Ethical leadership and environmental performance: Role of green intellectual capital and ethical climate

Grounded in the social learning theory and social exchange theory, this research investigates how green intellectual capital (GIC) mediates ethical leadership (EL) effects on environmental performance (EP), and whether EL influences in mediating EP through GIC is contingent upon ethical climate (EC). The primary data was obtained through a designed questionnaire from 378 managers of the manufacturing sector in Pakistan using a covariance-based sampling technique. The results were analyzed using Partial Least Squares Structural Equation Modelling (PLS-SEM) for testing the hypothesized mediation and moderator effects. The findings demonstrated that ethical leadership has a direct and indirect (via green intellectual capital) positive influence on environmental performance. Further, an ethical climate enhances the association between ethical leadership and green intellectual capital. The results from our study add to the literature by showing that ELP effects on environmental performance are contingent not only on independent roles of GIC and EC but also their interactive combined effect that enables moral motivations as a whole to collectively promote improved environmental prospects. These findings contribute to the literature on leadership and sustainability by showing the synergistic impact of moral and organizational knowledge for the enhancement of environmental performance.