Toward a new understanding of environmental and financial performance through corporate social responsibility, green innovation, and sustainable development

Abstract

The study’s primary objective is to advance the environmental management research field by examining the relationship between corporate social responsibility (CSR), environmental and financial performance while considering the mediating effect of sustainable development and green innovation. In addition, the study also analyzes the moderating effect of green innovation actions and green innovation strategies. Employees in the manufacturing sector in Pakistan completed a self-administered survey. Data gathered from 497 employees was analyzed using the structural analysis. The study results show that corporate social responsibility to the environment (CSREM), corporate social responsibility to employees (CSREM), to the community (CSRCO), and to the consumers (CSRCO) positively influences environmental performance (EVP) and financial performance (FP). Environmental sustainable development (ESD) and green innovation (GI) mediate the relationship between CSR, environmental, and firm financial performance. Green innovation strategies (GINS) and green innovation actions (GINAs) moderate the relationship between a firm’s environmental and financial aspects. The study deepens the understanding of CSR through an integrated model of mediator and moderator variables. It attempts to boost the firms’ performance (i.e., environmental, and financial) by applying the concept of green innovation and sustainable development. This study brings significant results for manufacturing firms, managers, entrepreneurs, policymakers, practitioners, employees, and other stakeholders. The study’s outcomes make the stakeholders adopt CSR consideration to achieve ecological and financial harmony in developing economies.