Driving Sustainability Performance in Malaysia’s Palm Oil Industry: How Employee Engagement Makes the Difference

Abstract

Amid rising global scrutiny and environmental challenges, sustainability performance (SP) is crucial to the Malaysian palm oil industry’s long -term survival, global competitiveness, and ethical standing. This study examines the influence of transformational leadership (TL), organizational culture (OC), and organizational commitment (OCM) on SP, with employee engagement (EE) as a mediator. Despite increasing global sustainability demands, existing research often analyses these factors in isolation, lacking an integrated perspective on their combined impact. Furthermore, limited studies have investigated how EE translates leadership vision, cultural values, and commitment into tangible sustainability outcomes, particularly in the Malaysian palm oil industry. Grounded in the Resource-Based View (RBV) and Social Exchange Theory (SET), this study bridges these gaps by exploring both strategic and relational mechanisms that enhance sustainability performance. Employing a quantitative research design, the study utilises Structural Equation Modeling (SEM) to analyse the relationships among the variables. The findings provide valuable insights for industry practitioners seeking to enhance corporate sustainability, policymakers formulating sustainability regulations, and academics advancing organizational sustainability research. By aligning leadership, culture, and commitment with employee engagement, organizations can drive transformative ESG change, ensuring long-term resilience, ethical business practices, and sustainable growth in an increasingly competitive and rapidly evolving global market.