Eco-friendly messages: impact on leadership-driven total quality management practices and ESG ratings in the oil and gas industry

Purpose The oil and gas industry is uniquely positioned. It acts as both a primary contributor to climate change and a potential contributor to its solution. This unique position creates a compelling research context for this scientific investigation. The purpose of this study is to examine how sustainable leadership (SLD), through total quality management (TQM), influences environmental, social and governance (ESG) performance. In addition, this study explores how green marketing moderates this mechanism based on the theory of general contingency. Design/methodology/approach Yamane’s (1973) formula and convenience sampling were used, and 129 unit heads and their assistants responded to an online survey over two time durations. Data was analysed using PLS-SEM. Findings The author found support for all the hypothesised paths. The findings imply that eco-friendly messages, expressed in green marketing, encourage sustainable-minded leaders to increase ESG performance. The increase in ESG performance is achieved through the adoption of robust TQM practices like Lean Six Sigma with a green focus. Research limitations/implications Additional research is needed to show how TQM-driven environmental improvements generate better access to green finance for companies. Practical implications Boards should ensure that marketing claims align with operations and leadership commitment. Managers should form cross-functional teams to coordinate leadership, operations and marketing sustainability efforts. Investors should ensure companies have green leaders, robust TQM practices and environmental marketing strategies before investing. Regulators should evaluate environmental compliance by reviewing companies’ internal processes. Customers should verify the operational and leadership support for a company’s sustainability claims. Originality/value Firstly, this paper resolves the leadership–performance paradox by introducing TQM as an intervener in the SLD–ESG performance relationship. Secondly, and to the best of the authors’ knowledge, it is the first study to explicate how green marketing generates additional motivation for green-minded leaders to adopt robust TQM practices to improve their ESG rankings. It provides theoretical insights on how and when SLD projects succeed or fail. Thirdly, this paper empirically validates and extends Fiedler’s leadership model in the contemporary context of sustainability and ESG performance. It underscores that external green-orientated stakeholder pressures (un)make a company.