The Moderating Role of Organizational Culture on Barriers and Drivers of Sustainable Construction Practices in Saudi Arabia’s Construction Industry: A Circular Economy Perspective

Abstract

The linear construction model is characterized by resource-intensive processes that generate significant waste, whereas adopting circular economy principles facilitates sustainable, adaptable, and recyclable building practices to mitigate waste and conserve resources. The primary objective of this study is to empirically analyze the impact of barriers and drivers on sustainable construction practices and to evaluate the role of organizational culture in moderating this relationship. This study, grounded in Circular Economy theory, distributed 210 questionnaires using simple random sampling to large contractors (501–3000 employees) in Saudi Arabia’s Eastern Region, yielding 154 acceptable responses and a 73% completion rate. Data analysis was conducted using SmartPLS software, revealing that barriers, drivers and organizational culture positively impact sustainable construction practices, with organizational culture also positively moderating the connection among drivers and sustainable construction practices. However, organizational culture was not observed to substantially influence the connection between barriers and sustainable practices. The results highlight the main contribution of organizational culture in supporting sustainable development, offering significant theoretical contributions and practical implications for industry leaders and policymakers to develop regulatory framework and implement strategies that support sustainability.

1. Introduction

A linear model typically involves the traditional approach of extracting raw materials, constructing buildings, and then demolishing or discarding components at the end of their life cycle, leading to significant waste and resource depletion [1]. In contrast, principles of circular economy are incorporated into sustainable construction, which focus on designing buildings for longevity, adaptability, and reuse, utilizing recycled or renewable materials, and implementing modular designs that facilitate disassembly and material recovery [2]. Being the largest nation in the Gulf Cooperation Council, Saudi Arabia has focused on transforming its economy through the “Vision 2030” initiative to reduce dependence on oil revenues [3]. The plan intends to significantly reshape the nation’s economy by implementing infrastructure initiatives, including transportation networks, airports, and urban expansion, with the goal of reducing reliance on oil, attracting investment and enhancing sustainable development [4]. Despite efforts to improve recycling, ongoing resource consumption and extraction challenges hinder sustainable management, highlighting the need of developing strategies that support resource conservation and environmental protection [5].

The circular economy is regarded as a progressive and innovative framework in construction that promotes sustainable development. Shifting beyond the conventional linear approach, the concept of circularity highlights the significance of resource efficiency through practices (e.g., reuse, recycling, and material regeneration) [6]. This shift promotes a sustainable construction process by reducing environmental impact, conserving natural resources and fostering economic resilience [7]. In the industry, as awareness of environmental challenges grows, integrating circular economy principles is increasingly being recognized for achieving long-term economic sustainability [8]. Saudi Arabia’s rapid industrial growth over the last four decades has severely impacted the environment, exposing the unsustainability of its current economic model [9]. Saudi Arabia’s rapid urban development and infrastructure projects have contributed to a surge in construction and demolition debris [10]. Various nations continue to rely on a “take–use–dispose” model, which contributes to environmental degradation and resource depletion [11].

Circular economy focuses on reuse and resource efficiency to reduce waste and environmental impact while promoting economic resilience [12]. It is rooted in the understanding that Earth’s resources are finite and require sustainable practices to balance economic growth with environmental preservation within a closed system [13]. The construction sector has traditionally been marked by linear model, exhibiting slower adoption of innovative practices compared to other sectors [14]. Circular economy aims to facilities the continuous use of materials, supporting their longer lifespan and reducing wastage [15]. In the development and infrastructure industry, enforcing circular economy techniques is important, which deals with serious issues related to environmental impact, high waste levels and resource depletion, making it a critical strategy for promoting sustainability, conserving resources, and minimizing ecological harm through innovative design, reuse, and recycling practices [16]. The construction sector’s unwillingness to adapt to evolving trends, coupled with project complexity and limited digital integration, presents significant barriers to effectively employing Circular Economy principles [17]. As a result, the construction sector requires collaboration, innovation, and systemic change to adopt sustainable, resource-efficient practices and overcome industry fragmentation [16].

Alotaibi et al. [18] find that increasing awareness, establishing supportive regulations, advancing technology, and highlighting environmental and socio-economic benefits are essential drivers for effectively integrating circular economy trends into Saudi Arabia’s projects. AlJaber et al. [19] reveal that limited awareness and lower incorporation of circular economy trends in Saudi Arabia’s development industry are major barriers, highlighting the need of implementing financial incentives and supportive policies to assist integration. Alotaibi et al. [20] develop a validated five-level framework, based on key enablers clustered into strategic categories, to guide the effective execution of sustainable strategies in Saudi Arabia’s projects. Akinwale et al. [21] highlight that although awareness of circular economy benefits is high among Saudi micro, small, and medium companies, actual implementation remains limited, but key factors such as employee training, financial resources, and management commitment can significantly improve their financial performance. Implementing circularity in construction encounters substantial obstacles such as elevated costs, restrictions in material availability, and regulatory constraints, all of which collectively impede the achievement of sustainable outcomes [22].

