Green HRM’s Influence on Sustainable Business Performance: Green Innovation Mediation among Indonesian Green Entrepreneurship Start-ups
Keywords:
Green Human Resource Management, Green Innovation, Start-ups, Sustainable Business Performance
Abstract
This study examines how Green Human Resource Management (Green HRM) may contribute to Sustainable Business Performance among green entrepreneurship start-ups in Indonesia, with Green Innovation proposed as a mediating mechanism. Drawing on the Natural Resource-Based View and the Ability–Motivation–Opportunity framework, the study develops a model linking recruitment, training, performance management, rewards, and employee involvement with green product and process innovation. Sustainable Business Performance is conceptualized through economic, environmental, and social dimensions. A quantitative design using a questionnaire and partial least squares structural equation modeling is proposed to assess the relationships and the indirect effect through Green Innovation. The framework suggests that Green HRM can strengthen employees’ environmental capabilities and motivation, enabling start-ups to translate environmental knowledge into products and processes that improve resource efficiency and business value. Human resource practices may contribute to sustainability through pathways beyond innovation, including employee participation and more responsible operational routines. The study connects human resource management, green innovation, and multidimensional business performance in entrepreneurial firms. Its empirical contribution will depend on testing the proposed relationships with verified company-level data. The findings may inform research and practical managerial decisions on embedding sustainability within start-up practices.
References
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Yuliza, Y., & Musa, H. (2025). Building green performance through green HRM and green transformational leadership: The mediation role of green innovation. Asian Management and Business Review, 5(2), 247–261. https://doi.org/10.20885/AMBR.vol5.iss2.art1
Zhao, F., Kusi, M., Chen, Y., Hu, W., Ahmed, F., & Sukamani, D. (2021). Influencing mechanism of green human resource management and corporate social responsibility on organizational sustainable performance. Sustainability, 13(16), Article 8875. https://doi.org/10.3390/su13168875
Aftab, J., & Veneziani, M. (2024). How does green human resource management contribute to saving the environment? Evidence of emerging market manufacturing firms. Business Strategy and the Environment, 33(2), 529–545. https://doi.org/10.1002/bse.3508
Al-Shammari, A. S. A., Alshammrei, S., Nawaz, N., & Tayyab, M. (2022). Green human resource management and sustainable performance with the mediating role of green innovation: A perspective of new technological era. Frontiers in Environmental Science, 10, Article 901235. https://doi.org/10.3389/fenvs.2022.901235
Alshuaibi, M. S. I., Alhebri, A., Khan, S. N., & Sheikh, A. A. (2024). Big data analytics, GHRM practices, and green digital learning paving the way towards green innovation and sustainable firm performance. Journal of Open Innovation: Technology, Market, and Complexity, 10(4), Article 100396. https://doi.org/10.1016/j.joitmc.2024.100396
Amrutha, V. N., & Geetha, S. N. (2020). A systematic review on green human resource management: Implications for social sustainability. Journal of Cleaner Production, 247, Article 119131. https://doi.org/10.1016/j.jclepro.2019.119131
Appelbaum, E., Bailey, T., Berg, P., & Kalleberg, A. L. (2000). Manufacturing advantage: Why high-performance work systems pay off. Cornell University Press.
ASEAN Green Economy Landscape. (n.d.). Indonesia. https://www.aseangreeneconomy.com/en/page/indonesia-en
Asian Development Bank. (2023). Indonesia’s technology startups: Voices from the ecosystem. https://doi.org/10.22617/TCS230176-2
Bindeebaa, D. S., Bakashabaa, R., Tukamushaba, E. K., & Atuhaire, S. (2025). From green HRM to sustainable business performance: A two-stage meta-analytic SEM of the mediating role of green innovation. Cogent Business & Management, 12(1), Article 2536678. https://doi.org/10.1080/23311975.2025.2536678
BPS-Statistics Indonesia. (n.d.). Greenhouse gas emissions by sector type (thousand tonnes of CO₂e), 2000–2023. https://www.bps.go.id/id/statistics-table/1/MjA3MiMx/emisi-gas-
Chen, Y.-S., Lai, S.-B., & Wen, C.-T. (2006). The influence of green innovation performance on corporate advantage in Taiwan. Journal of Business Ethics, 67(4), 331–339. https://doi.org/10.1007/s10551-006-9025-5
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
Hart, S. L. (1995). A natural-resource-based view of the firm. Academy of Management Review, 20(4), 986–1014. https://doi.org/10.5465/amr.1995.9512280033
Hourneaux, F., Jr., Gabriel, M. L. da S., & Gallardo-Vázquez, D. A. (2018). Triple bottom line and sustainable performance measurement in industrial companies. REGE Revista de Gestão, 25(4), 413–429. https://doi.org/10.1108/REGE-04-2018-0065
