Sustainable Business Performance: Examining the Role of Green HRM Practices, Green Innovation and Responsible Leadership through the Lens of Pro-Environmental Behavior

Abstract

Due to the recent economic crisis, the requirement for sustainable company performance has spread across the globe, with green initiatives being seen as the best way to address it. Recent literature and regulators have taken notice of this predicament. The deployment of green innovation, responsible leadership induction, and green human resource management (GHRM) techniques have been made necessary by the significant focus on attaining business sustainability. This study aims to provide light on the banking industry’s perception of how GHRM practices, green innovation, and responsible leadership affect business sustainability practices. The data were provided by 396 banking professionals employed by the top five commercial sector banks nationwide. By using the Mplus program for analysis, the study’s hypotheses were evaluated using structural equation modeling. The findings show a positive relationship between GHRM practices, ethical leadership, green process innovation, and sustainable company performance. However, an intriguing finding between responsible leadership and sustainable business performance was the role that pro-environmental conduct played as a partial mediator. The findings offer scholars and practitioners interested in firms’ sustainable business performance additional context-specific social, ecological, and financial implications. The effectiveness of GHRM practices, responsible leadership, and green innovation as a strategy to increase business sustainability in a developing country environment has only received minimal academic attention so far. A literary gap exists as few studies have been conducted to test the role of green HRM, responsible leadership, and green innovation’s impact on sustainable business practices. Small number of studies taken pro-environmental behaviors as a mediator in the recent past. In light of this, the present study has taken these behaviors as a mediator to test the mediation effect in the banking sector of Pakistan. So, the present study removed the gap by exploring the mediation effect of pro-environmental behaviors. The selection of Pakistan’s banking sector for analysis in the present study is a significant contribution to the literature because no studies have previously been conducted on Pakistan’s banking sector to analyze the role of green HRM practices, responsible leadership, and green innovation’s impact on sustainable business performance through the mediating role of their pro-environmental behavior. The present study provides guidelines to senior management in the banking sector to understand the role of green HRM practices, responsible leadership, and green innovation practices’ importance for sustainable business performance as sustainable performance is essential to excel in this competitive business world.