Corporate social responsibility unlocks sustainable environmental performance through green leadership and capability

The enterprises in Bangladesh, particularly the small and medium-sized enterprises (SMEs), are becoming necessitated to incorporate the environmental responsible practices in their business operations. The study is conducted to explore the impact of Corporate Social Responsibility (CSR) on Sustainable Environmental Performance (SEP) using Natural Resource-Based View (NRBV) to explain the internal processes generated by CSR to create environmental value. The research also focuses on the moderating functions of top management environmental concern (TMEC) and perceived organizational support (POS) by framing green capability (GC) and green transformational leadership (GTL) as organizational processes that convert CSR initiatives to measurable environmental gains. When coming up with this conceptual model, GC and GTL are hypothesized to play the role of mediators between CSR and improved SEP results. At the same time, the model also examines whether TMEC and POS have extra impact on CSR-SEP relationship, which may increase the effectiveness of GC and GTL. The data collected through the empirical methods were based on a questionnaire that was distributed to 405 employees in SMEs and of a variety of industries. The dataset obtained was then put through Structural Equation Modeling (SEM) to test the hypothesized relationships and estimate model fit. The results indicate that the statistically significant positive influence of CSR on SEP is present, and the mediating role of GC and GTL is also meaningful in the given relationship. Moreover, TMEC increases the CSR-SEP connection, and POS increases the effect of GTL on SEP. These findings highlight the critical positions of leadership and managerial issue in mediating CSR environmental benefits. The study is significant in the NRBV literature considering the setting of emerging economies and suitable actions that can be applied by practitioners seeking to use CSR as a driver of environmental performance enhancement among SMEs.