Organizational culture substantially influences a firm’s capability to collect, analyze and apply specialized knowledge by shaping attitudes toward learning, innovation, and knowledge sharing [23]. The globalization of the construction sector brings attention to the cohesive and adaptable organizational culture to facilitate international collaboration, communication, and innovation across diverse environments [24].

Although sustainable construction is highly valued in Saudi Arabia, its widespread implementation is constrained by various barriers and drivers. These barriers and drivers in construction significantly impact the effectiveness of sustainable techniques and methods. Furthermore, organizational culture’s role in shaping sustainable practices remains underexplored, despite the construction industry’s vital role in achieving Saudi Vision 2030. However, there is need to explore the influence of barriers and drivers moderated by organizational culture on sustainable construction practice, which can function to either restrict or support the adoption of sustainability in the building and infrastructure development process. The core problem is the insufficient awareness of the function of organizational culture in shaping the connection among barriers, drivers, and sustainable construction practices of Saudi Arabian construction sector, which this study will address.

To achieve this, the research questions are formulated as follows.

• RQ1: How do barriers, drivers, and organizational culture directly influence sustainable construction practices among large contractors in the Eastern Region of Saudi Arabia?
• RQ2: How does the presence of organizational culture modify the relationship between barriers and sustainable construction practices?
• RQ3: How does the presence of organizational culture modify the relationship between drivers and sustainable construction practices?

Based on our current understanding, this is the first empirical study to test this moderating effect within the Saudi construction industry.

1.1. Literature Review

1.1.1. Overview of Saudi Arabia

Saudi Arabia, the foremost economic leader in Gulf Cooperation Council and ranked within the top twenty economies worldwide., is strategically pursuing economic diversification through comprehensive reforms under initiatives like Vision 2030, seeking to shift away from oil dependency and support sustainable progress across various sectors [25]. Saudi Arabia, as a founding OPEC member and key G20 participant, significantly influences global energy markets and economic strategies [26]. As a result of swift urbanization and industrial growth, Saudi Arabia is witnessing a significant increase in waste generation, reaching around 15 million tons each year [27]. Adopting circular economy practices is vital for the Saudi Arabian infrastructure and development sector to enhance sustainability, reduce environmental impact, and, resilient growth amidst rapid sector expansion [28].

1.1.2. Barriers in Sustainable Construction

Adams et al. [29] highlighted the primary challenges to adopting the circular economy in construction are insufficient motivation to consider end-of-life aspects, weak market systems for material recovery, disjointed supply chains, and the intricate nature of building designs. The key obstacles to adopting sustainability include a limited understanding of its advantages, poor cooperation among stakeholders, and the absence of a structured framework, all of which hinder the successful incorporation of sustainability practices [30]. Omopariola et al. [31] highlight that advancing sustainable construction is hindered by data gaps, insufficient trained professionals, financial and policy limitations, low awareness, and technical skill shortages. Osei-Tutu et al. [32] identify several key barriers to sustainable construction, including low levels of awareness, industry reluctance, unclear standards, higher expenses, and perceptions of inferior material quality, all of which substantially affect the widespread enforcement and progress of sustainable practices.

Wuni [17] underscores that the primary challenges to integrating the circular economy as substantial upfront expenses, a deficit in technical skills, weak regulatory frameworks, limited awareness among stakeholders, inadequate government support and financial backing, poor stakeholder cooperation, insufficient leadership commitment, and insufficient capital and technological resources essential for successful implementation. As outlined by Ding et al. [33], the transitioning into a circular economy framework faces several significant barriers, such as elevated operational expenses, inadequate logistics for waste collection and residue handling, deficiencies in technological infrastructure and innovation, reduced market competitiveness of recycled products, and the absence of effective marketing strategies to promote sustainability. Shooshtarian et al. [34] identify that the main obstacles to adopting sustainable practices include limited incentives, regulatory challenges, limited access to technical expertise, inadequate stakeholder collaboration, low awareness levels, time constraints, complex technical requirements, and substantial implementation costs.

