SUP	0.304	0.028	0.000	0.252	0.36	Accepted

BCI LL: Biased corrected interval lower limit; BCI UL: Biased corrected interval upper limit.

presents the results of hypothesis testing. The analysis shows that Green Human Resource Management (GHRM) has a positive and significant effect on sustainable organizational performance (SUP) (β = 0.715, S.D. = 0.026, p < 0.001, BCI LL = 0.662, BCI UL = 0.764), supporting H1. GHRM also significantly influences green innovation (GI) (β = 0.456, S.D. = 0.046, p < 0.001, BCI LL = 0.359, BCI UL = 0.538) and green organizational culture (GOCL) (β = 0.469, S.D. = 0.047, p < 0.001, BCI LL = 0.369, BCI UL = 0.553), confirming H2 and H3, respectively.

For the mediating constructs, GI has a significant positive effect on SUP (β = 0.094, S.D. = 0.021, p < 0.001, BCI LL = 0.053, BCI UL = 0.138), supporting H4, while GOCL also shows a significant influence on SUP (β = 0.304, S.D. = 0.028, p < 0.001, BCI LL = 0.252, BCI UL = 0.360), confirming H5. These results indicate that all hypothesized direct and indirect relationships are statistically significant. The findings are reported in full in Table 5, including path coefficients, standard errors, p-values, and confidence intervals for each tested hypothesis.

4.6. Mediation Analysis

Mediation was examined to determine whether green innovation (GI) and green organizational culture (GOCL) act as intervening variables in the relationship between GHRM and sustainable organizational performance (SUP). The analysis was conducted using SmartPLS bootstrapping with 5000 resamples. Direct, indirect, and total effects, along with their corresponding t-values, p-values, and 95% biased-corrected confidence intervals, were calculated for each hypothesized mediating pathway.

The results show that the total effect of GHRM on SUP is significant (β = 0.922, p < 0.001). The direct effect of GHRM on SUP remains significant (β = 0.78, p < 0.001). The indirect effects through GI (β = 0.043, p < 0.001, BCI LL = 0.025, BCI UL = 0.062) and GOCL (β = 0.143, p < 0.001, BCI LL = 0.112, BCI UL = 0.175) are also significant, with confidence intervals excluding zero, indicating that both GI and GOCL serve as significant mediators. Based on these values, partial mediation is observed, as the direct effect remains significant alongside the indirect effects. These results are summarized in

Table 6. Mediation analysis results for indirect effects.

The Total Effect of GHRM on SUP		Direct Effect of GHRM on SUP		Indirect Effect of GHRM on SUP						Conclusion
Coefficient	p Value	Coefficient	p Value	Hypothesis	Coefficient	S.D.	p Value	BCI LL	BCI UL
0.922	0.000	0.78	0.000	GHRM → GOCL→ SUP	0.143	0.02	0.000	0.104	0.184	Partial Mediation
				GHRM → GI → SUP	0.043	0.011	0.000	0.023	0.066	Partial Mediation

BCI LL: Biased corrected interval lower limit; BCI UL: Biased corrected interval upper limit.

, showing direct, indirect, and total effects, along with standard errors, p-values, and confidence intervals for the hypothesized mediation pathways.

5. Discussion

The analysis confirms that Green Human Resource Management (GHRM) practices significantly enhance sustainable organizational performance (SUP), supporting H1. This finding aligns with prior studies [92] and recent evidence [2,93] demonstrating that embedding sustainability into HR processes improves employee engagement, accountability, and operational efficiency while supporting environmental and social responsibilities. Compared to earlier studies in developed economies [94], our results show that the effect of GHRM on SUP remains robust even under the resource constraints typical of emerging economies. In emerging economies like Ethiopia, firms face pressures from regulators, international buyers, and local communities. These contextual factors make the integration of sustainability into recruitment, training, performance management, and reward systems critical for operationalizing environmental, social, and economic objectives. These findings reinforce the RBV perspective, highlighting that human resources constitute strategic capabilities driving sustainability outcomes in resource-constrained environments.

GHRM also exerts a positive and significant effect on green innovation (GI), supporting H2, consistent with [95] and recent meta-analytic evidence [10]. In comparison with prior research [10], which emphasized the role of innovation primarily in developed economies, our findings highlight that in emerging economies, GHRM-driven innovation contributes to process optimization, waste reduction, eco-friendly product development, and operational agility, even under limited technological infrastructure and institutional support. This supports NRBV predictions regarding the strategic value of ecological capabilities and emphasizes the capability-based pathway through which HR practices systematically foster environmental and operational sustainability.

Similarly, the relationship between GHRM and green organizational culture (GOCL) is positive and significant, supporting H3. Prior studies [96] indicate that HR practices shape employees’ environmental attitudes, beliefs, and behaviors. Our findings extend this literature by showing that in contexts with emerging sustainability awareness, GHRM is pivotal for embedding environmental values and aligning organizational culture with AMO principles, thereby creating a workforce capable of sustaining eco-friendly behaviors over time. Compared to [97], which documented cultural alignment in established firms, our results highlight that even nascent green cultures benefit significantly from targeted HR interventions.

