Environmental Practices That Have Positive Impacts on Social Performance: An Empirical Study of Malaysian Firms

Abstract

Despite many environmental studies, the literature lacks studies emphasizing the significant nature of the human–environment connection. This study focuses on the impact of manufacturing environmental practices on social performance, which is crucial for employees’ wellbeing, human development, and quality of life that lacks empirical evidence. This study searches for a mechanism to enhance social performance through sustainable practices and test the mediating effects of environmental collaboration. This study examines the proposed hypotheses on the data sample of 120 Malaysian manufacturing firms, with partial least squares structural equation modeling. Explicitly, the results reveal sustainable practices comprised of purchasing social responsibility (PSR), long term orientation (LTO), supplier assessment (SA), and environmental collaboration (EC) contribute almost 50% of social performance. Still, LTO and SA are the best practices. PSR, LTO, and SA significantly contribute 45% of EC, but LTO and PSR remain the best sustainable practices. Firms investing in these sustainable practices of improving social performance, driven by sustainability, show these are worthy strategies. Concentrating on certain sustainable practices could improve employees’ wellbeing, human development, and quality of life. The novel contribution of the study is the formulation of social performance and its empirical work testing the mediating effects of EC between sustainable practices and social performance.