The progression of a circular economy is significantly hindered by an interplay of technological, market, institutional, and cultural barriers, which collectively restrict innovation, weaken market incentives, impede the development of supportive legal frameworks, and constrain societal acceptance, thereby posing substantial challenges to its widespread implementation [35]. Oluleye et al. [36] delineate several pivotal barriers obstructing integration of circular economy principles, encompassing institutional and regulatory shortcomings, technological and informational deficiencies, organizational fragmentation, resistance to behavioral change, infrastructural constraints, economic and market limitations and lack of integrated frameworks to facilitate seamless integration. The primary constraints to enforcing circular economy methods and techniques in the building and infrastructure development sector are economic risk, further exacerbated by shortages of qualified personnel, insufficient recycling infrastructure, and low acceptance of CE-friendly materials, all of which reduce companies’ willingness to invest in sustainable technologies and reuse strategies [37]. Charef et al. [38] highlighted that the circular economy’s primary barriers are limited awareness and acceptance of deconstruction, cultural resistance to reclaimed materials, financial and site-related challenges, inadequate infrastructure and markets for salvaged materials, and the need for cost-effective recycling solutions.

Ahmed et al. [39] emphasize that the implemented sustainable practices are impeded by insufficient limited awareness and understanding of innovative techniques, green building regulations, challenges in developing the necessary skills among industry professionals, and limited investment and funding within the local market. Takacs et al. [40] highlight that both internal barriers (risk aversion, economic decision-making and resource limitations), and external barriers (technological issues and market volatility), collectively impede an organization’s capacity to expand and adapt in rapidly and effectively changing environment. Chigozie Osuizugbo et al. [41] highlight several major challenges to advancing sustainable construction in the industry, such as limited government support, insufficient legal and policy frameworks to promote sustainability, reduced client interest, a lack of awareness about sustainable methods, and concerns over the costs associated with adopting environmentally friendly building practices. Ametepey et al. [42] highlighted that the widespread adoption of sustainability faces several significant challenges, such as cultural resistance to change, insufficient engagement and support from governmental authorities, concerns over elevated initial investment costs, a shortage of specialized expertise among industry practitioners, and the lack of comprehensive legislative frameworks to facilitate sustainable practices.

Table 1. Major Barriers in Sustainable Construction.

Barriers	Source
Limited awareness of the potential advantages	[30]
Absence of a structured, systematic approach to achieving sustainability objectives	[30]
Inadequate collaboration between practitioners, research institutions, and environmental organizations	[30]
Lower motivation for execution staff	[43]
Ineffective coordination between project requirements and procurement choices	[43]
Perception of high costs associated with sustainable solutions	[43]
Lack of essential personnel availability	[43]
Discrepancy between contractor’s goals and actions	[44,45]
Lack of ability to acquire internal support	[44]
Contractor’s opposition to implementing change	[46]
Challenges in addressing environmental concerns	[46]

outlines the key barriers in Saudi Arabia

1.1.3. Drivers in Sustainable Construction

Ojo et al. [47] illustrated that the successful implementing principles of circular economy depends on five vital factors: fostering a conducive ecosystem, securing commitment from management, accurately identifying valuable materials for reuse, establishing dedicated green teams, and utilizing intermediaries specializing in circular economy practices. Rizos and Bryhn [48] highlight that advancing the circular economy relies on several key factors, including establishing international forums for policy discussions and knowledge sharing, incorporating circular economy information into product labels, conducting awareness initiatives, allocating funding to research and development, encouraging knowledge exchange and business partnerships, offering financial incentives like tax breaks, and building technical skills within industries.

Torres-Guevara et al. [49] highlight that advancing sustainable construction requires several key elements, including establishing effective incentives and circular business models, promoting research, education, and the dissemination of knowledge, increasing stakeholder awareness, fostering collaboration and communication, implementing robust governance frameworks, and developing innovative tools and technologies to enable the construction of circular buildings. Ismail et al. [50] identify that the main factors driving sustainable construction include increased productivity, strict adherence to quality standards, environmental sustainability, compliance with safety and health regulations, enhanced constructability and design effectiveness, and conformity to relevant policies and regulations.

Piila et al. [51] suggest that enforcement of Circular Economy is largely driven by the strategic necessity to maximize resource efficiency and economic gains, fulfill corporate responsibility and sustainability commitments, respond to increasing consumer demand and global megatrends, and comply with evolving regulatory frameworks. de Jesus and Mendonça [52] identify several key drivers of the circular economy, including technological advancements that support resource efficiency, remanufacturing, by-product regeneration, and collaborative sharing solutions to enhance user experience, stricter regulations, higher industry standards, broader waste management policies, heightened environmental awareness, evolving consumer behaviors, and a transition from ownership to business models focused on service delivery. The progression of a circular economy is driven by the strategic alignment of policies with planning frameworks, environmental sustainability criteria and government procurement policies [53]. Peráček and Kašša [54] highlight that legal easement significantly contribute to the sustainability prospects of land and infrastructure in smart cities. Qurbani et al. [55] address that cooperation and legal resolutions promote sustainable practices through shared management and responsible resource regulation.