Kuo, Y.-K., Khan, T. I., Islam, S. U., Abdullah, F. Z., Pradana, M., & Kaewsaeng-on, R. (2022). Impact of Green HRM practices on environmental performance: The mediating role of green innovation. Frontiers in Psychology, 13, Article 916723. https://doi.org/10.3389/fpsyg.2022.916723
Kyei-Frimpong, M., Suleman, A.-R., & Akwetey-Siaw, B. (2024). The role of green innovation in the relationship between green HRM practices and sustainable business performance: Evidence from the mining industry. Asia-Pacific Journal of Business Administration, 16(5), 1112–1131. https://doi.org/10.1108/APJBA-09-2023-0471
Makumbe, W. (2024). Green human resources management and green performance: A mediation–moderation mechanism for green innovation and green knowledge sharing. Sustainability, 16(24), Article 10849. https://doi.org/10.3390/su162410849
Muisyo, P. K., & Qin, S. (2021). Enhancing the firm's green performance through green HRM: The moderating role of green innovation culture. Journal of Cleaner Production, 289, Article 125720. https://doi.org/10.1016/j.jclepro.2020.125720
Munawar, S., Yousaf, H. Q., Ahmed, M., & Rehman, S. (2022). Effects of green human resource management on green innovation through green human capital, environmental knowledge, and managerial environmental concern. Journal of Hospitality and Tourism Management, 52, 141–150. https://doi.org/10.1016/j.jhtm.2022.06.009
Mustafa, F., Arshad, S., Iqbal, A., & Khan, S. N. (2022). The influence of Green HRM on environmental performance: The mediating effect of green innovation and moderating effect of environmental strategy. International Journal of Business and Economic Affairs, 7(4), 34–44. https://doi.org/10.24088/IJBEA-2022-74003
Ratnamiasih, I., Ridwan, M., & Septiawan, B. (2022). Factors influencing green human capital to improve green performance in Indonesian start-up business. Indonesian Journal of Sustainability Accounting and Management, 6(1), 71–81. https://doi.org/10.28992/ijsam.v6i1.488
Rustiarini, N. W., Bhegawati, D. A. S., & Mendra, N. P. Y. (2022). Does green innovation improve SME performance? Economies, 10(12), Article 316. https://doi.org/10.3390/economies10120316
Sarstedt, M., Hair, J. F., Pick, M., Liengaard, B. D., Radomir, L., & Ringle, C. M. (2022). Progress in partial least squares structural equation modeling use in marketing research in the last decade. Psychology & Marketing, 39(5), 1035–1064. https://doi.org/10.1002/mar.21640
Shoaib, M., Abbas, Z., Yousaf, M., Zámečník, R., Ahmed, J., & Saqib, S. (2021). The role of GHRM practices towards organizational commitment: A mediation analysis of green human capital. Cogent Business & Management, 8(1), Article 1870798. https://doi.org/10.1080/23311975.2020.1870798
Singh, S. K., Del Giudice, M., Chierici, R., & Graziano, D. (2020). Green innovation and environmental performance: The role of green transformational leadership and green human resource management. Technological Forecasting and Social Change, 150, Article 119762. https://doi.org/10.1016/j.techfore.2019.119762
Song, W., Yu, H., & Xu, H. (2021). Effects of green human resource management and managerial environmental concern on green innovation. European Journal of Innovation Management, 24(3), 951–967. https://doi.org/10.1108/EJIM-11-2019-0315
Tang, G., Chen, Y., Jiang, Y., Paillé, P., & Jia, J. (2018). Green human resource management practices: Scale development and validity. Asia Pacific Journal of Human Resources, 56(1), 31–55. https://doi.org/10.1111/1744-7941.12147
The Sweef Institute. (2025). The state of Indonesia’s entrepreneurial ecosystem: Focus on the green economy. https://sweefinstitute.org/the-state-of-indonesias-entrepreneurial-ecosystem-focus-on-the-green-economy/
Wang, Z., & Makhbul, Z. K. M. (2024). Green human resource management as a catalyst for sustainable performance: Unveiling the role of green innovations. Sustainability, 16(4), Article 1453. https://doi.org/10.3390/su16041453
World Bank. (2023). Indonesia country climate and development report. https://www.worldbank.org/en/country/indonesia/publication/indonesia-country-climate-and-development-report
Yuliza, Y., & Musa, H. (2025). Building green performance through green HRM and green transformational leadership: The mediation role of green innovation. Asian Management and Business Review, 5(2), 247–261. https://doi.org/10.20885/AMBR.vol5.iss2.art1
Zhao, F., Kusi, M., Chen, Y., Hu, W., Ahmed, F., & Sukamani, D. (2021). Influencing mechanism of green human resource management and corporate social responsibility on organizational sustainable performance. Sustainability, 13(16), Article 8875. https://doi.org/10.3390/su13168875
Published
2026-10-26
How to Cite
Praptono, S., & Andini, R. (2026). Green HRM’s Influence on Sustainable Business Performance: Green Innovation Mediation among Indonesian Green Entrepreneurship Start-ups. International Journal of Economics, Business and Innovation Research, 5(06), 1910-1931. https://doi.org/10.63922/ijebir.v5i06.6997
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