sustainability

Article
Employees’ Perceptions of Green Supply-Chain Management,
Corporate Social Responsibility, and Sustainability in
Organizations: Mediating Effect of Reflective Moral Attentiveness
Yasir Hayat Mughal 1, * , Kesavan Sreekantan Nair 1 , Muhammad Arif 1 , Fahad Albejaidi 1 ,
Ramayah Thurasamy 2,3,4,5,6,7 , Muhammad Asif Chuadhry 8 and Saqib Yaqoob Malik 9

1 Department of Health Administration, College of Public Health & Health Informatics, Qassim University,
Albukayriyah 52531, Saudi Arabia; [email protected] or [email protected] (K.S.N.);
[email protected] (M.A.); [email protected] (F.A.)
2 School of Management, Universiti Sains Malaysia, Minden 11800, Malaysia; [email protected]
3 Department of Information Technology & Management, Daffodil International University (DIU),
Birulia 1216, Bangladesh
4 University Center for Research & Development (UCRD), Chandigarh University (CU),
Chandigarh 160036, India
5 Fakulti Ekonomidan Pengurusan (FEP), Universiti Kebangsaan Malaysia (UKM), Bangi 43600, Malaysia
6 Faculty of Economics and Business, Universitas Indonesia (UI), Depok 16424, Indonesia
7 Azman Hashim International Business School, Universiti Teknologi Malaysia (UTM),
Kuala Lumpur 54100, Malaysia
8 Department of Education & Leadership, Shifa Tameer-e-Millat University, Islamabad 44000, Pakistan;
[email protected]
9 Department of Management Sciences, Preston University, Islamabad 44000, Pakistan;
[email protected]
* Correspondence: [email protected] or [email protected]

Citation: Mughal, Y.H.; Nair, K.S.; Abstract: (1) Background: The increasing level of concern over reduction non-renewable resources,
Arif, M.; Albejaidi, F.; Thurasamy, R.; global warming, pollution, and social issues has led firms to initiate green and social activities. Fur-
Chuadhry, M.A.; Malik, S.Y. thermore, there is limited empirical evidence on the potential impact of green initiatives, corporate
Employees’ Perceptions of Green
social responsibility (CSR), and reflective moral attentiveness (RMA) on sustainable performance.
Supply-Chain Management,
The purpose of this study was to investigate the mediating effect of reflective moral attentiveness
Corporate Social Responsibility, and
(RMA) on the relationship between green supply-chain-management practices (GSCM) and CSR
Sustainability in Organizations:
Mediating Effect of Reflective Moral
on sustainable performance. Based on the natural-resource-based view, stakeholder resource-based
Attentiveness. Sustainability 2023, 15, view, and signaling theory, this study investigated the role of GSCM practices and CSR in sustainable
10528. https://doi.org/10.3390/ performance using cross-sectional data from the manufacturing and services industries from Khyber
su151310528 Pakhtunkhwa province, in Pakistan. (2) Methods: Using a non-probability convenience-sampling
method, 500 employees were selected from the firms which are listed on the Pakistan stock exchange
Academic Editors: Mirco Peron and
(PSE) and questionnaires were distributed. Complete questionnaires were received from 380 employ-
Ting Chi
ees and used in the analysis, yielding a response rate of 76%. Partial least squares structural equation
Received: 29 April 2023 modeling (PLS-SEM) software was used for the confirmatory-factor analysis (CFA) and the testing of
Revised: 20 June 2023 the hypotheses. The CFA results revealed the reliability and validity of the questionnaires. (3) Results:
Accepted: 21 June 2023
The results of the structural model (hypotheses testing) show that four attributes of GSCM practices
Published: 4 July 2023
(internal environmental management, green purchasing, cooperation with customers, and eco-design)
have a positive influence on sustainable performance, while investment recovery and CSR were
found to be insignificant. Moreover, there were significant and positive influences of GSCM and RMA
Copyright: © 2023 by the authors. on sustainable performance. On the other hand, control variables, such as gender, experience, and
Licensee MDPI, Basel, Switzerland. age, were found to have no significant role in sustainable performance. A further analysis revealed
This article is an open access article that reflective moral attentiveness mediated the relationship between GSCM, CSR, and sustainable
distributed under the terms and performance. (4) Conclusions/implications: This study has several implications for green services
conditions of the Creative Commons and manufacturing firms specifically and for practitioners, researchers and academics in general. The
Attribution (CC BY) license (https:// innovation and novelty of this study lie in its determination of the contribution of RMA, GSCM, and
creativecommons.org/licenses/by/
CSR to achieving sustainable performance. Firms can improve their clean production activities by
4.0/).

Sustainability 2023, 15, 10528. https://doi.org/10.3390/su151310528 https://www.mdpi.com/journal/sustainability

Sustainability 2023, 15, 10528 2 of 18

incorporating this model as a strategy. Future studies may add moderators and mediators to explore
the impact of CSR and GSCM practices upon sustainability.

Keywords: green supply-chain-management practices; corporate social responsibility; reflective

moral attentiveness; sustainable performance; hospitality and manufacturing industries