Sharma et al. [56] underscore several major challenges to implementing the circular economy to advance sustainability in construction practices such as gaps in expertise, difficulties in recyclability, financial and managerial issues, resource scarcity, and resistance from consumers.

Table 2. Major Drivers in Sustainable Construction.

Drivers	Source
Necessity of corporate social responsibility for sustainable and ethical business growth	[57]
Customer willingness to pay for environmentally friendly designs	[57]
Develop both a physical and digital marketplace to support and advance material circularity	[48,58]
Initiatives and validation systems to promote the use of reused and recycled products	[7,48]
Support for innovation, circular economy research, and technological subsidies	[22]
Economic efficiency	[59]
Business growth and success	[59]
Support from senior leadership	[60]
Sustainable long-term energy strategy integrated into the company	[60]
Enhancing corporate image and reputation	[61]

outlines the main drivers to sustainable construction in Saudi Arabia.

1.1.4. Organizational Culture

The collective system of core values, beliefs, and underlying assumptions that are deeply ingrained and pervasive across the organizational environment constitutes organizational culture [62]. It is an essential parameter in attaining corporate sustainability and successfully implementing environmental management initiatives, as it influences the attitudes, behaviors, and practices that promote sustainable development throughout the organization [63]. Embedding sustainable practices into a company’s core values is crucial for establishing environmental and social responsibility as integral elements of its organizational culture and strategic decision-making [64]. Organizational culture fundamentally influences managerial behaviors and decision-making processes, which critically affect the effectiveness, strategic orientation, and innovative capacity of environmental management initiatives [65].

A green organizational culture serves to promote managerial awareness regarding resource utilization, waste output, and energy consumption, thereby facilitating improvements in the firm’s environmental performance [66]. It facilitates the adoption and consistent practice of sustainable behaviors among employees in their routine activities [67].

The organizational culture functions as a critical determinant, either facilitating or obstructing the development of global circular economy practices [68,69]. In construction industry, resistive organizational cultures and insufficient commitment to Circular Economy principles as substantial barriers to the enforcement of sustainable practices [16,70]. An organization’s readiness significantly influences the success of innovation initiatives, as it determines management’s capacity to assign necessary resources for adopting new strategies that involve employee adaptation and a supportive organizational culture [71].

The construction industry exhibits significant resistance to the implementation of circular economy techniques and methods, largely attributable to entrenched organizational culture characterized by hesitancy and risk aversion, which subsequently hampers the industry’s capabilities to effectively enforce sustainable practices and positions it as its own primary obstacle to circular economy integration [72]. Ferreira et al. [73] reveal that the organization predominantly exhibits a clan-oriented culture focused on collaboration and teamwork, alongside an adhocracy culture that prioritizes creativity and innovation, both of which support the implementation of circular business principles.

Table 3. Organizational Culture.

Organizational Culture	Source
Contractor’s ethos	[74]
Priority to environmentally sustainable methods in projects.	[74]
Exploring and implementing innovative approaches and sustainable methods to the projects	[74]
Staff are acknowledged for implementing sustainable practices	[74]
Leadership is highly committed to promoting sustainable practices.	[74]
A dedicated team oversees and implements our sustainability initiatives effectively.	[74]
Staff value balancing efficiency, equity, and social responsibility.	[75]
Employee actions promote sustainability without direct oversight.	[76]

presents major dimensions of organizational culture.

1.1.5. Sustainable Construction Practices

The successful enforcement of sustainable principles, aligned with their established definitions and key characteristics, depends on a collaborative approach that involves coordinated efforts and a strong, unwavering commitment from all relevant stakeholders, including government agencies and construction parties [77]. The integration of sustainable construction techniques and methods minimizes the environmental impacts linked with built assets across their entire lifecycle, thereby supporting the achievement of national sustainable goals [7,78].

The incorporation of IoT, AI, blockchain technologies and big data analytics offers a strategic approach for advancing sustainable construction practices aiming to optimize resource management, enhance transparency, and support environmental sustainability [79]. Sustainable construction’s successful advancement fundamentally rooted in collaborative efforts of governments, academia and industry to drive advancement and facilitate sustainable practices [80]. The incorporation of recycled materials such as foundry sand, red mud, waste glass, lathe iron waste dust, fly ash, brick aggregate and plastics in construction provides an effective means to protect and preserve natural resources, lower carbon emissions, and minimize waste allocated to landfills, ultimately fostering sustainable development [81]. The major practices of sustainable construction are highlighted in

Table 4. Sustainable Construction Practices.

