Exploring eco-friendly business practices and corporate innovation in Pakistan

Purpose The manufacturing industry in Pakistan, like any other industry, promotes sustainability in its supply chain operations. Yet, the scenario is different in the chemical manufacturing sector, which lags in the development and implementation of sustainable development practices and policies to safeguard its long-term viability. Embracing sustainable practices not only fulfills manufacturing needs but also stands out from other companies. Hence, the purpose of this study is to explore the eco-friendly business practices that impact corporate innovation. Organizational size is considered a moderator in the relationship between green practices and corporate innovation. Design/methodology/approach The quantitative study was conducted to collect the data through convenience sampling techniques. In total, 138 responses were analyzed through the partial least squares method. Findings The findings reveal that the implementation of green practices increases corporate innovation. Thus, the impact varies based on different organizational sizes. The crux of the organizational strategy relies on the implementation of eco-friendly practices and holding the right size to survive. Practical implications The proposed study provides new grounds for the natural resource-based perspective theory and stakeholder theory. Chemical manufacturers can tailor their strategies that accommodate varying resources and capabilities, facilitating more effective implementation of green practices across different companies within the sector. Originality/value The paper provides new ground for the natural resource-based perspective theory. More specifically, this study was expected to help chemical manufacturers choose environmentally friendly practices that would help them meet corporate sustainability performance goals through innovation.