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The Interconnection between Decent Workplace and Firm Financial Performance through the Mediation of Environmental Sustainability: Lessons from an Emerging Economy

Author

Listed:
  • Muhammad Zahid

    (Department of Management Sciences, City University of Science and IT, Peshawar 25000, Pakistan
    City University Center for Sustainability Studies (CUCSS), Peshawar 25000, Pakistan)

  • José Moleiro Martins

    (ISCAL (Instituto Superior de Contabilidade e Administração de Lisboa), Instituto Politécnico de Lisboa, Avenida Miguel Bombarda, 20, 1069-035 Lisboa, Portugal
    Business Research Unit (BRU-IUL), Instituto Universitário de Lisboa (ISCTE-IUL), 1649-026 Lisboa, Portugal)

  • Haseeb Ur Rahman

    (Institute of Management Sciences, University of Science and Technology, Bannu 28100, Pakistan)

  • Mário Nuno Mata

    (ISCAL (Instituto Superior de Contabilidade e Administração de Lisboa), Instituto Politécnico de Lisboa, Avenida Miguel Bombarda, 20, 1069-035 Lisboa, Portugal
    Polytechnic Institute of Santarém, School of Management and Technology (ESGTS-IPS), 2001-904 Santarém, Portugal)

  • Syed Asim Shah

    (Department of Management Sciences, Attock Campus, COMSATS University Islamabad, Punjab 43600, Pakistan)

  • Pedro Neves Mata

    (ISTA-School of Technologies and Architecture, Instituto Universitário de Lisboa (ISCTE-IUL), ISTAR-IUL, Avenida das Forças Armadas, 1649-026 Lisboa, Portugal)

Abstract

This study aimed to investigate the impact of some important Sustainable Development Goals (SDGs), such as the decent workplace, climate change, and economic sustainability on firm financial performance (see Goals 8 and 13). By adopting an index from the previous literature, this study collected data from the annual and sustainability reports of the publicly listed companies of a developing country through content analysis from 2016 to 2018. The results revealed a significant increase in the level of compliance with workplace and environmental sustainability during the corresponding period. Furthermore, the estimations of ordinary least squares (OLS) and two-stage least squares (2SLS) panel data also unveiled a positive impact of workplace sustainability on the firm’s environmental and financial performance. Additionally, we noted that the findings were pronounced after addressing the problem of endogeneity. Moreover, the study also found a novel significant and positive mediating role of environmental sustainability in the relationship between workplace sustainability and the firm’s financial performance. This study has theoretical significance by proposing sustainability training and development as instrumental variables in the relationship of the workplace and environmental sustainability to firm financial performance. This study offers practical implications for regulatory bodies and business firms to integrate workplace and environmental sustainability practices into their routine operations for achieving sustainable industrialization.

Suggested Citation

  • Muhammad Zahid & José Moleiro Martins & Haseeb Ur Rahman & Mário Nuno Mata & Syed Asim Shah & Pedro Neves Mata, 2021. "The Interconnection between Decent Workplace and Firm Financial Performance through the Mediation of Environmental Sustainability: Lessons from an Emerging Economy," Sustainability, MDPI, vol. 13(8), pages 1-14, April.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:8:p:4570-:d:539879
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    References listed on IDEAS

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    1. Waseem Akhter & Arshad Hassan, 2024. "Does corporate social responsibility mediate the relationship between corporate governance and firm performance? Empirical evidence from BRICS countries," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 566-578, January.
    2. Ahmad Ali Jan & Fong-Woon Lai & Muhammad Umar Draz & Muhammad Tahir & Syed Emad Azhar Ali & Muhammad Zahid & Muhammad Kashif Shad, 2022. "Integrating sustainability practices into islamic corporate governance for sustainable firm performance: from the lens of agency and stakeholder theories," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(5), pages 2989-3012, October.

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