Sustainable Construction Practices	Source
Management’s strategic approach and decision-making in relation to sustainability practices.	[82]
Innovative and technological practices used to promote sustainability	[82]
Enhancing Stakeholder Collaboration	[83]
Use of recycled materials	[81]
Integration of adaptability within design and construction methodologies	[84]
Assessment of the quality and effectiveness of occupant health and safety measures	[84]
Inclusion of building services within the construction workflow.	[84]

.

2. Materials and Methods

2.1. Research Framework

Circular Economy theory forms the foundation of this research, which examines the influence of barriers and drivers on the sustainable construction practice, with Organizational Culture serving as a moderating construct [85]. Figure 1 illustrates the conceptual framework.

2.2. Hypothesis Development

Hypothesis 1. 

Barriers positively influence sustainable construction practices among Eastern Region contractors.

Hypothesis 2. 

Drivers positively influence sustainable construction practices among Eastern Region contractors.

Hypothesis 3. 

Organizational culture positively influences sustainable construction practices among Eastern Region contractors.

Hypothesis 4. 

The connection between barriers and sustainable construction practices is moderated by organizational culture.

Hypothesis 5. 

The connection between drivers and sustainable construction practices is moderated by organizational culture.

2.3. Population and Sampling

The main data collection instrument employed by this study is close-ended questionnaire, which focuses on large contractors with 501 to 3000 employees operating within the Eastern Region of Saudi Arabia [86]. Within the target population, contractors were chosen using a simple random sampling to ensure each had an equal likelihood of being chosen [87]. In the Eastern Region, the construction sector is managed by 201 large contractors. The workforce exhibits a gender distribution of 4.4% females and 95.6% males, with non-national workers constituting 84.02%, while Saudi nationals comprise 15.98%. The occupational composition includes engineers, general workers, support staff, technicians, and other specialized roles, with expertise spanning, building and landscape services and architecture and engineering services (technical testing and analysis), civil engineering, building construction and specialized construction activities [88]. For this study, the calculated minimum sample size required is 134 participants based on Yamane Formula [89].

2.4. Questionnaire and Data Collection

This study utilized closed-ended questionnaires, which allow for efficient data collection, improve clarity for respondents, minimize ambiguity, and yield quantifiable, reliable results with higher response rates [90]. Multiple strategies were implemented to facilitate robust data collection. Participants were given prior information regarding the study, and a sincere appeal was made through the cover letter to encourage participation (Supplementary Materials). Respondents answered using a five-point Likert scale, ensuring clear and appropriate structuring and formatting of questions. Continuous follow-up was maintained to enhance response rates, and the survey was targeted specifically at relevant respondents. Additional measures of data collection were undertaken to maximize the accuracy and validity [91,92]. Out of 210 questionnaires distributed, 172 returned, of which 18 invalid, 154 valid responses and ensuring a valid response rate of 73%.

2.5. Data Analysis

This study employed SmartPLS 4.1.1.4 for data analysis, which ensures robust performance in executing PLS-SEM techniques, its ease of use, user-friendly interface and continuous enhancement and development of innovative tools, making it a preferred choice among researchers seeking accurate and reliable results [93,94].

3. Results

3.1. Demographic Profile

The demographic analysis reveals a significant gender disparity, with males constituting 93.51% of the employees, while females represent only 6.49%. A considerable majority of workers are foreign nationals, accounting for 79.87%, in contrast to 20.13% Saudi nationals. The workforce is distributed across various occupational categories, including engineers (24.03%), supporting staff (18.18%), technicians (11.69%), general workers (12.99%), and other categories comprising 33.12%. The data indicates 9 respondents (31.82%) represent contractors with 500–1000 employees, while 33 respondents (21.43%) are from contractors with 1001–1500 employees. A substantial proportion, 46 respondents (29.87%), originate from contractors employing 1501–2000 workers. The smaller segments include 18 respondents (11.69%) from contractors with 2001–2500 employees and 8 respondents (5.19%) from contractors with 2501–3000 employees. Contractor activities are predominantly concentrated in building construction (73.38%), followed by civil engineering (15.58%) and specialized construction activities (11.04%).

Table 5. Demographic Profile.

