Green HRM And Sustainability Orientation in Relation to Carbon-Reduction Performance: The Moderating Role of Perceived Vision 2030 Alignment

1. INTRODUCTION

Global issues like climate change and increased carbon emissions have put pressure on governments and various organizations to embrace sustainable operational practices. Economic diversification and environmental responsibility are big issues for resource-dependent economies. One of the largest hydrocarbon economies in the world, the Kingdom of Saudi Arabia (KSA) is experiencing growing urgency to mitigate carbon emissions and maintain economic growth in the context of its national transformation agenda, Vision 2030 (Al-Barakati, 2024). The need to achieve organizational-level carbon-reduction performance has thus become critical to national net-zero commitments.

Empirical evidence indicates that energy use is a major factor contributing to CO₂ emissions in Saudi Arabia, which underscores the need to incorporate technological innovation and environmental management practices across the sectors (Alajmi, 2024). National environmental analysis also shows that economic growth and industrial activity still place pressure on greenhouse gas (GHG) emission, especially in power and heat generation systems (Altouma et al., 2024). Such environmental pressures have driven the Saudi government to initiate structural sustainability reforms via Vision 2030 and the Saudi Green Initiative.

Saudi Arabia, under Vision 2030, has committed to reaching net-zero emissions by 2060, aiming to reduce by an estimated 278 million tons of CO₂ each year by 2030, doubling renewable energy capacity, and increasing energy efficiency in industries (Islam & Ali, 2024). These policy efforts focus on organizational change, technological advancement, and sustainable workforce engagement as critical tools to facilitate national decarbonization strategies. The carbon capture project, which can store 9 million metric tons of carbon dioxide annually, in which Aramco, SLB, and Lindse are major shareholders, provides additional example of how the Kingdom is shifting to a low-carbon economy in line with global climate pledges (Reuters, 2024).

Though national sustainability policies offer a strategic guide, organizational capabilities and workforce engagement, to a large extent, determine environmental performance outcomes. Green Human Resource Management (Green HRM) and sustainability orientation have become key internal forces bringing environmental change in this context. In a recent study on Saudi organizations, it was observed that Green HRM practices contribute to environmental performance significantly by boosting both environmental commitment and innovation behavior of employees (Altassan, 2025). But it also indicated the importance of aligning leadership values in order to incorporate sustainability in their culture meaningfully. Likewise, a study indicated that sustainability-oriented organizational cultures strengthen sustainable development performance using the green engagement and operational innovation processes (Putra et al., 2025).

Theoretical perspectives that support this facet are the Stakeholder Theory, Natural Resource-Based View (NRBV), and Institutional Theory. According to (McDougall et al., 2019), NRBV proposes that firms gain a competitive advantage by having environmentally sustainable capabilities. Conversely, (Ribeiro & Gavronski, 2021) pointed out that Stakeholder Theory focuses on the responsibility of an organization to fulfill the environmental expectations of the stakeholders that affect the sustainability performance outcomes. Also, Institutional Theory describes the external pressures produced by laws, norms and expectations of the industry and the formation of organizational behavior in relation to the adoption of sustainable practices (Kauppi, 2022).

Although scholarly attention has increased on the topic, the current body of literature focuses mainly on direct associations between Green HRM practices and sustainability outcomes. Current literature often disregards the institutional and policy processes by which organizational sustainability efforts are translated into concrete carbon-reduction performance. Corporate environmental strategies in transitional economies like Saudi Arabia are highly determined by the national sustainability programs. Nevertheless, there is little empirical evidence on how organizational sustainability orientation and Green HRM practices are impacted by national programs like the Vision 2030.

To fill this gap, this research aimed to examine the impact of Green Human Resource Management and sustainability orientation on carbon-reduction performance in Saudi Arabian organizations, and explore the moderating effects of the perceived Vision 2030 alignment. This research makes an empirical contribution by offering organization-level findings to determine how internal sustainability practices culminate in environmental performance outputs through policy-based mechanisms. In concept, it adds a new dimension to the literature on sustainability management by incorporating human resource practices, strategic sustainability orientation, and national climate policy into a single approach to analysis. Contextually, the research provides the insights peculiar to the KSA and proves the role of Vision 2030 as an institutional driver that aligns the organizational behavior with the national net-zero goals in an energy-reliant developing economy.

2. LITERATURE REVIEW

2.1. Key Constructs

Green HRM is defined as the incorporation of environmental sustainability goals into the human resource practices, including green recruitment and selection, environmental training and development, sustainability-based performance appraisal, green compensation, and involvement of employees in environmental programs (Ahmad et al., 2025). Such practices build ecologically responsible employee behavior and ecological competence of the organization. Green HRM in this study involves green recruitment, environmental training, performance evaluation based on sustainability, and participation of employees in carbon-reduction programs.

Sustainability orientation is the strategic dedication of an organization to incorporate environmental and social responsibility in the corporate vision, decision-making, operational processes, and long-term strategic planning to create sustainable values (Silva et al., 2025). Companies that are highly sustainability-oriented make alignment between the business objectives, environmental conservation, and the needs of the stakeholders.

