Improving Firm's Economic and Environmental Performance Through the Sustainable and Innovative Environment: Evidence From an Emerging Economy.

Naveed Ahmad,Esra Aldhaen,Zia Ullah,Philippa Scholz,Miklas Scholz

doi:10.3389/fpsyg.2021.651394

Abstract

Businesses in the present era are dealing with a complex and unprecedented brew of social, environmental, and technological trends. This requires sophisticated, sustainability-based management. Yet organizations are often reluctant to place sustainability core to their business strategies with the mistaken belief that the costs associated with environmental investments outweigh the benefits. The Global Climate Risk Index has placed Pakistan on 5th position in the list of nations, most susceptible to climate change in its recent report. Pakistan lost the lives of 9,989 people, incurred economic losses of $ 3.8 billion, and faced 152 shocking climates between 1999 and 2018. Based on this information, it is established that Pakistan’s susceptibility to climate change is growing unprecedentedly and industrial pollution is one of the biggest contributors in this respect. The country needs to take emergency measures to address this issue. With this background, the present study aims to investigate the impact of environmental sustainability on environmental and economic performance (EP) with the mediating effect of environmental innovation (EI) in the manufacturing sector of Pakistan. The results show that environmental sustainability is a significant predictor of environmental performance and EP and EI mediates this relationship. The findings of the present study provide better insights to policymakers to address the environmental degradation, resulting from industrial pollution.

Highlights

Environmental sustainability (ES) is acknowledged as a crucial factor in business operations in recent days
Given that the bottom line objectives will remain the sole priority of any business, the basic objective of the current study is to investigate the relationship between ES, economic performance (EP), and the environmental performance (ENP)
We provided them multiple copies of a printed version of the questionnaire which they distributed among students who, as a professional, were working in different manufacturing organizations

Summary

Introduction

Environmental sustainability (ES) is acknowledged as a crucial factor in business operations in recent days. ES is regarded as a global issue that has come to the surface at an organizational level due to certain reasons such as global warming (Papalexiou and Montanari, 2019), scarcity of natural resources (Tsuboi, 2019), greenhouse gasses emission (Yusuf et al, 2020), and awareness of consumers about eco-friendly manufacturing practices of the corporations (Sarkis and Zhu, 2018; Afum et al, 2020). According to Howes et al (2017), ES related issues are crucial for the manufacturing sector due to two principle reasons, firstly, in the present age, manufacturing organizations have to publish their data about the utilization of energy resources and the damage done to the environment due to the consumption of these resources. As a result of all these activities, the notion of ES has registered itself as a critical factor for safe and healthy business activities (Sandrin et al, 2018)

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Conclusion