Sustainable workforce development: Examining work engagement through the Lens of green human capital and psychological ownership

Background Organizations increasingly invest in Green Human Capital (GHC) to develop sustainability-oriented capabilities, yet evidence on how it enhances employee Work Engagement (WE) remains limited. Psychological Ownership (PO) rooted in motivation and responsibility research, may explain this relationship, but its mediating role in sustainability contexts remains underexplored.ObjectiveThis study examines the direct relationship between GHC and WE and the mediating role of PO, while also analyzing these relationships across four WE dimensions: Vigor, Dedication, Absorption, and Sustainable Engagement.MethodsA cross-sectional survey of 400 employees from small to large-sized Indian organizations engaged in sustainability initiatives was conducted between January and June 2025 using validated questionnaires. Covariance-Based Structural Equation Modeling (CB-SEM) with AMOS was used to test the measurement model, direct effects, and mediation.ResultsGHC significantly and positively predicted overall WE (β = 0.405, p < .001) and had a particularly strong effect on Sustainable Engagement (β = 0.775, p < .001), while its effect on Absorption was not statistically significant. GHC also strongly predicted PO (β = 0.752, p < .001). Although PO exhibited a weak direct association with WE, mediation analysis revealed a statistically significant but modest partial mediating effect, with no significant mediation observed across individual engagement dimensions.ConclusionsThe findings indicate that GHC enhances employee WE primarily through direct capability-based mechanisms, especially sustainability-related engagement, while PO plays a limited yet complementary mediating role.Originality/ValueThis study pioneers a sustainability-driven engagement framework by revealing how GHC directly and psychologically drives employee WE through PO.