1. Introduction
Business organizations considered the world as a limitless commodity or good. In
addition, these organizations thought that their operations had a very minor influence
upon the environment, which led to a reduction in natural resources and an increase in
environmental issues. Increases in pollution and environmental problems subsequently
pushed organizations to take serious actions to overcome these environmental issues. These
environmental issues gave birth to the concept of sustainable performance. Sustainable
performance can be divided into three factors: social, economic, and environmental [1].
Increasing rates of global warming and pollution and decreases in non-renewable resources
have driven manufacturing firms to initiate green supply-management activities, such as
green supply-chain management (GSCM), to obtain competitive advantages and ensure
sustainable performance [2]. The extension of the concept of GSCM across the supply
chain creates effective innovation in the manufacturing industries [2]. Green supply-chain
management (GSCM) has been considered as the most effective strategy for creating eco-
sustainability, in order to increase sustainable performance and reduce environmental
issues [3]. Furthermore, GSCM is integrated into environmental thinking and supply-
chain management, ranging from product design, material sources and their selection,
manufacturing processes, and the delivery of products and their end-of-life management [4].
There are studies that highlight the gaps prevailing in the literature on supply chains,
corporate social responsibility, and sustainability issues, which were overlooked in the past
studies [5–7].
During the last few decades, corporate social responsibility (CSR) has become of
great interest to researchers. Due to rapid changes in market conditions and technology,
organizations have focused on their stakeholders’ concerns regarding the environment,
sustainability, and social responsibility [5,8]. In addition, CSR is considered three different
perspectives: internal, external and environmental responsibilities [5]. The internal respon-
sibilities of firms include the safety, health, and well-being of employees, increasing the
standard and quality of their lives, on-the-job training and development, work–life balance,
and appropriate working environments. The external responsibilities of firms include iden-
tifying the social problems of societies and communities and providing solutions to these
issues. The environmental responsibilities of the firms include reducing the wastage of
natural resources, reducing emissions of carbon-dioxide gases (CO2 ), reducing the wastage
of water, energy and power, reductions in the consumption of paper, and the preservation
of natural resources [5].
The current research shows that GSCM practices and CSR are directly linked to the
sustainable performance of firms [8]. However, some researchers have identified several
linking mechanisms between GSCM, CSR, and sustainable performance, which include
organizational-level mediators, such as green climate, and individual-level mechanisms,
such as employee environmental commitment [9]. According to Garavan et al. [10], few
studies have investigated the socio-cognitive characteristics of employees as potential
linking mechanisms. Therefore, there is a need to investigate socio-cognitive characteristics
as linking and mediating mechanisms in order to establish the association between GSCM,
CSR, and sustainable performance.
This study aims to investigate the mediating effect of reflective moral attentiveness on
the relationship between GSCM, CSR, and sustainable performance. A relatively new con-
cept, RMA explains ‘the extent to which an individual chronically perceives and considers
Sustainability 2023, 15, 10528 3 of 18

morality and moral elements in his or her experience’ [9]. This study predicts that signals
communicated through GSCM practices and CSR will gain the attention of stakehold-
ers and will then be reflected in the competitive advantage and sustainable performance
they ensure.
A very important finding that emerged from the data in this study is that, with the
exception if investment recovery and CSR, all the remaining GSCM practices are potentially
effective in signaling to employees the importance of sustainability. Additionally, RMA
acts as a mediating variable between CSR, GSCM, and sustainable performance.
This paper is structured as follows. Section 1 presents the introduction and the aim
of the study. Section 2 presents relevant research and the study’s hypotheses. Section 3
includes the research methodology, study population, sampling and data-collection tools
and techniques, analytical strategy, control variables, measurement model, and interpreta-
tion. Section 4 presents the study’s findings and the structural model. Section 5 presents a
discussion of the main findings in the context of the available research. Section 6 presents
theoretical contributions. Section 7 includes the practical implications of the study. Section 8
outlines the conclusions and recommendations. Section 9 features the limitations of this
study and directions for further research.

2. Literature Review
2.1. Sustainable Performance
The concept of sustainability was first introduced by the World Commission on
Environment and Development (WCED) in 1987 [11]. Since then, it has become a topic of
interest for practitioners, academics, and researchers. The fourth industrial revolution and
frequent changes in industries have created several environmental issues, such as air and
water pollution, which firms are now interested in handling and controlling. The WCED
defines sustainability as “development that meets the present needs without compromising
the future generation’s requirements” [11].
Subsequently, Elkington [12] called sustainable performance a triple-bottom-line prin-
ciple for sustainable performance. It has three attributes, i.e., economic performance,
environmental performance, and social performance. Economic performance concerns the
financial matters and performance of firms, environmental performance is related to reduc-
ing environmental issues and wastage of resources, and social performance concerns the
welfare of employees, societies, communities, creditors, suppliers, and other stakeholders.
In the literature, more attention is given to economic and environmental performances than
social performance, which raises awareness of social issues [2].
Based on the discussion above, this study applies the triple-bottom-line principle. Ac-
cording to Yusliza et al. [1], the initiation of green objectives and their alignment with firms’
objectives would help firms to attain competitive advantages and sustainable performance.
Therefore, the socially responsible behavior of firms is as important as their economic and
environmental behavior. According to Azam et al. [13], climate changes, pressure from
stakeholders, and global warming are the issues due to which sustainability is receiving
interest from firms and explain why their senior managers are considering the importance
and significance of sustainability. Sustainability does not only include financial gains; it also
involves tackling environmental issues and taking care of employees, as well as ensuring
the well-being of societies and other stakeholders [14].

2.2. Green Supply-Chain-Management Practices

The concept of green supply-chain management was introduced by Green et al. [15]
to develop and build environmentally friendly management practices in supply chains.
Srivastava [16] states that green supply-chain-management practices include environmental
thinking in SCM. This includes different stages, i.e., product design, material sources and
selection, manufacturing processes, product delivery, and the end-of-life management of
product. According to Srivastava, initial studies only focused on green purchasing and
reverse logistic; however, subsequently, other researchers also studied green supply-chain
Sustainability 2023, 15, 10528 4 of 18

management and its environmental scope [2,17]. Although the majority of the studies
conducted on green supply-chain-management practices used GRSM, which has extensive
practical applications, no comprehensive and holistic framework has been established for
these practices at the time of writing [18].
Different authors have varying opinions about green supply-chain-management prac-
tices and their dimensions. For example, Srivastava [16] claimed that green design, green
purchasing, production, distribution, logistics, marketing, and reverse logistics are the
dimensions of GSCM. However, Luthra et al. [19] are of the view that all the product-life-
cycle phases are included in GSCM, starting from the extraction of the raw material to the
end of the product’s life cycle. Furthermore, Srivastava [16] contends that the boundaries
and limits of GSCM are dependent upon the objectives of the researcher.
In view of observations above, in this study, green supply-chain-management practices
and CSR are used as predictors, whereas sustainable performance is used as a criterion.
According to Mardani et al. [17], GSCM has five attributes, namely, internal environment
management, green purchasing, cooperation with customers, co-design, and investment
recovery, which are explained below with reference to sustainable performance.

