Abstract
Background
At a global scale, the impact of the manufacturing sector on the environment has led to the increased demand for the sustainable practices and strategies that help the businesses achieve environmental, social, and economic objectives particularly within the context of developing economies.
Objective
This paper addresses this gap by investigating the relationship between employees and firms’ environmental performance in the manufacturing sector operating in a developing country, Pakistan—where the environmental focus is sparse and organizational structures rarely follow cross-functional systems.
Methods
Quantitative research was employed and SmartPLS technique was used to test the theoretical model with a valid response rate of 77 percent of senior and middle-level managers of manufacturing firms.
Results
Results revealed the significance of green HRM as direct effect with all constructs. And internal environment management mediates the relationship (β = 0.158; t-value = 3.458; p < 0.05; lower level = 0.077; upper level = 0.258) between green HRM and green health and Safety.
Conclusion
For sustainable performance, firms must transform their human resource into an environmentally responsible asset. Our findings provide practical implications for the managers of manufacturing firms where ethical monitoring of environmental management must be the prime concern of these firms.
Keywords
Introduction
In the present epoch, environmental management is gaining the attention of researchers from almost all fields of studies. On a global scale, the impact of the manufacturing sector on the environment has led to the increased demand for sustainable practices and strategies that help businesses achieve environmental, social, and economic objectives.1,2 The consequences of industrial pollution and harmful material (including toxins, chemicals, and effluents) have stimulated governments and NGOs, and corporations to act and develop policies and regulations to mitigate and reverse the deteriorating effect on society and the environment. To gain success within the community, earn profit and stay competitive, organizations have to pay attention to environmental and societal performance along with their economic performance.3,4 This concept is similar to the stakeholder theory, which promotes creating value for multiple stakeholders, such as customers, employees, suppliers, financiers, and communities (including the environment) by harmonizing their interests and reducing trade-offs. 5 Firms should balance their economic and social goals to achieve long-term sustainability.
Scholars have argued that by exploring the relationship between employees and organizations as a stakeholder relationship, we can better tackle today's complex organizational problems. 6 Using this theoretical framework to understand the relationship between employees and organizations is quite well established in the literature and comes under the Human Resources Management (HRM) discipline. Since the concept of sustainability has become the talk of the world and the operations of a business enterprise greatly rely on the role played by its HR department, there is considerable need of integrating the two concepts. According to some critics of HRM practices, there are several ethical problems in companies’ HRM setup as it controls the employees or treats workers as ‘resources’ and not as humans.6,7 Similarly, the related emerging concept of Green Human Resource Management (GHRM), which concentrates on promoting sustainable employee-organization practices, also has many unexplored ethical questions. For instance, understanding how managers in the manufacturing sector of developing economies execute or adapt to GHRM practices to provide a meaningful contribution to the field of business ethics. In the case of developed countries, it is relatively easier to strike a balance between economic and non-economic organizational goals due to better institutional structures. 8 On the contrary, firms operating in developing countries have demonstrated irregularities or adversely affected the overall environmental situation. For example, the GAP factory building collapse in Bangladesh in 2013, which resulted in the loss of many lives, 9 or other complicated sustainability issues in South and South East Asian countries, 10 or the issues of bribery in China acting as an obstacle in reducing air pollution. 11 This is often due to a lack of proper training and weaker law enforcement to protect employees and other stakeholders in developing countries. One of the main components of dealing with this predicament is to train workers and employ cleaner production practices to attain sustainability goals.
