Inclusion and Sustainability: Does the Climate for Inclusion Drive Corporate Environmental Performance?

ABSTRACT This study examines whether inclusive workplace practices enhance corporate environmental performance (CEP). Drawing on social exchange theory and resource‐based view, we argue that inclusion fosters pro‐environmental behaviors through reciprocity and serves as a strategic resource that strengthens collaboration and eco‐innovation. Using Refinitiv data comprising 23,109 firm‐year observations across 58 countries, we find a positive association between organizational inclusion and CEP after controlling for firm, industry, and country factors. The effect remains robust across alternative measures, industries, and institutional contexts, with flexible working hours, daycare services, disability inclusion, and HIV/AIDS programs emerging as the most influential practices. These findings extend the sustainability literature by positioning inclusion as a distinct antecedent of CEP and highlighting it as a strategic lever for advancing social equity and environmental sustainability. Thereby, the findings offer actionable insights for managers and policymakers to design inclusion‐oriented practices that concurrently strengthen firms' environmental performance.