Corporate Social Responsibility as a Bridge Between Green Initiatives and Sustainability: role of Corporate Governance

Abstract

In the context of increasing environmental challenges and the global pursuit of sustainable development, this study addresses a critical gap in the literature concerning the role of green practices and governance in enhancing sustainability within small and medium enterprises (SMEs) in Pakistan. While existing research has largely focused on large corporations or specific sectors in various regions, limited empirical attention has been paid to how green finance, green investment, and green technology collectively influence sustainability outcomes in emerging economies, particularly through the mediating role of corporate social responsibility (CSR) and the moderating effect of corporate governance (CG). To address this gap, the study aims to examine a comprehensive model grounded in agency and stakeholder theories that integrates these variables to explore their direct, indirect, and conditional effects on sustainability. A quantitative, cross-sectional design was employed, with data collected from 250 employees in Pakistani SMEs through structured surveys adapted from established scales. Structural equation modeling (SEM) was utilized to test the hypothesized relationships. The results indicate that green finance, green investment, and green technology each have a significant positive impact on sustainability. Moreover, CSR mediates these relationships, demonstrating its central role in translating green strategies into sustainable outcomes. CG significantly moderates the CSR–sustainability linkage, suggesting that effective governance mechanisms strengthen the impact of CSR on organizational sustainability. These findings contribute to the theoretical understanding of sustainable development by highlighting the interplay among financial, technological, social, and governance dimensions. The study offers practical implications for SME managers and policymakers, emphasizing the need to institutionalize CSR practices, invest in green innovations, and enhance governance structures to foster long-term sustainability. This research enriches the sustainability discourse by offering a multidimensional framework that is particularly relevant for SMEs operating in resource-constrained and policy-evolving contexts such as Pakistan.