This paper aims to fill the gap by studying the relationship between employees and manufacturing organizations’ practices in one of the developing states i.e., Pakistan. For numerous causes the manufacturing sector is identified as the unsustainable sector and a major contributor to the issues of environmental sustainability. According to World Bank 2019 report, Pakistan is contributing 0.4 percent to the total global carbon emissions and this percentage is increasing. These statistics give a heads-up to all the stakeholders. It is also noteworthy that in Pakistan, the unsafe working environment imperils the health and life of workers and result in about 19,000 deaths in a year. For industrial workers, the work-related illness costs 0.8 percent of the country's GDP in a year and the air, water, industrial pollution, and occupational safety issues consume 8.9 percent of Pakistan's GDP in a year. We believe this line of inquiry will provide a framework for practitioners and policymakers of developing regions and further advance an ethical business theory. Recently, 12 highlighted the importance of conducting studies on stakeholder management in developing regions, as they differ in cultural, political, and socio-economic aspects. To become a sustainable workplace, the HR department can play a significant role in advancing employees’ green behavior. 13 HRM can propel the environmental sustainability initiatives of the organization by aligning the human resource activities and policies with the sustainability objectives. 13 Along with implementing GHRM practices, firms are striving to reduce workplace stress and hazards of health and safety and to do so, organizations are allocating resources to develop and implement environmental initiatives. 14 Internal environmental management (IEM) refers to a company initiative regarding the formation of environmental protection policies and objectives. 15 IEM and the support of the top management bring necessary eco-friendly changes in the processes and systems for the manufacturing of the products and services.16,17 The implementation of IEM brings about successful coordination among the organizational departments resulting in the reduction of environmental and health risks. 18 This paper examined the mediating effect of internal environmental management between GHRM and green health and safety.
Literature review and hypothesis development
Green human resource management - green health & safety
Green human resource management (GHRM) entails all the activities that develop, implement, and sustain a system that strives to transform the employees of an organization into green employees who endeavor to achieve the firm environmental objectives. 19 Researchers have asserted the significance of HRM in pursuing green agenda in firms, thus advocating the proposition of embedding green practices in the functions of HRM to enhance the firm's sustainability.20,21 Once a firm recruits and trains the employees, they stay motivated via a robust performance management system and compensation and reward plans that focus on providing opportunities for better implementation of environmental performance. 22 Likewise, employees also feel connected to their organization and have a stronger sense of belonging when organizations focuses of career adaptability. 23 Today businesses face highly competitive pressure, and there is a great need to adopt measures to enhance efficiency, deliver value, and act in more environment-friendly ways.21,24
14
Stated that the approach used by firms to tackle environmental issues and organize resources drives their ability to manage environmental issues.
25
Worked to overcome the operational shortcomings of sustainable development and stated that health and safety and sustainability are two parallel concepts, and both emphasize the protection and development of society, economy, and environment. As the health and safety standards and practices being followed by a firm improve, the organizational performance also improves leading toward the health and safety performance to help organizations achieve their sustainability objectives.25,26 Underscores the importance of psychosocial work environment, to enhance the health and overall quality of life of their workforce.
27
Culminated their study on occupational health and safety with the assertion that the future of GHRM has emerged to be promising for all the stakeholders of the firms.
28
Postulated that HRM is closely associated with green health and safety (GHS) performance. Similarly, dimensions of HRM also influence health and safety performance (including training).29,30 Because of the above pieces of evidence, we argue that GHRM has a significant relationship with the GHS. Thus, we posit the following hypothesis:
Green human resource management - internal environmental management
Green supply chain management (GSCM) can be further divided into two sub-concepts, internal and external practices.
16
Internal GSCM can be executed and managed by the individual manufacturers independently, while external GSCM relies on external cooperation of some level by the external stakeholders of the firm.16,17,31,3,32 proclaimed that HRM practices improve SCM practices leading to enhanced firm performance.
33
Asserted that GHRM and GSCM have emerged and evolved in parallel.
34
Found that in the contemporary era, where the demand for environmental management is growing, a lack of sustainability concerns in supply chain management leads to negative performance. A sustainable supply chain drives the hiring criteria of the firms by incorporating environmental, social, and economic concerns, depicting the significance of training the managers to be capable of analyzing the GSCM practices.
35
External and internal environmental management can lead the firm toward a more sustainable competitive advantage.
36
Some empirical studies have explored the mediating role of GSCM in the relationship between GHRM and the firm's performance.2,37,2 Concluded their study with the assertion that the environmentally competent employees produced as a result of the implementation of the dimensions of GHRM drive the diffusion of the core values and principles and lead to the implementation of internal environmental management. Based on the empirical support, we formulate the hypothesis:
Internal environmental management - green health & safety
The literature is emerging on the relationship between two concepts i.e., supply chain and health that supply chain initiatives enhanced health and safety performance.
