Businesses face significant issues in achieving sustainability performance (SP) because of limited resources, environmental pressures and higher expectations of stakeholders, particularly in emerging economies. Eco-intellectual capital (EIC) has been recognized as one of the intangible strategic resources; however, limited research examines how and under what circumstances it can be converted into sustainability outcomes. So, this study aims to investigate the effect of EIC on SP, with green human resource management (GHRM) as a mediating role in this important business process.
A quantitative research design was used, incorporating primary data collected from 390 employees and managers of Pakistani SMEs. Partial least squares structural equation modeling was used to analyze direct and indirect relationships.
EIC components (green human capital, green structural capital and green relational capital) have a significant positive effect on SP dimensions (economic, environmental and social). Although GHRM partially mediates the relationship between EIC components and SP dimensions. The natural resource-based view (NRBV) and intellectual capital theory (ICT) endorse these findings and demonstrate how eco-friendly intangible resources are strategically used.
The results show that small and medium enterprises (SMEs) can improve their SP by knowing their eco-friendly intangible resources (EIC) through GHRM practice (e.g. training, recruitment and performance systems). These findings have implications for SMEs that lack sufficient resources to operate.
This empirical research contributes to prior evidence on the effects of EIC components on the SP dimension, with GHRM mediating the relationship. It also contributes to the literature on Pakistani SMSs by incorporating ICT and NRBV theories.
