From Ethical Guidance to Workplace Sustainability: How Green Hrm and Psychological Climate Drive Employee Green Behavior in Emerging Market Banking

Abstract

This study aims to shed light on the mechanism by which Ethical Leadership (ETL) affects Employee Green Behavior (EGB) in commercial banking sector of KP, Pakistan. The empirical framework is based on Social Learning Theory and the Theory of Planned Behavior and it examines the structural role of Green Human Resource Management (GHRM) and Green Psychological Climate (GPSC). The data collected were analyzed by using SmartPLS 4 (PLS-SEM) with time-lagged data from 320 banking personnel. The measurement model showed good reliability, convergent validity and discriminant validity for all constructs (HTMT < 0.85). The results showed that Structural finding did not directly affect EGB (beta = 0.095, p = 0.206), but strongly affected GHRM (beta = 0.615, p less than 0.001), which then affected EGB (beta = 0.161, p = 0.031). The mediation analysis showed that the relationship between Ethical Guidance and EGB was fully mediated by GHRM (beta = 0.099, p = 0.039). Moreover, GPSC has a high direct influence on EGB (beta = 0.377, p<0.001). These findings confirm that for leadership intent to promote sustainable employee behavior, formal practices of Green HRM are required (Khan, Amin, & Saif, 2022; Saif et al., 2024).