38
Claimed that to develop GSCM, a firm should invest in green process management, recycling, and green technology systems to prevent pollution, waste management, and safety practices.
39
focused on the enablers of the sustainable supply chain in the textile industry and discovered that health and safety issues confronted by the firm act as the enabler to get involved in sustainable supply chain management activities.
40
Stated that health and safety initiatives implemented throughout the supply chain of the construction industry resulted in improved health and safety performance. These improvements included cleaner procedures, fire safety, use of personal protective equipment, safer use of chemicals, safety training and information sharing, lighting, and ventilation.
41
In light of the above empirical evidence, IEM depends upon the commitment and support of the top and middle management, which results in creating a safe workplace for all.42,43 Hence, we can posit the hypothesis that:
Mediating role of internal environmental management (IEM)
44
Affirmed that HR practices enhance the SCM activities of businesses, which ultimately results in improved business performance. Most of the existing literature focuses on independent functional systems to implement environmental management.
45
However,
44
suggested that the multi-functional approach should be used to explain environmental management. GHRM and GSCM have developed in parallel.3,3 Found that GSCM practices mediate the relationship between GHRM practices and firm performance.
3
Also asserted that firms should put efforts towards environmental management and invest in social programs to implement GHRM. For example, health and safety programs for the workers to protect them from safety hazards.
46
Studied the effect of occupational safety management on firm performance and discovered that managing safety at the workplace positively affects a firm's performance.
47
Employed robust health, safety, environment, and culture model to help managers create a health and safety culture to acquire knowledge and gain a competitive advantage.
40
Claimed that supply chain management and health and safety performance are related to each other. This study focuses on the relationship between the firm's resources (GHRM and IEM) on the health and safety performance of the organization, which drives the organization toward attaining a competitive advantage.
47
In light of the above-mentioned literature, we posit the following hypothesis:
Theoretical framework
This paper aims to examine the relationship between GHRM, IEM, and GHS. The theoretical framework has shown in Figure 1.

Theoretical framework.
Methodology
Our sample is the senior and middle-level managers of manufacturing firms in Pakistan. Manufacturing firms were selected because of their excessive environmental impact. 48 The list of the sub-sectors of the manufacturing industry (Table 1) was provided by the Securities & Exchange Commission of Pakistan (SECP). Simple random sampling was used for this study to reduce the generalizability issue. Data was gathered online because of the strict COVID-19 protocols. The researchers remain contacted with participants to encourage the completion of the questionnaire. We sent 196 structured questionnaires to the respondents, out of which 171 questionnaires were returned. 21 out of 171 returned surveys were either incomplete or incorrectly filled out. Quantitative analysis was conducted on a subset of the collected data, specifically using 150 survey responses (valid responses constituting 77%). The analysis employed a structural equation modeling approach through smartPLS. To determine the minimum sample size for this study G*Power tool was used. Based on the power of 0.95 required sample size for this study was 107. The present sample (150) exceeded the minimum required sample size. Mainly the respondents were male (76.7%), senior managers (59.4%), aged between 31–40 years (33.3%), with masters’ degrees (44.0%), and 11–20 years of working experience (31.1%). The respondents were majorly from the textile industry (26.2%). The demographic information is provided in Table 2.
Sub-sectors of the manufacturing industry of Pakistan.
Demographic profile.
Measures
In this study, the independent variable green HRM was measured by adopting an 18-item scale. 49 An item includes: “Our firm recruits individuals who have green awareness”. The dependent variable green health and safety (GHS), consist of three 3-items that we adopted from a study conducted by. 14 An item includes: “Our firm provides a green workplace for all”. Lastly, the mediating variable, internal environmental management consists of 7 items that we adopted from a study conducted by. 50 An item includes: “The commitment of GSCM from senior managers”. A 5-point Likert scale (“strongly agree” to “strongly disagree”) was used to record responses. For IEM, the 5-point Likert scale includes (1. Not considering, 2. Planning to consider, 3. Consider it currently, 4. Initiating implementation, 5. Implementing successfully).
