Sustainability-Driven Leadership in Green MSMEs: Transforming Business Performance Through Eco-Friendly Workplace Innovations

Green leadership plays a critical role in promoting sustainable practices within organizations, particularly in micro, small, and medium enterprises (MSMEs) that contribute significantly to national economies. This study examines the influence of environmental transformational leadership (ETL) on organizational sustainability performance (OSP), while also considering the mediating roles of environmental organizational citizenship behavior (EOCB) and green behavior at work (GBW). Using a quantitative method and SEM-PLS analysis of responses from 200 MSME employees in Indonesia, the findings show that ETL significantly enhances both GBW and OSP. However, ETL does not directly impact EOCB, indicating that voluntary environmental behavior may depend more on intrinsic motivation or workplace culture. In contrast, both GBW and EOCB positively affect OSP, highlighting the role of individual environmental initiatives in organizational sustainability. These results suggest that while leadership is essential, fostering a culture that supports voluntary green behaviors is equally important. The study offers theoretical insights and practical recommendations for embedding sustainability into leadership strategies, organizational culture, and employee engagement.