How Green Finance and Innovation Shape Environmental Competitiveness: A Business Strategy Perspective on Sustainability and Corporate Performance

ABSTRACT In response to escalating environmental imperatives, this study examines how green finance and green innovation jointly enhance corporate performance, with corporate sustainability functioning as a strategic mediator. Although existing research often addresses these constructs in isolation, limited attention has been given to their integrated influence in emerging economies and resource‐constrained sectors. Drawing on the Resource‐Based View and Ecological Modernization Theory, the study develops and empirically tests a sustainability‐oriented strategy framework. A two‐phase methodology was employed: First, a comprehensive literature review identified key constructs and linkages; second, survey data from Indian manufacturing and service organizations were analyzed using partial least squares structural equation modeling. Findings confirm that green finance and green innovation significantly strengthen corporate sustainability, which mediates their impact on performance. The study contributes to sustainability strategy literature and provides actionable insights for managers and policymakers seeking transformative pathways toward sustainable competitiveness.