Statistical analysis and results
Measurement model evaluation
This paper used SEM-PLS path modeling to analyze the hypothesized model. 51 The loading values for all the variables were in the range of 0.695–0.929. Cronbach alpha values were above the threshold value of 0.70, ranging from 0.800–0.936. 52 This indicates that all the constructs in this study have a high level of internal consistency and reliability. The Average Variance Extracted (AVE) values ranged from 0.556 to 0.748, indicating that convergent validity was achieved. The results are presented in Table 3. Findings have also successfully achieved discriminant validity for this study, as shown in Table 4. The values for the HTMT criterion were below the threshold value of 0.85. 53
Results of measurement model.
Discriminant validity (HTMT-criterion).
Note: GRS: green recruitment and selection; GT: green training; GPM: green performance management; GI: green involvement; IEM: internal environmental management; GHS: green health and safety.
Structural model evaluation
This study evaluates the predictive abilities and the relationships among the latent constructs and variables that form the basis of the structural model. 52 The study employed bootstrapping procedure to identify the level of significance. 54 Bootstrapping technique entails the technique of drawing numerous subsamples from the original data. For this study, 500 bootstrap samples and 150 cases were used to appraise the significance of the path coefficients. The relationships of the structural model were tested by setting the significance level at p < 0.01, and p < 0.05 (2-tailed). 52
Results of direct effects
Pertinent to the significance of the structural path, 3 hypotheses were postulated and tested for the direct effect and were found to be statistically significant. The results of the structural model assessment (direct effects) are presented in Table 5. H1 proclaimed a significant relationship between green human resource management and green health and safety (β = 0.192; t = 2.162; p > 0.01). Hence, H1 was supported. Moreover, H2 also anticipated a significant relationship between green human resource management and internal environmental management (β = 0.325; t = 4.335; p < 0.01). Hence H2 was supported. Similarly, H3 delineated a significant correlation between internal environmental management and green health and safety (β = 0.487; t = 6.504; p < 0.01). H3 was also supported. “R-square is a measure of the predictive accuracy of the model. It reflects the combined effect of the exogenous variables on the endogenous variables”. 52 It ranges from 0 to 1. 52 And the standard values for the small, medium, and large effect sizes are 0.02, 0.15, and 0.35, respectively. 55 For this study, the values of effect sizes and R-square are presented in Tables 5 and 6.
Results structural model assessment (direct effects).
Note: ** Significant at 1%, * Significant at 5%
Variance explained (coefficient of determination).
Results of mediation analysis
To assess the mediating effect of internal environmental management, the bootstrapping technique was used. Bootstrapping is a non-parametric resampling procedure that does not saddle the sampling distribution with the assumption of normality. 56 For this study, the rationale behind using the bootstrapping technique is its higher levels of statistical potential than Sobel's test. 57 Using the bootstrap technique, firstly, the path coefficients were determined to evaluate the direct effect model (H1-H3) and mediating variable (H4). In the second step, a percentile bootstrap was employed at the lower level of 2.5% and the upper level of 97.5% of the confidence interval to reach the significant estimates of the mediating effect. 58 For a mediated relationship, when the confidence interval does not contain 0, this implies that the indirect effect is notably different from 0 with a confidence level of 97.5% and the mediation exists. The results of the mediating effect are presented in Table 7. H4 postulated that internal environmental management mediates the relationship between green human resource management and green health and safety. The results shown in the indirect effect model show that mediation occurs since (β = 0.158; t-value = 3.458; p < 0.05; Lower level = 0.077; Upper level = 0.258). Hence, H4 is supported.
Result of indirect effect (mediation analysis).
Note: ** Significant at 1%, * Significant at 5%; GHRM: green human resource management; IEM: internal environmental management; GHS: green health and safety.
