From ESG Practices to Competitive Advantage: The Mediating Role of Green Process Innovation and the Moderating Effect of Organizational Commitment

Abstract

Purpose – This research investigates the impact of environmental, social, and governance (ESG) practices on competitive advantage. It further explores green process innovation (GPI) as a mediating factor within this relationship. Additionally, the study analyzes organizational commitment as a moderator that can either enhance or mitigate the effect of ESG practices on GPI and, ultimately, on competitive advantage. The focus of the study is on public sector energy companies in India.

Design/methodology/approach – Online survey data was collected form 300 working professional belonging to Indian public sector energy enterprises. Data was gathered via a structured survey conducted between September and December 2024. The conceptual model was developed and tested using partial least square structural equation modelling (PLS-SEM)

Findings – The findings indicate that ESG practices have a significant and positive effect on both green process innovation and competitive advantage. Additionally, green process innovation serves as a partial mediator in the relationship between ESG practices and competitive advantage, thus enhancing the strategic impact of adopting ESG initiatives. Furthermore, the moderating analysis demonstrates that organizational commitment significantly strengthens the connection between ESG practices and green process innovation.

Originality/value – This study enhances the existing literature on ESG practices within public sector enterprises, specifically in the energy sector. We offer new insights into the practical implementation of ESG efforts to achieve a sustainable competitive advantage in resource-intensive industries like energy. Our findings provide actionable recommendations for policymakers and managers seeking to align sustainability initiatives with organizational performance goals.