Sustainable Leadership and Green Innovations: Catalysts for Sustainable Business Performance in the Textile Sector of Pakistan

ABSTRACT This paper builds on the theoretical basis of natural resource–based view theory (NRBV) and upper echelons theory (UET) to examine the complex network of connections between sustainable leadership, green innovations (radical and incremental), and sustainable performance in the textile sector in Pakistan. A self‐administered survey questionnaire was distributed among 400 professionals from textile firms listed on the Pakistan Stock Exchange. Out of which, 315 responses were deemed valid for analysis through the PLS‐SEM technique using SPSS 23 and SmartPLS 4.0. The findings disclosed that sustainable leadership has strong relationships with green innovations and the sustainable performance of the firm. Additionally, organizational error tolerance was a significant moderator of the development of these relationships. The study attempts to extend the existing knowledge on NRBV and UET by integrating them into leadership literature and organizational innovation management. Further, the use of organizational error tolerance as a moderator adds an important criterion for these relationships. It is important to gain an in‐depth understanding of the mechanisms by which sustainable leadership impacts green innovations and subsequently impacts sustainable performance. The findings will guide industry leaders, policymakers, and stakeholders in promoting resilient, environmentally conscious, and high‐performing textile enterprises in Pakistan.