2.2.1. Internal Environment Management (IEM) and Sustainable Performance

Internal environment management concerns the ways in which a firm’s own poli-
cies are developed and implemented to support the environment [14,20]. Activities con-
ducted by upper- and mid-level management to support environmental practices, inter-
departmental cooperation for environmental protection, and the implementation of a
system that helps to save the environment, are the activities that constitute the internal
environment management [21]. The practice of GSCM methods helps organizations to
enhance their sustainable performance. In order to reduce environmental issues, firms need
to better understand and highlight issues related to the environment, such as production
and transportation. According to Vanalle et al. [22], during the process of production,
several issues, such as waste, air, water, and soil pollution, affect the environment. There-
fore, it is crucial to control these issues. Firms can decrease the negative effects of the
production process on the environment by implementing GSCM practices. These practices
can positively influence environmental performance and community health by minimizing
the utilization of natural resources [23]. Based on the discussion above, the following
hypotheses are postulated.

Hypothesis 1 (H1). Internal environment management has a positive effect on sustainable performance.

2.2.2. Green Purchasing and Sustainable Performance

According to Kirchoff et al. [24], the integration of environmental issues into procure-
ment process is called green purchasing. This is the first step in a value-chain process. The
success of green purchasing mainly depends upon the environmental objectives of firms.
This is why green purchasing is considered the most important component and dimension
of GSCM practices [25]. The selection of the right supplier has a significant role in accom-
plishing the environmental objectives of firms; however, the selection of correct supplier is
insufficient. Firms must have a collaborative understanding with their suppliers and they
must ensure that the selected supplier meets the environmental criteria they set [26]. Green
purchasing has a positive and significant role in attaining competitive advantage through
sustainable performance [27]. Thus, this study proposes the following hypothesis.

Hypothesis 2 (H2). Green purchasing has a positive effect on sustainable performance.

2.2.3. Cooperation with Customers and Sustainable Performance

According to Green et al. [15], firms adopt GSCM practices because of pressure from
their stakeholders. The creation of green supply chains and cooperation with customers
and stakeholders are effective strategies to enhance economic, environmental, and social
Sustainability 2023, 15, 10528 5 of 18

performance. From the discussion above, it is concluded that cooperation with customers
helps firms to gain a competitive advantage and attain sustainable performance. Therefore,
the following hypothesis is proposed:

Hypothesis 3 (H3). Cooperation with customers has a positive effect on sustainable performance.

2.2.4. Eco-Design and Sustainable Performance

Eco-design is also known as green design. Eco-design minimizes the negative effects
of production on the environment [28]. Eco-design practices include product design, the
ideal consumption of energy, raw materials, the reduced use of hazardous materials, and
the generation of waste during product development [29]. Eco-design allows firms to
use solar and biodegradable energy sources to reduce environmental effects and enhance
performance [30]. According to Zhu et al. [27] eco-design gives access to green markets and
remanufacturing, which leads firms towards sustainability. This positive role of eco-design
in sustainable performance is also reported in other studies [27,29]. Thus, the following
hypothesis is postulated.

Hypothesis 4 (H4). Eco-design has a positive effect on sustainable performance.

2.2.5. Investment Recovery and Sustainable Performance

Investment recovery is a traditional practice of firms, in which excessive scrap mate-
rials, inventories, and used materials are resold [31]. The aim of investment recovery is
to recover the value of obsolete and surplus items. Firms include these items in reverse
logistical processes so that they may be disposed of correctly [31]. Reverse logistics also
include product return, reuse, and recycling, the recollecting of products from customers,
and their reuse. They are positively related to environmental performance. Therefore, firms
cannot achieve sustainability without the appropriate management of reverse logistical
processes [27,31]. Thus, the following hypotheses are developed.

Hypothesis 5 (H5). Investment recovery has a positive effect on sustainable performance.

Hypothesis 6 (H6). GSCM has a positive effect on reflective moral attentiveness.

2.3. Corporate Social Responsibility and Sustainable Performance

Corporate social responsibility leads to social, financial, environmental, and economic
improvements in performance [32]. Through CSR, firms can create a positive image of their
business in the eyes of customers and societies and may obtain competitive advantages
and sustainable performance as a result. Mughal et al. [33] has also reported a positive
relationship between CSR and financial performance. Based on the discussion above, the
following hypotheses are proposed.

Hypothesis 7 (H7). Corporate social responsibility has a positive effect on sustainable performance.
Hypothesis 8 (H8). Corporate social responsibility has a positive effect on reflective moral attentiveness.

2.4. Mediating Role of Reflective Moral Attentiveness in GSCM, CSR, and Sustainable Performance
According to the signaling theory [10], employees ignore some environmental signals
and focus on others. This process depends on the extent to which these signals are cogni-
tively accessible and important. Employees focus on the moral and ethical aspects of the
environmental and green signals communicated to them through GSCM and CSR. These
employees assess these signals through their moral lens [10].
Reflective moral attentiveness is “the intentional reflection of employees regarding
environmental issues,” which plays a major and crucial role as a mediating mechanism
between GSCM, CSR, and sustainable performance [9,10]. Therefore, it is hypothesized
that when employees are more attentive morally, they are more likely to evaluate signals.
Sustainability 2023, 15, 10528 6 of 18

In view of the discussion in the literature review, we propose that RMA is linked to
enhance sustainable performance, social responsibility behaviors, green behaviors, ethical
decision making, and reduced unethical behavior [34].

Hypothesis 9 (H9). Reflective moral attentiveness has a positive effect on sustainable performance.
Hypothesis 10 (H10). Reflective moral attentiveness mediates the positive relationship between
green supply-chain-management practices and sustainable performance.
Hypothesis 11 (H11). Reflective moral attentiveness mediates the positive relationship between
corporate social responsibility and sustainable performance.

