Green Leadership, environmental knowledge Sharing, and sustainable performance in manufacturing Industry: Application from upper echelon theory

The changing climate with new regulations, policy changes, consumer behaviour, technological shifts, and changes in business-as-usual places significant pressure on organizations to safeguard the ecosystem and strive for sustainable performance. Sustainability is essential for firms to effectively handle environmental challenges. As stakeholders become more environmentally conscious, firms are under greater pressure to implement green leadership and environmental knowledge sharing to enhance sustainable performance. In this context, this study examines the impact of green leadership on environmental knowledge sharing. Second, we examined the impact of environmental knowledge sharing on firms’ sustainable performance. In addition, we explore the mediating role of environmental knowledge sharing in the relationship between green leadership and firms’ sustainable performance, as supported by upper echelon theory. To capture firms' sustainable performance, we considered economic, social, and environmental dimensions. For hypotheses testing, we collected data from 257 respondents working in Pakistan’s manufacturing sector small and medium-sized firms, and analyzed the data using a structural equation model (SEM) with partial least squares (SmartPLS). The results reveal a positive and significant impact of green leadership on environmental knowledge sharing. This finding reveals that firms’ sustainable performance can be improved by adopting green leadership practices and by sharing environmental knowledge in the workplace. Importantly, our results show that environmental knowledge sharing significantly and positively mediates the relationship between green leadership and firms’ sustainable performance. This finding suggests that environmental knowledge sharing channels the impact of green leadership practices on firms’ sustainable performance. The current study’s findings and theoretical underpinnings shed new light on firms’ sustainable performance, shaped by green leadership practices and environmental knowledge sharing in the workplace.