Discussion
Our paper investigated the significance of green human resource management (GHRM) and internal environmental management (IEM) in fostering the implementation of green workplace health and safety (GHS) in the context of manufacturing firms operating in a developing country. The demographic characteristics underscore the relevance and applicability of the study's insights within a diverse industrial and managerial context. The study's participants, primarily male (76.7%), aged 31–40 (33.3%), with master's degrees (44.0%), and a significant representation of senior managers (59.4%), reflect a diverse demographic profile. The industry distribution, with 26.2% from textiles, corresponds with the study's focus on manufacturing firms. H1 proclaimed a significant relationship between green human resource management and green health and safety (β = 0.192; t = 2.162; p > 0.01). Results revealed a significant positive relationship between green human resource management and green health and safety (vindicating H1). The findings imply that HRM is closely linked with the health and safety performance of the firms.28,59 A significant positive relationship was also found between green human resource management and internal environmental management with (β = 0.325; t = 4.335; p < 0.01) and hence supporting H2. Environmentally competent, knowledgeable, and involved employees produced by the implementation of GHRM in the organization enable the propagation of internal and external GSCM practices, leading to the better environmental performance of the firm. 2 Synergistic efforts to implement GHRM and green supply chains propel the organization towards environmental objectives.
The findings of this study fill the void in the knowledge on the relationship between GSCM and GHS by providing empirical support to the previous research that only presented conceptual knowledge regarding the relationship between the two constructs. H3 delineated a significant correlation between internal environmental management and green health and safety (β = 0.487; t = 6.504; p < 0.01) revealed a significant relationship between internal environmental management and green health and safety (validating H3). Indeed, the companies implementing internal environmental management are committed to environmental and safety issues. 38 Green supply chain initiatives promote the health and safety performance of the firms. 40 The findings support the hypothesized mediating model as internal environmental management mediates the relationship between green human resource management and green health and safety (corroborating H4). H4 postulated that internal environmental management mediates the relationship between green human resource management and green health and safety. The results shown in the indirect effect model show that mediation occurs since (β = 0.158; t = 3.458; p < 0.05; Lower level = 0.077; Upper level = 0.258). This study confirms the need for cross-functional design for effectively managing GHRM, IEM, and GHS. We also acknowledge that in developing countries, it is rare that manufacturing organizations follow the cross-functional design, due to various cultural, political, and socio-economic reasons. However, by tactfully managing the relationships between GHRM, IEM, and GHS, managers of manufacturing firms in developing countries can propel the organizations toward their objectives.
The findings advance our understanding of ethical practices in the manufacturing sector of developing countries and offer better insights to practitioners and scholars for achieving sustainability. Our results show that, although firms in developing countries like Pakistan have many challenges, the managers of manufacturing firms adhere to green human resource management (GHRM), green health and safety (GHS), and internal environmental management (IEM) practices. It also indicates that employees of these firms demand or prefer measures that support sustainability practices. Through this research, we have highlighted the importance of understanding cultures where firms do not entirely support cross-functional systems. Even in the absence of sustainable practices, there is a clear indication that manufacturing firms in developing countries will reap broader social benefits if they support green employment. Lastly, we stress further pursuing research on environmental ethics, which contributes towards solving the bigger problem of adhering to ethical business practices in the developing world.
Implications of the study
Contribution to the theory
From the perspective of theory, it is important to review the findings of this research to substantiate the theoretical implications in a broader domain of business ethics. In the resource-based view (RBV) theory, 60 proposed that the bundles of firm resources help it gain a competitive advantage. Similarly, the stakeholder theory promotes businesses to create value for multiple stakeholders (such as employees, suppliers, communities, financiers, and customers) by reducing trade-offs and building strong stakeholder relationships to achieve long-lasting organizational sustainability. 61 Through this research, we elaborated on the relationship between key stakeholders, ‘employees, and the organization. It highlights the importance of using a firm's resources and pragmatic stakeholder-centric approach in developing environmental ethics and sustainability.
Our findings depict a significant relationship between the firm's resources; GHRM, IEM, and GHS. Previously, 28 posited that HRM is closely associated with the health and safety performance of firms. 2 Discussed the role of GHRM in developing environmental values among employees. 2 Also stated that GHRM practices positively impact the implementation of GSCM. 29 Discussed that SCM initiatives improve the health and safety performance of organizations. Most of the searches on the subject matter do not test the relationships empirically. Hence, our study provides empirical findings for environmental management. The findings imply that the health and safety performance of firms can be improved by incorporating the mediating role of internal environmental management.