The direct effects of GI (H4) and GOCL (H5) on SUP were significant. These results confirm that innovation and culture act as mechanisms translating HRM practices into tangible environmental, social, and economic outcomes [96]. The partial mediation observed for GI and GOCL suggests that GHRM alone is insufficient to achieve optimal sustainability; complementary organizational innovation capabilities and cultural alignment are necessary to translate HR practices into measurable sustainable performance. This explanation clarifies why mediation is partial: other organizational and contextual factors contribute alongside GHRM. This insight extends prior studies by quantifying the magnitude of indirect effects in a resource-constrained, emerging economy setting.

Overall, the results demonstrate that GHRM functions as a strategic driver of sustainability, while GI and GOCL act as capability-based amplifiers, reinforcing integration across environmental, social, and economic performance objectives. Compared with previous research [97], our study provides stronger analytical evidence that these interdependent mechanisms operate effectively even in emerging economies. This integrated approach provides empirical support for RBV, NRBV, and AMO, showing that interdependent human and organizational resources are essential for achieving long-term sustainable outcomes. Recent evidence further supports this integrated mechanism, highlighting that green HRM strengthens organizational agility and green culture, which in turn enhances firm-level sustainability outcomes.

5.1. Theoretical Implications

This study contributes to theory by providing a comprehensive, integrated framework linking GHRM, GI, GOCL, and sustainable organizational performance in a resource-constrained context. Unlike prior research that often examines these constructs separately, the current study demonstrates that HR practices, organizational culture, and innovation collectively operate as strategic, capability-based resources that generate measurable sustainability outcomes. Specifically, the findings advance RBV and NRBV by illustrating that human and organizational resources—when aligned with environmental goals—constitute rare, valuable, and inimitable assets that drive sustainable performance in emerging economies. GHRM practices enhance employee skills, motivation, and opportunities (AMO), which in turn support innovation and culture, embedding sustainability into organizational routines. This study also shows how partial mediation highlights the necessity of integrated mechanisms, providing a more nuanced understanding of how GHRM translates into sustainable organizational performance in contexts with limited institutional support.

The mediating roles of GI and GOCL provide new theoretical insights by clarifying the mechanisms through which GHRM translates into sustainable organizational outcomes. This represents a conceptual advancement, particularly in emerging markets where internal capabilities are critical to overcoming institutional voids. Furthermore, our findings extend RBV and NRBV by demonstrating that combined human and organizational capabilities are critical for sustainability, offering empirical support that green HRM initiatives, complemented by innovation and cultural reinforcement, can systematically enhance environmental, social, and economic performance even in resource-constrained settings [97]. By contextualizing these relationships in Ethiopia, the study demonstrates that capability-based approaches to sustainability are transferable beyond developed countries. Firms can strategically leverage internal human and organizational resources to achieve long-term sustainability. This aligns with dynamic capabilities theory, emphasizing that sustainability-driven HRM, innovation, and culture constitute interdependent competencies that enable adaptive, environmentally responsible, and innovation-driven practices.

Finally, the study explicitly links GHRM, GI, and GOCL to sustainable organizational performance, providing a foundation for future research on integrated sustainability management in emerging economies. This conceptual framework advances theory by highlighting both the direct and indirect pathways through which green HRM contributes to environmental, social, and economic sustainability, thereby extending prior RBV/NRBV models with contextual specificity and actionable mechanisms

5.2. Managerial Implications

The findings provide actionable guidance for managers in Ethiopia’s garment and textile sector seeking to enhance sustainability outcomes. Managers should design HR interventions that explicitly integrate green recruitment, onboarding, continuous training, performance evaluation, and reward systems to strengthen employees’ eco-awareness, engagement, and innovation capabilities. Linking incentives and KPIs directly to sustainability objectives (e.g., energy efficiency, waste reduction, eco-innovation) reinforces alignment of individual behaviors with organizational green goals. For example, managers can introduce green bonus schemes, recognition programs for eco-friendly initiatives, and sustainability-linked performance appraisals to operationalize these objectives.

To foster green innovation, managers should invest in environmentally friendly technologies, encourage cross-functional collaboration, and implement structured ideation programs that reward eco-innovative solutions. Practical steps include establishing green innovation labs, organizing cross-department brainstorming sessions, and providing rewards or promotions for employees who develop environmentally beneficial processes or products.

Cultivating a green organizational culture requires leadership to model sustainable behaviors, communicate environmental priorities consistently, and embed sustainability into policies, mission, and vision. Specific actions include introducing eco-performance KPIs, regularly measuring sustainability-related employee engagement, aligning reward systems with green outcomes, and creating structured channels for sharing eco-knowledge across teams [97]. Managers can also run workshops, campaigns, or mentorship programs to reinforce green behaviors throughout the organization.

