Impact of Green Human Resource Management on Firm’s Valuation- A Study on FMCG Companies

In the dynamic corporate environment, environmental sustainability has emerged as a pivotal factor influencing organizational success. Green Human Resource Management (GHRM) has been recognized as a strategic method to synchronize human resource policies with environmental goals, thereby improving organizational performance and valuation. This research examines the effects of GHRM practices on the valuation of Fast-Moving Consumer Goods (FMCG) companies, utilizing the Ability-Motivation-Opportunity (AMO) framework. A purposive sample of 14 FMCG companies listed in the Nifty 100 is analysed, with data spanning from 2019-2020 to 2023-2024, employing content analysis to evaluate the impact of GHRM components on firm valuation, as indicated by market capitalization. The research underscores the role of green HR practices, including green recruitment, training, and reward systems, in enhancing employee capabilities, fostering eco-friendly motivation, and creating opportunities for sustainable engagement. To address the objective the study has undertaken the wide usage of content analysis to quantify the aspects of the AMO framework from the company’s annual report and has executed the regression equation using the balanced panel framework. The results indicate a significant relationship between a few GHRM initiatives, namely recruitment & selection, pay, organizational culture, decision-making, and firm valuation, highlighting their strategic significance in tackling environmental issues, improving brand reputation, and promoting long-term competitiveness. This study enhances the comprehension of GHRM within the FMCG sector and provides practical recommendations for organizations aiming to incorporate sustainability into their human resource strategies.