The Role of Happiness in Strengthening ESG-Driven Green HRM Practices and Organizational Sustainability

Sustainable Human Resource Management (HRM) has emerged as a crucial enabler of organizational sustainability in response to evolving workplace dynamics and global ESG demands. This study explores the integration of Environmental, Social, and Governance (ESG) principles into Green Human Resource Management (GHRM) practices and investigates how employee happiness moderates the relationship between GHRM and organizational performance, including environmental and economic outcomes. Using data from the World Values Survey (WVS), this study analyzes responses from 66 countries over a five-year period, comprising 94,278 data points. A quantitative approach employing Smart PLS 4 examines the direct and moderated effects of GHRM on environmental and economic performance (EP and ENP). Variables include ESG dimensions (Environmental, Social, and Governance), happiness as a moderating factor, and key performance indicators. Statistical methods such as hierarchical regression and structural equation modeling (SEM) were used to validate the hypotheses. The results confirm that integrating ESG principles into GHRM is feasible and significantly enhances both environmental and economic performance. While happiness positively moderates GHRM’s impact on organizational outcomes, its effect is relatively limited. This suggests that although happiness can improve employee engagement and environmental participation, its overall strengthening effect on GHRM is less pronounced under varying levels of happiness. This study contributes to the Sustainable HRM literature by incorporating ESG principles into GHRM practices and exploring the novel role of happiness as a moderating variable. It provides empirical evidence supporting the integration of sustainability frameworks into HRM strategies to enhance organizational performance. Furthermore, it emphasizes the importance of aligning GHRM with employee well-being to ensure sustainable workplace innovation. JEL classification numbers: F66, M14, M21, O50. Keywords: Green Human Resource Management (GHRM), ESG (Environmental, Social, Governance), Employee Happiness, Environmental Performance, Economic Performance.