2.5. Theoretical Framework

An eclectic theoretical approach was used to inform this study, as no single theory is
able to explain the relationship between GSCM, CSR, RMA, and sustainable performance.
Barney [35] was the first to introduce the concept of the resource-based view (RBV). The
resource-based view is used globally by researchers to report the impact of green activities,
such as green supply-chain-management practices (GSCM), on firm performance. In addi-
tion, Barney [35] claimed that internal resources help firms to gain competitive advantages
and sustainable performance. Subsequently, Jabbour [36] further explained that there are
two types of resource, i.e., tangible resources, such as buildings, equipment, and machines,
and intangible resources, such as leadership, intellectual capital, skills, creativity, and
positive social reputation. According to Hart [37], tangible resources provide temporary
competitive advantages to firms because these types of resource can easily be imitated
by competitors, whereas intangible resources are difficult to imitate as they are gained by
experience. Hart [37] noted that firms’ competitive advantages and sustainable perfor-
mance are threatened by natural environmental phenomena, such as the degradation of the
eco-system and the reduction in natural resources. The scope of the RBV was extended,
and a new typology, the natural-resource-based view (NRBV), was introduced by Hart.
According to this new approach, firms can attain competitive advantages by implanting
strategies such as the prevention of pollution, reducing the waste of water and natural
resources, and sustainable development.
According to Cankaya and Sezen [14], green supply-chain-management practices
(GSCM) can be considered as strategic resources to attain sustainable performance through
the lens of NRBV. These authors further argue that GSCM practices cannot be easily imi-
tated by competitors as these are based on experience, knowledge, and skills. For example,
it takes several years for a firm to develop a positive social image, which cannot be easily
imitated by its competitors. Similarly, Wiejithilake [38] argues that firms with green initia-
tives have more positive images, increased sales, and enhanced sustainable performance.
Therefore, firms with green activities can reduce costs, increase their capabilities, produc-
tion, and environmental performance, reduce waste, effectively manage natural resources,
and improve quality, leading to more social acceptance.
The stakeholder theory, introduced by Freeman [39], is widely used to explain the
effects of CSR on firms’ sustainable performances. Previously, firms were product-oriented
and focused only on economic performance, i.e., profitability. However, due to increases
in competition, environmental damages have led to an increase inattention to social re-
sponsibility. As social responsibility gained importance, the concept of the stakeholder
became prominent. Freeman [39] divided stakeholders into two groups, i.e., internal stake-
holders (managers, employees, and owners), and external stakeholders (creditors, society,
customers, clients, government, competitors, and suppliers). The stakeholder theory argues
that firms should meet the expectations of their stakeholders in an efficient and effective
way. Stakeholders with an awareness of the environment and green activities desire busi-
ness firms that behave ethically and show positive attitudes towards both environmental
and social issues, along with economic performance. Therefore, it is essential for firms
to initiate green practices to establish better relationships with stakeholders. Based on
 two groups, i.e., internal stakeholders (managers, employees, and owners), and external
stakeholders (creditors, society, customers, clients, government, competitors, and
suppliers). The stakeholder theory argues that firms should meet the expectations of their
stakeholders in an efficient and effective way. Stakeholders with an awareness of the
environment and green activities desire business firms that behave ethically and show
Sustainability 2023, 15, 10528 positive attitudes towards both environmental and social issues, along with economic 7 of 18

performance. Therefore, it is essential for firms to initiate green practices to establish

better relationships with stakeholders. Based on the discussion above, an eclectic
theoretical
the approach
discussion above,was used totheoretical
an eclectic investigateapproach
the roles was
of GSCM practices,
used to CSR,the
investigate and RMA
roles of
in sustainable
GSCM performance
practices, CSR, and RMA(Figure 1).
in sustainable performance (Figure 1).

1. Theoretical framework.
Figure 1.

3.
3. Materials
Materials and
and Methods
Methods
3.1. Population, Sampling, and Data-Collection Methods
3.1. Population, Sampling, and Data-Collection Methods
This was a quantitative study. Survey approach was used in this study. The nature of
This was a quantitative study. Survey approach was used in this study. The nature of
the data was cross-sectional, i.e., data were collected at one point intime. The primary data
the data was cross-sectional, i.e., data were collected at one point intime. The primary
were collected during 2022 and 2023 through self-administered questionnaire.
data were collected during 2022 and 2023 through self-administered questionnaire.
The population of this study comprised employees inhospitality and manufacturing
The population of this study comprised employees inhospitality and manufacturing
industries in Khyber Pakhtunkhwa province, Pakistan. The industries included, cement,
industries
sugar, in Khyber
hospitality, Pakhtunkhwa
leather, furniture,province, Pakistan. The
textiles, agriculture, industries
food included,
and beverages, cement,
dairy, and
sugar, hospitality, leather, furniture, textiles, agriculture, food and beverages,
plastic. Manufacturing and hospitality firms were chosen because they are most closely dairy, and
plastic. Manufacturing and hospitality firms were chosen because they are
related to environmental issues. More than 3 million firms are registered, of which ap-most closely
related to environmental
proximately issues. More firms
19.72% are manufacturing than 3while
million
22.3%firms
are are registered,
hospitality of hotels,
firms, which
approximately 19.72% are manufacturing firms while 22.3% are hospitality
and restaurants. Non-probability convenience-sampling technique was used to select thefirms, hotels,
sample size. The firms which were listed on Pakistan stock exchange were selected for the
current study. The reason for these criteria is that their employees had knowledge and
awareness about benefits of green activities and were able to answer all the items on the
questionnaire easily.
In total, 500 employees from manufacturing and hospitality firms were selected and,
after obtaining permission from relevant departments, questionnaires were distributed to
relevant employees. Respondents were assured that this study was for academic purposes
and data and identity of the respondents would be kept confidential. Questionnaires were
sent via post to respondents who lived far away and return envelope were attached with
specific codes to avoid duplication. In total, 380 completed questionnaires were received
by researchers, yielding a response rate of 76%.
From Table 1, it is evident that majority of participants in the study were male, totaling
344 (90.5%), while 36 (9.5%) were female. Further, respondents were asked about their age,
and it was found that majority of the respondents were aged 46–55 years (140 (36.8%)),
followed by the age group of 56 and above (118 (31.15)). Sixty-seven (17.6%) respondents
belonged to age group of 36–40 years, and 49 (12.9%) were 31–35 years old, while only 6
(1.65) were 25–30 years of age. Moreover, regarding education, majority of the respondents
were educated to Master’s level 286 (75.3%), followed by those with undergraduate edu-
cation 71 (18.7%); in total, 21 (5.52%) respondents had doctoral degrees and only 2 (0.55)
had diploma-level education. Respondents were also asked about experience and length of
service. It was revealed by the results that 137 (36.1%) respondents had 6–10 years of expe-
Sustainability 2023, 15, 10528 8 of 18

rience, followed by those with 11–15 years of experience (99 (26.1%)). Seventy-two (18.9%)
respondents had 16–20 years of experience and 59 (15.55) had 1–5 years of experience,
while only 13 (3.45) had more than 20 years of experience. A further analysis of data results
indicated that employees who participated in the survey from sugar and cement industry
numbered 95 (25%), while hospitality, tourism, and leisure industry accounted for 57 (15%),
food and beverages for 68 (18%), leather for 46 (12%), textiles for 19 (5%), agriculture and
fruit processing for 53 (14%), furniturefor27 (7%), and construction industry for 15 (4%).