Integrating GHRM, GI, and GOCL strategically enhances operational efficiency, organizational competitiveness, and long-term sustainability while contributing to environmental preservation and social responsibility. In emerging economies like Ethiopia, these practices additionally support regulatory compliance, optimized resource utilization, and sustainable industrial growth, providing a competitive advantage in both local and global markets. Overall, this integrated framework provides managers with a practical roadmap for translating green HR practices into measurable, multi-dimensional sustainability outcomes, strengthening both theoretical understanding and applied contributions to sustainability management. By specifying actionable interventions, managers can directly implement strategies that produce tangible improvements in environmental, social, and economic performance.

5.3. Constraints and Prospective Research Paths

This study is subject to several limitations that should be acknowledged when interpreting the findings. First, the research focused exclusively on Ethiopian industrial parks within the garment and textile manufacturing sector, which limits the generalizability of the results to other industries, such as service, agricultural, or high-tech sectors. Future research should expand the conceptual framework to explore how GHRM, GI, and GOCL influence sustainable performance in non-manufacturing settings, allowing for broader comparative analyses across different economic sectors. Second, the study employed a cross-sectional design, capturing data at a single point in time. While this provides a snapshot of the relationships among GHRM, GI, GOCL, and SUP, it does not allow for observing temporal changes or causal dynamics. Future studies could employ longitudinal designs to examine how these practices evolve over time, particularly before and after implementing GHRM initiatives, providing deeper insights into the long-term effects on organizational sustainability. Third, this research primarily relied on quantitative survey data. While this approach is effective for testing hypothesized relationships, it may not fully capture the nuanced challenges, barriers, and employee perceptions associated with implementing green practices in emerging economies like Ethiopia. Future research could incorporate mixed-method approaches, including in-depth qualitative interviews with managers and employees across organizational levels. Such studies would uncover contextual factors, cultural nuances, and operational obstacles that affect the adoption of environmentally sustainable practices, thereby enhancing the practical applicability of findings. Finally, future investigations should consider cross-country comparative studies within emerging economies to examine how differing regulatory frameworks, market pressures, and cultural factors influence the effectiveness of GHRM, GI, and GOCL in achieving sustainable performance. This could provide actionable insights for policymakers, industry leaders, and academic researchers seeking to design tailored sustainability strategies for diverse developing-country contexts.

6. Conclusions

The accelerating global emphasis on environmental sustainability has shifted organizational engagement from reactive compliance toward the strategic orchestration of internal capabilities that integrate human resources, innovation, and organizational culture. This study demonstrates that Green Human Resource Management (GHRM) enhances sustainable performance (SUP) both directly and indirectly through complementary mediating mechanisms involving Green Innovation (GI) and Green Organizational Culture (GOCL). Unlike much of the prior literature, which examined the direct effects of GHRM or treated innovation and culture as isolated mechanisms, our findings show that sustainability outcomes are maximized when HR practices are embedded within innovation-oriented processes and culturally aligned routines, creating a synergistic effect on organizational performance.

The main contribution of this study to literature is twofold. First, it empirically validates a capability-based perspective, demonstrating that HR practices alone are insufficient to drive sustainability; their impact is amplified when interdependent mechanisms of innovation and culture are simultaneously engaged. Second, it refines the Resource-Based View (RBV) and the Natural Resource-Based View (NRBV) by specifying the mechanisms through which internal green capabilities generate sustainable competitive advantage, particularly in emerging economies where institutional support may be limited. By clarifying how GHRM interacts with internal innovation and cultural processes, the study advances theoretical understanding of how sustainability is operationalized within organizational routines rather than assumed to emerge from regulatory pressures alone.

The model is particularly applicable to emerging economies characterized by labor-intensive manufacturing, evolving regulatory regimes, and limited external support for sustainability. In such contexts, firms can strategically integrate GHRM, GI, and GOCL to enhance operational efficiency, competitiveness, and long-term sustainability. While the framework may also provide insights for other contexts, its effectiveness depends on specific organizational and institutional conditions, such as technological infrastructure, regulatory maturity, and organizational scale. This contextual clarification provides a bounded and theoretically grounded basis for future comparative research.

Overall, this study offers a theoretically robust and context-sensitive framework for translating internal capabilities into measurable sustainability outcomes. By demonstrating the dual and complementary mediating roles of innovation and culture, it shows that sustainable performance is maximized when HR practices, green innovation, and organizational culture are strategically integrated. These insights offer actionable guidance for managers seeking to embed sustainability into daily operations, and for policymakers and industry stakeholders aiming to support firm-level capability development. Ultimately, the research provides a process-oriented and empirically validated pathway for balancing industrial growth with environmental and social stewardship.