Linking Corporate Environmental Strategy to Environmental Performance: The Mediating Role of Employee Green Behavior and the Moderating Effect of Environmental Concern

ABSTRACT This study examined the link between corporate environmental strategy (CES) and environmental performance (EP) in large‐scale manufacturing organizations in Kombolcha City, Ethiopia. It also investigated the mediating role of green behavior (GB) and the moderating effect of environmental concern (EC) in this linkage. The research is grounded in the Natural Resource‐Based View, which frames CES as a strategic asset, and Social Identity Theory, which explains how employees internalize and act on environmental values. The researchers utilized an explanatory research design and employed a quantitative approach. A self‐administered questionnaire was utilized, and data were collected from 379 employees and analyzed using Partial Least Squares Structural Equation Modeling (PLS‐SEM). The results of the study revealed that CES, GB, and EC have a significant positive effect on EP. Research results asserted that GB acts as a mediator between CES and EP. The findings also demonstrated that EC moderates the link between GB and EP, but with a small effect size. Leaders in manufacturing organizations and policymakers ought to endorse efforts that promote employee engagement in GB. Organizations must focus on not only formulating a corporate environmental strategy but, more importantly, building a culture that fosters and sustains environmentally responsible behaviors at all levels to ensure its successful implementation. In general, strong environmental strategies that emphasize the concept of shared responsibility for sustainability greatly improve employee EP.