Table 1. Sample Characteristics.

Variables n %
Male 344 90.5
Female 36 9.5
25 to 30 years of age 6 1.6
31–35 years of age 49 12.9
36–40 years of age 67 17.6
46–55 years of age 140 36.8
56 and above 118 31.1
Diploma education 2 0.5
Undergraduate education 71 18.7
Master’s education 286 75.3
Doctoral education 21 5.52
1–5 years of experience 59 15.5
6–10 years of experience 137 36.1
11–15 years of experience 99 26.1
16–20 years of experience 72 18.9
Over 20 years of experience 13 3.4
Industry Type
Sugar and cement 95 25
Hospitality, tourism, and leisure 57 15
Food and beverages 68 18
Leather 46 12
Textiles 19 5
Agriculture and fruit processing 53 14
Furniture 27 7
Construction 15 4

3.2. Measurement
All the validated questionnaires were adopted from previous studies. For instance,
sustainable-performance instrument was validated in several studies, such as those by
Yusliza et al. [1] and Yong et al. [40]. It is a seven-point Likert scale ranging from 1 = not at all
to 7 = to great extent, with three constructs: economic performance (5 items), environmental
performance (5 items), and social performance (5 items). In total, the questionnaire has
15 items. Green supply-chain management scale, adopted from Micheli et al. [2], is a
20-item scale, with seven-point scale ranging from 1 = not considering to 7 = implementing
successfully. Corporate social responsibility scale, adopted form Abbas et al. [5], it’s a
four-item scale ranging from 1 = strongly disagree to 7 = strongly agree. Reflective moral
attentiveness questionnaire was adopted from Garavan et al. [10]. It has six items. After
Sustainability 2023, 15, 10528 9 of 18

CFA, one item of CSR, one item of RMA, and one item of IR were excluded due to low
factor loadings. Details of all variables and respective items are given in Table 2.

Table 2. Summary of the variables.

S# Variables No. of Items Questioners Sources

Micheli et al., 2020; Azam et al.,
Internal environment management
1 6 2022; Cankaya and Sezen, 2019
(IEM)
[2,13,14]
Micheli et al., 2020; Azam et al.,
2 Green purchase (GP) 5 2022; Cankaya and Sezen, 2019
[2,13,14]
Micheli et al., 2020; Azam et al.,
3 Eco-design (ECO-D) 3
2022 [2,13]
Care/cooperation with customers Micheli et al., 2020; Azam et al.,
4 3
(CC) 2022 [2,13]
Micheli et al., 2020; Azam et al.,
5 Investment recovery (IR) 2 2022; Cankaya and Sezen, 2019
[2,13,14]
6 Corporate social responsibility (CSR) 3 Abbas et al., 2019 [5]
7 Reflective moral attentiveness (RMA) 5 Garavan et al., 2022 [10]
Sustainable performance (SP)
Economic performance (ECP),
8 15 Yong et al., 2019; [40]
environmental performance (ENP) &
Social performance (SCP)

3.3. Data-Analysis Techniques

We used Smart PLS-SEM software, a form of second-generation structural-equation-
modeling software that can test the measurement model and structural model simultane-
ously [41]. According to Ramayah et al. [42] and Hair et al. [43], this software is suitable for
testing complex structural-equation models. The PLS-SEM is a second-generation statistical
software/package for analyzing complex and difficult models. This software is one of
the most advanced tools for helping researchers to obtain sophisticated statistical results.
Smart PLS is suitable for non-normal as well as small data sets. In the first step, researchers
have to develop a measurement model in which confirmatory factor analysis (CFA) needs
to be run. In CFA factor loadings >0.70, AVE > 0.5, CR > 0.7, and alpha value > 0.70 are
investigated. If an item is found to be problematic and does not meet the threshold, then it
maybe excluded to obtain the model with the best fit. In CFA, convergent validity (AVE and
CR) is investigated, followed by discriminant validity. In addition, once researchers find
the model with the best fit in CFA, they can proceed to structural model, in which hypothe-
ses can be tested through bootstrapping, t-statistics, lower- and upper-limit confidence
intervals, and significance values.

3.4. Control Variables

We included three control variables, age, gender, and experience in the research model.
Past studies reported that gender, age, and experience play significant roles in predicting
green behavior and obtaining sustainability [44]. As part of our analysis, we checked
the impact of age, gender, and experience on sustainable performance and found that all
control variables had insignificant influences on sustainable performance.

3.5. Measurement Model

Hair et al. [43] provided the guidelines we used to assess the measurement model by
assessing first the loadings (≥0.7) (Appendix A), average variance extracted (≥0.50), and
composite reliability (≥0.70) (see Table 3). Since we had a second-order construct (bolded),
Sustainability 2023, 15, 10528 10 of 18

Sustainable Performance (3 dimensions, italics), we assessed the validity and reliability

of the first-order constructs as well as assessing the validity and reliability of the second-
order constructs. Thus, based on the values presented in Table 3, we can conclude that
we had sufficient convergent validity and reliability (Figure A1, Appendix B). Moreover,
highest mean value was scored by investment recovery, M = 6.468, S.D = 0.998, followed by
eco-design, M = 6.299, S.D = 1.030, and environmental performance M = 6.159, S.D = 1.128.
Care for customers, social performance, and sustainable performance also displayed mean
values higher than 6, while remaining constructs scored mean values between 5.4 and
5.7. To assess discriminant validity, we used the HTMT ratio, as suggested by Franke and
Sarstedt [45] and Cho Chung, Young [46]. According to the guidelines, if the HTMT ratios
are ≤0.85 or <1 [43], then we can conclude that discriminant validity has been achieved.
As shown in Table 4, all the HTMT ratios met the threshold; thus the measures in our study
had good discriminant validity.

Table 3. Descriptions and quality of measurement items.

