The impact of green tax and energy efficiency on sustainability: Evidence from Bangladesh

Abstract

This study examines the impact of green tax and energy efficiency on sustainability in the context of Bangladeshi manufacturing companies. Three hundred eighty three responses were collected from manufacturing companies in Bangladesh, and partial least squares structural equation modeling (PLS-SEM) was used to analyze the data. The results show that green tax significantly positively affects environmental and social sustainability but not economic sustainability. Energy efficiency has a positive impact on all three dimensions of sustainability. Furthermore, energy efficiency mediates the relationship between green tax and economic, environmental, and social sustainability. The findings suggest that energy efficiency should be promoted as an effective means of achieving sustainability in manufacturing companies and that green tax policies can be enhanced by incorporating energy efficiency measures. This research contributes to the existing literature on sustainability by highlighting the importance of energy efficiency as a mediator between green tax and sustainability. The study’s practical implications are discussed in relation to the Bangladeshi manufacturing industry, and suggestions are made for policymakers and company managers. The originality of this study lies in its focus on a developing country context and its examination of the mediating role of energy efficiency in the relationship between green tax and sustainability.