Characteristics	Category	Frequency and Percentage
Workers by gender	Male	144 (93.51%)
	Female	10 (6.49%)
Workers by nationality	Saudi National	31 (20.13%)
	Foreign National	123 (79.87%)
Contractors by workers’ category	Engineer	37 (24.03%)
	Supporting Staff	28 (18.18%)
	Technician	18 (11.69%)
	Worker	20 (12.99%)
	Other	51 (33.12%)
Employees working experience (Years)	1–3	9 (5.84%)
	4–6	16 (10.39%)
	7–9	51 (33.12%)
	10–12	18 (11.69%)
	13–15	21 (13.64%)
	>15	39 (25.32%)
Employees working full-time	500–1000	49 (31.82%)
	1001–1500	33 (21.43%)
	1501–2000	46 (29.87%)
	2001–2500	18 (11.69%)
	2501–3000	8 (5.19%)
Contractors by division	Civil Engineering	24 (15.58%)
	Construction of Buildings	113 (73.38%)
	Specialized Construction Activities	17 (11.04%)

summarized the participants’ and contractors’ demographic profiles.

3.2. Measurement Model

The measurement model (outer model) establishes the association of observed indicators with latent construct, clarifying how measurable items represent the underlying construct [95]. In SmartPLS, validating the measurement model involves assessing indicator reliability (ensuring indicators accurately reflect constructs), construct reliability (consistency of indicators), convergent validity (indicators effectively represent the construct), and discriminant validity (confirming construct distinctiveness) [96,97]. The measurement model is depicted in Figure 2.

Indicators are considered reliable when their outer loadings exceed 0.708 [98]. Indicators BR4, BR8, DR1, DR4, DR6, DR9, OC7, and OC8 were deleted owing to their factor loadings falling below the threshold of 0.708. However, all remaining indicator loadings in this study meet this criterion, exceeding 0.708 threshold.

This study’s results demonstrate that Cronbach’s alpha and CR values surpass 0.7, thereby establishing that internal consistency is satisfactorily established within the measurement model [99]. Furthermore, to establish convergent validity, AVE exceeds 0.5, a criterion which this study successfully meets, confirming adequate convergent validity [100,101].

Table 6. Results of PLS-SEM Analysis.

Constructs	Indicators	Loadings	Cronbach’s Alpha	CR	AVE
Barriers	BR1	0.721	0.902	0.903	0.560
	BR2	0.751
	BR3	0.794
	BR5	0.717
	BR6	0.764
	BR7	0.716
	BR9	0.811
	BR10	0.739
	BR11	0.717
Drivers	DR2	0.742	0.862	0.866	0.592
	DR3	0.746
	DR5	0.768
	DR7	0.833
	DR8	0.735
	DR10	0.788
Organizational Culture	OC1	0.739	0.851	0.855	0.574
	OC2	0.713
	OC3	0.719
	OC4	0.828
	OC5	0.744
	OC6	0.796
Sustainable Construction Practices	SCP1	0.724	0.880	0.887	0.583
	SCP2	0.746
	SCP3	0.701
	SCP4	0.710
	SCP5	0.813
	SCP6	0.832
	SCP7	0.807

shows the PLS-SEM analysis results.

Discriminant validity assesses how well different constructs in a model are empirically differentiated [102]. It is crucial as it confirms that every construct in a research model uniquely reflects a distinct concept, ensuring accurate interpretation and validation through empirical evidence of low correlations between constructs [103]. The HTMT (threshold value of 0.85) is recognized as a reliable criterion for assessing discriminant validity for its proven ability to effectively distinguish between closely related but conceptually separate constructs [104]. For this study, HTMT values are under 0.85, thereby ensuring that discriminant validity is established and confirming their conceptual distinctiveness.

Table 7. HTMT Discriminant Validity Results.

	BR	DR	OC	SCP
BR
DR	0.230
OC	0.334	0.308
SCP	0.730	0.598	0.664

presents HTMT result.

3.3. Structural Model

The structural model (inner model) is a conceptual framework, which demonstrates and tests the hypothesized directional connections and influences between latent constructs [105]. This research ensures that all VIF values are less than 3, indicating the absence of collinearity within the model [96]. The structural mode is depicted in Figure 3.

Bootstrapping process using 5000 subsamples was carried out to evaluate the robustness of the estimates. The BCa confidence interval method was applied to obtain interval estimates, using a two-tailed test at 5% significance cutoff [106].

Table 8. Bootstrapping Results.

Relationship	Original Sample (O)	Standard Deviation	T Statistics	p	Result
BR -> SCP	0.496	0.049	10.107	0.000	Accepted
DR -> SCP	0.342	0.048	7.145	0.000	Accepted
OC -> SCP	0.349	0.044	7.908	0.000	Accepted
OC × BR -> SCP	0.042	0.044	0.957	0.339	Rejected
OC × DR -> SCP	0.143	0.042	3.363	0.001	Accepted

presents Bootstrapping results.