Constructs Mean Std Dev. Kurtosis Skewness CR AVE

CC 6.049 1.288 −0.139 −1.005 0.949 0.861
CSR 5.732 1.582 −0.472 −0.982 0.970 0.915
ECO-D 6.299 1.030 1.096 −1.077 0.945 0.851
GP 5.774 1.653 −0.663 −0.986 0.983 0.921
IEM 5.740 1.659 −0.579 −1.017 0.984 0.914
IR 6.468 0.998 1.141 −1.137 0.985 0.970
RMA 5.405 0.952 3.347 −1.771 0.896 0.633
SP 6.013 1.210 −1.176 −0.717 0.987 0.821
ENP 6.159 1.128 0.045 −1.084 0.970 0.868
ECP 5.758 1.509 −1.078 −0.733 0.975 0.885
SCP 6.067 1.213 −0.776 −0.642 0.965 0.847

Table 4. Discriminant validity.

Variables 1 2 3 4 5 6 7 8 9
1. CC
2. CSR 0.837
3. ECOD 0.888 0.731
4. ECP 0.928 0.931 0.773
5. ENP 0.948 0.917 0.856 0.990
6. GP 0.924 0.941 0.765 0.966 0.966
7. IEM 0.881 0.973 0.729 0.964 0.959 0.986
8. IR 0.879 0.939 0.780 0.945 0.970 0.955 0.953
9. RMA 0.048 0.113 0.030 0.063 0.056 0.079 0.084 0.064
10. SCP 0.943 0.937 0.799 0.996 0.975 0.972 0.971 0.948 0.051

4. Structural Model
To test the hypotheses, we developed the structural model in PLS-SEM, and we ran
a bootstrapping procedure with 5000 resamples to generate the standard errors, t-values,
p-values, and bias-corrected confidence intervals [43]. First, we assessed the variance
explained in our model. The R2 was 0.957 (Q2 = 0.845), indicating that the model can
explain 95.7% of the variance in Organizational Performance, and the predictive relevance
Q2 was 0.845, which was greater than 0, indicating the sufficient predictive relevance of
our model. Internal Environmental Management (β = 0.407, p < 0.01), Green Purchasing
(β = 0.147, p < 0.05), Cooperation with Customers (β = 0.283, p < 0.01), and Eco-Design
(β = 0.140, p < 0.01) were positively related to Sustainable Performance, while Investment
Recovery and Corporate Social Responsibility were not significant. These results supported
H1, H2, H3, and H4, while H5 was not supported. The GSCM had a positive influence
on the RMA (β = 0.221, p < 0.01), supporting H6; the CSR had a positive influence on the
SP (β = 0.023, p > 0.05), so H7 was not supported; the CSR had a positive influence on the
Sustainability 2023, 15, 10528 11 of 18

RMA (β = 0.666, p < 0.01), so H8 was supported; and the RMA had a positive influence on
the SP (β = 0.852, p < 0.01), so H9 was supported (see Table 5). A further analysis of the
indirect effects revealed that the RMA mediated between the GSCM and the SP (β = 0.188,
p < 0.01) and between the CSR and the SP (β = 0.568, p < 0.01).Thus, H10 and H11 were also
substantiated. The most important and dominant predictor of Sustainable Performance was
the effect of RMA on SP because this showed highest beta value. These findings highlight
the important role of reflective moral attentiveness (see Tables 5 and 6).

Table 5. Hypotheses testing.

Hypothesis Relationship Std Beta S.E t-Value p-Value BCI LL BCI UL Support
H1 IEM→SP 0.407 0.093 4.380 0.000 0.259 0.566 Yes
H2 GP→SP 0.147 0.086 1.723 0.043 0.013 0.294 Yes
H3 CC→SP 0.283 0.055 5.168 0.000 0.207 0.376 Yes
H4 ECOD→SP 0.140 0.026 5.378 0.000 0.093 0.178 Yes
H5 IR→SP 0.040 0.025 1.605 0.055 −0.004 0.075 No
H6 GSCM→RMA 0.221 0.05 4.427 0.000 0.128 0.137 Yes
H7 CSR (SP) 0.023 0.050 0.453 0.325 −0.064 0.102 No
H8 CSR (RMA) 0.666 0.047 14.133 0.000 0.578 0.75 Yes
H9 RMA (SP) 0.852 0.018 47.97 0.000 0.817 0.886 Yes
Age (SP) 0.063 0.045 1.40 0.161 −0.02 0.159 No
Control Gender (SP) 0.02 0.021 0.006 0.32 −0.02 0.059 No
Variables Experience (SP) −0.091 0.049 1.833 0.067 −0.2 0.002 No

Table 6. Indirect effects (mediation effects).

Indirect Relationships Std Beta S.E T P BCI LL BCI UL Support

H10 GSCM→RMA→SP 0.188 0.043 4.344 0.000 0.11 0.274 Yes
H11 CSR→RMA→SP 0.568 0.042 13.671 0.000 0.494 0.649 Yes

5. Discussion
Based on the signaling theory, NRBV, and stakeholder theory, the current study hy-
pothesized that GSCM practices and CSR would have a positive influence on sustainable
organizational performance with the mediating effect of reflective moral attentiveness. The
results revealed that only four dimensions of GSCM practices, i.e., internal environment
management, green purchasing, cooperation with customers, and eco-design, have a pos-
itive and significant effect on sustainable performance, while investment recovery and
CSR have insignificant effects on sustainable performance. The majority of the studies
conducted in this area supported this argument. For example, Cankaya and Sezen [14],
Micheli et al. [2], and Schmidt et al. [29] reported positive effects of GSCM practices on
sustainable organizational performance. This implies that GSCM practices may provide
competitive advantages and ensure sustainable performance.
This study found that internal environment management has a significant effect on
the triple bottom line, i.e., sustainable performance (SP). If firms wish to make their supply
chains green, first, they need to undertake initiatives in internal environmental management.
They need to collaborate and integrate with all the members of the SC. Azam et al. [13]
reported that IEM is a successful driver of triple bottom line, i.e., sustainable performance.
They also indicated that firms with serious concerns over environmental issues implement
environmental initiatives to ensure successful GSCM [13,46]. Moreover, Micheli et al. [2]
and Cankaya and Sezen [14] also found a significant role of IEM in sustainability. Therefore,
it was proven that IEM plays an important role in sustainable performance in hospitality
and manufacturing industries. Thus, H1 was supported.
In terms of the relationship between green purchasing and sustainable organizational
performance, this study found that green purchasing has a significant impact on sustainable
organizational performance, the purchasing activities of firms, environmental efforts, and
Sustainability 2023, 15, 10528 12 of 18

