Employee Organisational Commitment and Corporate Environmental Sustainability Practices: Mediating Role of Organisation Innovation Culture

Abstract

The growing concerns about climate change have seen global leaders and the international community launch diverse initiatives, deals and reforms in an attempt to combat its negative impact. In response to these initiatives, corporates are increasingly prioritising environmental sustainability practices, such as reducing resource use, recycling and redesigning products and services to transition to sustainable operations, as a means of promoting trust and credibility, increasing their reputation and protecting the planet. However, the extant literature does not provide a clear understanding of the determinants of promoting corporate environmental sustainability practices (CESPs). Thus, drawing upon both resource‐based views (RBVs) of the firm and the economic views of neo‐institutional theory (NIT), this study examined the role of employee organisational commitment (EOC) and organisation innovation culture (IC) in promoting CESP. This quantitative study collected the required data through a questionnaire survey of senior to mid‐level managers of a total of 201 Dhaka Stock Exchange (DSE)‐listed and non‐listed firms. A two‐step structural equation modelling (SEM) technique, employing SmartPLS, was followed to test the study's hypothesised associations. The findings provide evidence of a direct association between EOC and CESP and an indirect association through IC. Our findings are robust as alternative models were developed and tested based on different control and instrumental variables relating to organisational characteristics. The findings of the study contribute to the environmental sustainability literature by providing empirical evidence of the importance of EOC and IC in promoting CESP. Further, the findings inform managers, governments, foreign investors and other stakeholders on the importance of building EOC and developing suitable cultural practices within an organisation that promote CESP.