The in-sample predictive power, known as the coefficient of determination (R²), is a key statistical metric used to analyze how accurately the model predicts the outcome construct, reflecting the share of the dependent construct’s variability captured by the independent constructs and it ranges from 0 to 1 [96,107,108]. According to Chin [109], R² less than 0.19 indicates a very weak association, between 0.19 and 0.33 signifies a weak association, from 0.33 to 0.67 reflects a moderate association, and 0.67 or higher denotes a substantial association. The evaluation revealed that the combined effects of the independent constructs (barriers and drivers), moderated by organizational culture, account for 72% of the variance in implementing sustainable practices. This high value of R² (0.72) demonstrates the model’s robust explanatory strength.

In structural equation modeling, effect size (f²) quantifies the strength of the association between a predictor (independent construct) and an endogenous (dependent) construct [110]. Following Cohen’s [111] guidelines for assessment of the predictive power, where values of 0.02, 0.15, and 0.35 are interpreted as thresholds for weak, moderate, and large effect sizes, respectively, the analysis revealed substantial effects. The construct of Barriers (f² = 0.789) and the construct of Drivers (f² = 0.382), both indicated a large effect on Sustainable Construction Practices.

To evaluate out-of-sample predictive power, this study conducted a PLS predict/CVPAT analysis [112,113,114]. The analysis yielded positive Q² predict values for all seven sustainable construction practices indicators (SCP1–SCP7), ranging from 0.308 to 0.516. These positive values provide an initial indication of the model’s predictive relevance. This study attained strong out-of-sample predictive power, as evidenced by the RMSE and MAE values, which were lower than those of the benchmark model across all seven indicators.

Table 9. PLS predict Result.

	Q2 Predict	PLS-SEM RMSE	PLS-SEM MAE	LM RMSE	LM MAE
SCP1	0.351	1.153	0.961	1.272	1.041
SCP2	0.355	1.148	0.927	1.273	1.052
SCP3	0.313	1.182	0.964	1.250	1.026
SCP4	0.308	1.189	0.970	1.286	1.026
SCP5	0.516	0.994	0.795	1.070	0.857
SCP6	0.458	1.052	0.878	1.112	0.923
SCP7	0.499	1.012	0.819	1.109	0.870

provides the outcomes of PLS predict.

Moreover, the predictive performance of the model’s latent construct (sustainable construction practices) was assessed using the CVPAT [114]. The results show that the PLS-SEM model’s prediction error (Loss = 1.225) was lesser than both the IA benchmark (by 0.817, t = 8.208, p < 0.001) and the LM benchmark (by 0.213, t = 5.522, p < 0.001), confirming its superior predictive accuracy compared to simple indicator averages and linear regression models.

The two-way interaction between drivers and organizational culture on sustainable construction practices is shown in Figure 4. The connection between drivers and sustainable practices is stronger for contractors with a high level of organizational culture compared to those with a low level of organizational culture. A high organizational culture results in a steeper slope, indicating that any increase in drivers leads to a significant rise in sustainable practices.

Based on Hair et al. [110], the f² of sustainable construction practices is calculated using Equation (1).

$$f^2={\displaystyle \frac{R^{2\left(ModeratingConstructIncluded\right)}-R^{2\left(WithoutModeratingConstruct\right)}}{1-R^{2\left(ModeratingConstructIncluded\right)}}}$$

(1)

The effect size of sustainable construction practices (as shown in

Table 10. Effect Size of Sustainable Construction Practices.

	R2 (incl.)	R2 (excl.)	f2	Effect Size
SCP	0.72	0.597	0.336	Moderate

) is 0.336 which falls in the moderate category [111].

4. Discussion

The study assessed how barriers, drivers, and organizational culture influence sustainable construction practices among contractors in the Saudi Arabia’s Eastern Region. The results from the SmartPLS analysis confirm that all three constructs directly and positively influence sustainable construction practices. Furthermore, organizational culture strengthens the effect of drivers on sustainable construction practices but does not influence the association between barriers and sustainable construction practices.