the objectives of firms. The selection of the correct supplier is one of the most important
steps in procurement processes. The choice of the correct supplier can have a significant
impact on a firm’s environmental objectives. Once a firm chooses its suppliers, appropriate
strategic and collaborative understanding should be established between these suppliers
and the firm. The suppliers must meet the environmental criteria of the firm [2]. By
contrast, Zhang et al. [27] and Cankaya and Sezen [14] argued that as green purchasing is
an external GSCM dimension, a single firm cannot completely implement this dimension
of GSCM. Malik et al. [47] suggested that dominant firms can play a role in the successful
implementation of this dimension. Therefore, the role of green purchasing in sustainability
was proven. Thus, H2 was supported.
A further analysis of the results revealed that cooperation and collaboration with
customers, suppliers, and external stakeholders are considered effective tools for GSCM
practices to achieve sustainable performance. Cooperation must be established between all
the departments in a firm and its customers and stakeholders to deal with environmental
issues and attain competitive advantages. Firms must keep close relationships with their
customers and suppliers and support them to implement environmental practices. Firms
can learn about the changing trends and demands of customers, as well as the concerns
of customers and suppliers over environmental issues, by maintaining close relationships
with these customers [48]. Thus, H3 was supported.
This study also found a positive relationship between eco-design and sustainable
performance. Eco-design allows firms to use efficient friendly energy resources, such
as solar energy and biodegradable sources to reduce environmental issues and enhance
sustainable performance. Eco-design practices might help organizations to access green
markets. This finding is in line with the results of some studies [2,14], but contradicts those
of Esfahbodi et al. [49], who found no relationships between eco-design and economic
performance. This might have been due to the fact that, since eco-design activities initially
require financial resources and capital, firms consider the cost burdens. Therefore, the role of
eco-design in sustainable performance was apparent in this study. Thus, H4 was supported.
Furthermore, H5, i.e., the relationship between investment recovery and sustainable
performance, was not supported in this study, as there was no significant relationship
between investment recovery and sustainable performance. This finding is in line with the
findings of earlier studies that indicated that investment recovery is less attractive in devel-
oping economies [49]. Recycling activities require huge investment and, due to the lack of
recycling infrastructure, developing economies do not invest in these activities. This could
be a reason why the GSCM did not have any significant effects on sustainable performance.
According to Geng et al. [28], advances in technology and more investments are required
for manufacturing and hospitality firms. Therefore, H5 was not supported. This study also
shows that green supply-chain-management practices have significant effects on reflective
moral attentiveness. The initiation of green activities in supply chains sends signals to
employees to take care of the environment, highlighting the ethical aspect of the supply
chain. Furthermore, the RMA shows the extent of employees’ ethical and moral values.
This finding is also in line with the findings of Garavan [10]. Thus H6 was substantiated.
The current study did not find any relationships between corporate social responsi-
bility (CSR) and sustainable performance. Organizations always aim to attract investors;
however, before investing in a firm, investors investigate the firm’s annual financial reports
and statements. Some investors consider CSR a burden on their profits and do not invest
in firms that are actively involved in CSR activities [33,34]. This could be a reason for the
insignificant relationship between CSR and SP. Thus, H8 was substantiated. Moreover, this
study found that RMA is positively related with sustainable performance. This finding is
in line with Sturm’s study [50], which found that RMA is responsible for enhancing socially
responsible behaviors and helps firms to achieve competitive advantages and enhanced
sustainable performance. Thus, H9 was supported. This study also found a mediating
effect of RMA, which revealed a positive and significant effect on the relationship between
GSCM, CSR, and sustainable performance.
Sustainability 2023, 15, 10528 13 of 18

6. Theoretical Contributions
This study contributed to the literature on GSCM practices, CSR, and RMA in several
ways. First, using the socio-cognitive characteristics of employees’ perceptions, such as
reflective moral attentiveness, through the lens of signaling theory, this study found that
GSCM and CSR influence employees’ RMA, which, in turn, affects sustainable performance.
This confirms the validity of RMA as a linking mechanism. The application of this construct
in a non-Western context through the revelation of its value by linking it to four GSCM
practices (except investment recovery) and sustainable performance is relatively new in the
literature. It is suggested that when GSCM practices and CSR contain moral and ethical
signals, they have significant effects in that they prompt morally attentive employees to
develop positive and productive feelings about environmental and green issues. Overall,
this finding highlights the importance of the cognition of employees in obtaining sustainable
performance. Second, the use of control variables such as age, gender, and experience in this
research model showed no significant effects. Third, CSR is indirectly related to sustainable
performance through linking mechanisms such as RMA. Since RMA is responsible for
enhanced socially responsible behavior [50], the indirect role of RMA in the relationships
between CSR and sustainable performance is confirmed. This also confirms the reliability
and validity of RMA as a mediating variable, which is anew construct in the literature on
GSCM [10].

7. Conclusions
In terms of findings and results, internal environment management, green purchas-
ing cooperation with customers, and eco-design has significant influences on sustainable
organizational performance. By contrast, investment recovery and corporate social re-
sponsibility have insignificant effects on sustainable performance. Furthermore, GSCM
and its four dimensions (internal environmental management, eco-design, co-operation
with customers, and green purchases) were found to be responsible for enhancing sus-
tainable performance. Investment recovery was not found to be a significant predictor of
sustainable performance. This study also shows that CSR is not significantly related to
sustainable performance.
Based on the discussion above, it is concluded that green activities and sustainable
performance are receiving attention from firms, researchers, and academics. Therefore,
firms focus on green supply-chain-management practices to obtain competitive advantages
and ensure sustainable performance.