Contribution to practice
Our findings provide practical implications for the managers of manufacturing firms, particularly in Pakistan. Pakistan is a developing country in South Asia and a member state of the ASEAN Economic Community. Manufacturing firms need to adopt sustainable practices to gain business advantage. Since Pakistani firms are vulnerable to competition from other firms operating in the same region, ethical monitoring of environmental management must be the prime concern of these firms. Leadership must focus on the development and implementation of the environmental management policies of the firm in the context of GHRM and IEM to improve green health and safety. Since the sample respondents of this study were middle-level or senior managers of manufacturing firms, the results can be applied to the manufacturing firms operating in Pakistan and other developing countries with similar cultures, markets, and economies, such as India, Sri Lanka, and Bangladesh. It is a common belief that manufacturing firms in Pakistan follow limited ethical and environmental standards, which also deteriorate the environment. The findings suggest that firms in developing countries can also benefit economically and socially by building a successful employee—firm stakeholder relationship.
Limitations and future research directions
The first limitation of this study concerns the generalizability of the findings. Data was collected from manufacturing firms operating in different sub-sectors i.e., automotive, textiles, leather, electronics, chemical, and petrochemical, to enhance generalizability. But this study collected data from Pakistan only. Since Pakistan is a developing country, the collected data reflects the local context. The findings cannot be generalized to developed, industrialized, or newly industrialized economies. Future studies can expand their scope to target other countries to gain insight into the issues in those countries. Secondly, the target sample consisted of senior and middle-level managers of manufacturing firms. Nevertheless, in practice, one person may or may not understand all the business processes and activities of supply chain and human resource management. Future studies should consider collecting data from secondary sources such as corporate sustainability reports to validate the responses. Thirdly, a cross-sectional survey was used to collect data from the respondents. The dynamic business environment cannot be captured by a cross-sectional survey. However, longitudinal research design can record changes over a period of time. Lastly, this research focused on GHRM, IEM, and GHS. Future researchers can extend this idea to other perspectives and develop a new or advanced existing ethical theory that makes more sense for firms operating in developing countries.
Conclusion
The findings of this study suggest that the deteriorating impact of industrial activities on the environment and the health and safety of workers require the managers of manufacturing firms to formulate and implement robust policies. For sustainable performance, firms must transform their human resource into an environmentally responsible asset. The current situation of workplace health and safety and environmental sustainability is alarming, especially in developing economies. Moreover, there is a dearth of knowledge in the studies of business ethics on the relationship between green human resource management (GHRM), internal environmental management (IEM), and green health and safety (GHS). We attempted to spearhead the quantitative study to identify the relationship between these constructs. The results of the statistical analyses depicted positive relationships between green human resource management, green health, and safety and also ratified the mediation role of internal environmental management, thus supporting all the hypotheses of the study.
Moreover, the study encourages researchers and practitioners in developing economies to pay extra attention to green management. It has also become an important concern for today's generation as civil societies and communities push businesses to become more ethical towards the environment and other marginalized stakeholders. For scholars, this study can help enhance the knowledge of GHRM, IEM (GSCM), and GHS. For managers, the research findings can help shape the policies and decision-making process regarding environmental management. The suggested framework can be used by managers to streamline the initiatives of environmental management. Also, the managers must view GHRM, IEM, and GHS as important resources of the firm and utilize them efficiently and effectively to enhance firm performance.
Footnotes
Acknowledgements
Authors would like to thank the Editor(s) and Reviewers. Authors also thank all the participants for their contribution to this research.
Ethical approval
Lahore Garrison University (approval number: 2022-23-EIRB-001).
Informed consent
Respondents’ confidentiality was properly maintained and kept anonymous and a consent form of participation in the study was obtained from each participant before proceeding to complete the survey.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
Declaration of conflicting interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Data availability
Data will be available on request.