The analysis indicates that barriers have positive influence on Sustainable Construction Practice (β = 0.496, p < 0.001). This reflects that contractors already engaged in sustainability are more aware of barriers or that these barriers are perceived as challenges being actively addressed, requiring innovative solutions rather than obstacles that hinder progress. Their active identification and management serve as a critical catalyst for action. The perception of high costs associated with sustainable solutions and the lower motivation for execution staff drive reassessment of long-term benefits, encouraging innovation and incentives in affordable green technologies. Personnel shortages and inadequate collaboration between practitioners, research institutions, and environmental organizations underscore the need for integrated education and cross-sector partnerships to develop a new generation of specialists and comprehensive project ecosystems. Limited awareness, absence of structured methodologies, and internal resistance highlight the need for well-defined standards, strong leadership, and the integration of sustainability metrics within procurement processes to effectively align environmental objectives with financial performance. The lack of clear roadmaps, misalignment between goals and practices, procurement inefficiencies, and weak environmental systems have driven the adoption of digital tools like BIM and IoT, promoted recycling and standardized materials and accelerated waste management efforts in construction. These results are consistent with the study conducted by Darko et al. [115], Hwang et al. [116], Chan et al. [117], and Sivashanmugam et al. [118]. From a circular economy perspective and within the context of Saudi Vision 2030, these findings suggest that barriers stimulate innovation and reinforce sustainable practices, rather than being inherently desirable.

Drivers also demonstrated a significant positive impact on Sustainable Construction Practices (β = 0.342, p < 0.001). Drivers such as leadership commitment, corporate social responsibility, and economic incentives provide the enabling forces that improve sustainable practices. In particular, client willingness to invest in environmentally friendly solutions and the push for energy efficiency have become increasingly influential in the Saudi market. This suggests that when financial and reputational rewards are clear, contractors are likely to integrate recycled materials, adopt innovative technologies, and improve stakeholder collaboration. These findings are consistent with the study conducted by Lam et al. [119] and Darko et al. [120].

Organizational culture was also found to positively influence sustainable construction practices (β = 0.349, p < 0.001). A culture that emphasizes environmental responsibility, values employee contributions, and empowers dedicated sustainability teams creates an ideal environment for sustainability growth. Empirical studies have emphasized that cultural preferences strongly affect how contractors implement green construction measures, with supportive cultures reducing resistance and ensuring alignment between strategy and practice [121,122,123].

Organizational culture strengthened the impact of drivers on sustainable construction practice (β = 0.143, p = 0.001), suggesting that culture functions as an amplifier rather than a substitute for drivers. When contractors already have leadership commitment, corporate social responsibility initiatives, and supportive market signals, a strong culture ensures that these drivers are fully translated into practice. On the contrary, organizational culture did not significantly moderate the barriers–sustainable construction practice relationship (β = 0.042, p = 0.339). This indicates that while culture can enhance the effects of drivers, it is insufficient to neutralize barriers such as cost, policy gaps, and limited technical capacity.

5. Conclusions

The findings corroborate existing literature while revealing how barriers, drivers and organizational culture influence the implementation of sustainable practices. Importantly, the results highlight the vital role of organizational culture in enabling sustainable development and enhancing sustainability, offering valuable theoretical contributions and practical direction for industry professionals and policymakers aiming to promote sustainable growth within the construction sector. The results depict a substantial positive association of drivers, barriers and organizational culture on sustainable construction practices, aligning with existing literature on factors promoting sustainability. This study quantifies these relationships, providing valuable insights into their strength and impact. Organizational culture strengthens the connection between drivers and sustainable construction practices. To capitalize on this, companies should implement targeted change initiatives, including employee and management training programs to enhance sustainability awareness, leadership initiatives that visibly prioritize green practices, dedicated sustainability teams to coordinate projects, and incentive systems to reward proactive contributions. Since organizational culture did not significantly moderate the impact of barriers on sustainable construction practices, policymakers should introduce mandatory sustainability standards, provide financial incentives (e.g., grants), enforce green building certification schemes, support skill development programs to address personnel shortages, and promote collaboration between contractors, research institutions, and environmental organizations. These measures directly target barriers such as limited awareness, low staff motivation, poor coordination, high costs, and insufficient expertise, enabling more effective adoption of sustainable construction practices in the Eastern Region of Saudi Arabia. This study helps contractors to understand how organizational culture influences sustainable practices, promoting project long-term sustainability.

Although this study offers robust empirical evidence, there is a need to acknowledge several limitations. The sample is limited to large contractors in the Eastern Region of Saudi Arabia, which may restrict the generalizability to smaller firms or other provinces. Insights into causal inferences are limited by the cross-sectional nature of the data. The cultural, economic and regulatory frameworks of the Kingdom are unique. Therefore, the results may not be fully transferable to other settings. To address this, future research should pursue comparative studies with other GCC countries, such as the UAE and Qatar, or with developing nations that have similar scales of infrastructure investment. Such a comparative perspective would help distinguish universal principles from those specific to the Saudi context, thereby enriching the theoretical and practical contributions of this line of research. Longitudinal research designs would also help capture how the interaction between barriers, drivers, and culture evolves over time as market and regulatory conditions change.