8. Practical Implications
The findings of this study provide implications for policy and practice in the hospitality
and manufacturing industries. A number of firms in developing economies are interested
in avoiding economic risks and in improving their economic situation. However, it is
not possible for firms to prefer short-term benefits and expect to survive in the long term
by ignoring environmental and social issues. This study highlights the significance and
importance of maximizing profits, but firms must also consider social benefits. To this end,
managers must conduct cost–benefit analyses. With the implementation of GSCM practices,
some costs increase, including investment, procurement, and training costs, while other
costs reduce. Firms need to establish close relationships with their suppliers and provide
them support in environmental practices.
Another aspect of GSCM practices that has received limited attention from manufac-
turing and hospitality firms is investment recovery. This limitation is due to the fact that
investment recovery requires initial capital to initiate recycling activities. Once investment
recovery is initiated, it helps to reduce overall costs by reducing the wastage of materials
and energy. Managers can increase the economic performances of their firms by considering
the advantages of green activities and reducing the negative impact of production processes
on the environment.
Sustainability 2023, 15, 10528 14 of 18

Furthermore, CSR activities are not sources of expenditure, but rather sources of
investment and management strategies to enhance performance and obtain competitive
advantages [46]. Managers and firms are encouraged to invest in community services
through donations, social welfare support, free education, and the provision of free food,
especially during crises and emergency situations. Firms should increase investment in
CSR activities to help people during crises and emergencies. Investment in social activities
under CSR helps firms to attract more investors and customers and to enhance their
economic performance. Furthermore, CSR creates positive images of firms in the eyes of
other stakeholders.
Corporate social responsibility has several benefits for firms, such as the retention
of talented staff, who are made to feel important through their membership of ethical
firms, leading to increases in firm performance. Managers might establish close and
better relationships with creditors, suppliers, and other stakeholders to obtain competitive
advantages and attain sustainable performance by controlling environmental issues. This
increases the sale of their products and services through CSR. Furthermore, CSR helps
these firms to raise the living standards of societies.

9. Limitations and Future Research Directions

This study focused on the manufacturing and hospitality industries; therefore, its
findings are only generalizable to these industries. Future studies may include retailers
and wholesalers. Furthermore, this study analyzed cross-sectional data using PLS-SEM
software. Future studies may use longitudinal and qualitative data to obtain a more in-
depth understanding of this phenomenon. It is recommended that green educations are
included in future frameworks.
This study investigated the indirect impact of the role of RMA in CSR and GSCM
practices on sustainable performance. Future studies may be conducted on moderators
such as environmental dynamism, social control, supply-chain partners, and supplier
involvement, as well as mediators such as green intellectual capital. Similarly, CSR was
used as a predictor in this study; it is suggested that further studies focus on corporate
citizenship, stakeholder management, business ethics, the creation of shared values, and
company values.

Author Contributions: Conceptualization, Y.H.M. and R.T.; methodology, Y.H.M. and R.T.; software,
Y.H.M. and R.T.; validation, R.T.; formal analysis, Y.H.M.; writing—review and editing, K.S.N., M.A.,
F.A., M.A.C. and S.Y.M. All authors have read and agreed to the published version of the manuscript.
Funding: This research received no external funding.
Institutional Review Board Statement: The ethical committee of (IRB & EC) of Faculty of Social
Sciences and Humanities (FSSH) of Shifa Tameer-e-Millat University, has reviewed and approved.
And study was conducted in accordance with the declaration of Helsinki.
Informed Consent Statement: Informed consent was obtained from all subjects involved in the study.
Data Availability Statement: Data can be provided, on request, by the corresponding author.
Conflicts of Interest: The authors declare no conflict of interest.
Sustainability 2023, 15, 10528 15 of 18

Appendix A

Table A1. Confirmatory-factor analysis (factor loadings and Alpha values).

Item Descriptions Item No. Loadings Cronbach’s Alpha Values

Cross-functional cooperation for environmental improvements IEM1 0.933 0.981
Special training for workers on environmental issues IEM2 0.950
ISO 14000 certification IEM3 0.968
Eco-labeling of products IEM4 0.959
The internal performance-evaluation system incorporates
IEM5 0.958
environmental factors
Generate environmental reports for internal evaluation IEM6 0.966
Cooperation with suppliers for environmental objectives GP1 0.964
Environmental audit for suppliers’ inner management GP2 0.971
Suppliers’ ISO 14000 certification GP3 0.965 0.979
Suppliers are selected using environmental criteria GP4 0.928
Provision ofdesign specifications to suppliers that include
GP5 0.970
environmental requirements for purchased items
Cooperation with customers for cleaner production CC1 0.925
Cooperation with customers to useless energy during product
CC2 0.911 0.919
transportation
Cooperation with customers for reverse logistical relationships CC3 0.947
Design of products for reuse, recycle, recovery of material, and
ECO-D1 0.924
component parts
Design of products to avoid or reduce use of hazardous products ECO-D2 0.912 0.913
Design of processes for minimization of waste ECO-D3 0.932
Collection and recycling of end-of-life products and materials IR1 0.985
Investment recovery (sale) of excess inventories/materials IR2 0.985 0.969
This firm is very concerned with environmental protection. CSR1 0.954
This firm is very concerned with customers’ benefits CSR2 0.952 0.953
This firm actively participates in social initiatives CSR3 0.963
I regularly think about the ethical implications of my decisions RMA1 0.748
I think about the morality of my actions almost every day RMA2 0.837
I often find myself pondering about ethical issues RMA3 0.818 0.856
I often reflect on the moral aspects of my decisions RMA4 0.797
I like to think about ethics RMA5 0.779
Improved compliance with environmental standards ENP1 0.968
Reduction in airborne emissions ENP2 0.956
Reduction in consumption of hazardous materials ENP3 0.946 0.962
Reduction in energy consumption ENP4 0.892
Reduction in material usage ENP5 0.893
Decrease in costs for of purchases of materials. ECP1 0.947
Decrease in cost of energy consumption ECP2 0.924
Decrease in fees for waste treatment ECP3 0.952
Decrease in fees for waste treatment ECP4 0.943 0.967
Decrease in fines for environmental accidents ECP5 0.936
Improved overall stakeholder welfare SCP1 0.903
Improvement in community health and safety SCP2 0.933 0.955
Reduction in environmental effects and risks to the general public. SCP3 0.920
Improved occupational health and safety of employees SCP4 0.934
Improved awareness and protection of the claims and rights of people
SCP5 0.912
in the community served
Second-Order SP
ENP 0.981 0.986
ECP 0.988
SCP 0.981
 Sustainability 2023, 15, 10528 16 of 18

Sustainability 2023, 15, x FOR PEER REVIEW 17 of 19

Appendix B

Figure A1. A1.

Figure Overall best-fitting
Overall model.
best-fitting model.

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