Perceived Vision 2030 Alignment is the perception of employees about the degree to which the organization sustainability strategies, policies, and operational practices comply with the environmental and decarbonization priorities in the Saudi Arabia agenda of the Vision 2030. Instead of gauging national policies programs or carbon performance on the macro-level, this construct reflects the perceived organizational alignment, strategic commitment, and compliance orientation to Vision 2030 sustainability goal. Notably, the items are not a direct measure of carbon reduction performance, but how much organizations are bringing their sustainability strategies and internal practices in line with the national policy framework of Vision 2030. The construct therefore, reflects how employees perceive organizational alignment and not the national policy itself.

Carbon-reduction performance is an organizational capacity to reduce GHG emission levels by improving energy efficiency, emission control strategies, optimization of resources, and a low-carbon operational strategy. Although carbon reduction can be measured using audited emission inventories, this study measures it using perceptual assessment of professionals who have a sound understanding of sustainability and operations, and are involved in the evaluation of environmental activities of organizations. Previous sustainability studies often quantify environmental performance based on perceptual judgments of employees where objective data on emissions are lacking, because organizational actors have credible knowledge of environmental programs and operational strategies that affect carbon performance (Fang et al., 2023; Ibrahim & Mahmood, 2022).

Therefore, the construct represents perceived organizational effectiveness in carrying out emission-reduction programs, energy-efficient operations, and carbon-management practices that could help in reducing the operational carbon footprint of the organization.

2.2. Theoretical Framework

The Natural Resource-Based View (NRBV) is a continuation of the Resource-Based View (RBV), where it is suggested that the organization can gain a lasting competitive advantage based on the environmentally oriented capabilities, including pollution prevention, eco-efficiency, and sustainable management of resources (McDougall et al., 2019). According to NRBV, environmental competencies are integrated into organizational systems, especially human capital and managerial practices, which become strategic resources that are difficult to imitate and valuable, and are the key to their sustainability performance in the long term (Legese et al., 2026). Green HRM in this research serves as an internal capability that builds environmental knowledge and behaviors of employees to help companies enhance carbon-reduction performance.

Stakeholder Theory, on the other hand, postulates that the success of organizations is based on their capacity to address the demands of their stakeholders, such as employees, regulators, communities, and society, especially in terms of environmental responsibility and sustainability performance (Freeman, 1984, cited in Mahajan et al., 2023).  Stakeholder Theory supports sustainability orientation construct as stakeholder theory emphasizes the external pressure (decarbonization demands of stakeholders under the Saudi Arabian agenda of Vision 2030) compelling firms to incorporate sustainability in corporate vision and objectives.

In order to support this explanation further, the Institutional Theory sheds light on how organizational behavior is influenced by the formal policy structures. Firms are urged to adhere to national sustainability agendas by institutional pressures such as coercive regulations, normative expectations, and legitimacy-seeking behavior (DiMaggio & Powell, 1983; Kauppi, 2022). A recent article applied Institutional Theory and revealed that institutional forces have a strong impact on low-carbon innovation policy in organizations, indicating its usefulness in environmental strategy study (Yuning et al., 2024). Vision 2030 in the Saudi Arabian context is an institutional mechanism that is policy-based to encourage organizations to correspond their internal strengths and strategic orientations to national climate objectives.  A combination of these theories offers a multi-layered account: NRBV shows how Green HRM creates the internal environment capabilities, Stakeholder Theory explains the reason why companies form the sustainability orientation to be able to match the expectations of stakeholders, and Institutional Theory explains how policy environments like Vision 2030 precondition the efficacy of the given capabilities.

Beside theories, many pioneering empirical studies have provided evidence regarding the linkages between HR practices and environmental sustainability. In their pioneering study, (Daily & Huang, 2001) stated that the success of environmental management is dependent upon the participation of employees, leadership support, and environmental training programs. Following their study, (Renwick et al., 2013) developed Green HRM as an approach to strategic sustainability that includes green recruitment, green training, green performance management, and green rewards. Likewise, (Jackson et al., 2011) also conceptualized Green HRM in the context of strategic sustainability where environmentally focused HR systems enable sustainability transformation.

2.3. Hypotheses Development

It has been observed that sustainability-related business approaches enhance the competitiveness of the Saudi Arabian energy industry, which supports the strategic significance of sustainability management systems (AlKhars et al., 2024). Another study by (Kumar et al., 2025) studied a large state-owned steel manufacturing firm and applied PLS-SEM analysis with the data of 236 workers to explore how Green HRM can impact environmental performance via the proactive behavior of employees. The researchers concluded that Green HRM significantly and positively impacted environmental performance through employee engagement in environmentally friendly practices, which eventually leads to emission reduction performance. Nevertheless, its results are constrained by a single industry setting and cross-sectional survey design, thus limiting the generalizability to other sectors and national policy settings.

Likewise, (Mishra & Rath, 2024) identified the effects of Green Recruitment and Training (GRT) and Green Performance and Reward (GPR) on environmental performance by surveying employees in the Indian banking industry. Their findings were that such practices improve environmental outcomes in organizations through the intermediary of Organizational Citizenship Behavior for Environment (OCBE). However, the service-sector orientation and regional concentration in India restrict the applicability to the carbon-intensive industries with more significant pressure for emission reduction.

Continuing NRBV arguments, (Ahmad et al., 2023) conducted research among 155 academic employees of environmentally ranked institutions, with structural modeling used to test Green HRM (competence, motivation, and involvement) and environmental performance relations. The results showed that Green HRM improves environmental results indirectly via employee environmental commitment and the indirect impact of green knowledge sharing. Nevertheless, the university context is a low-emission institutional setting, which forms a theoretical limitation in explaining the performance of direct carbon reduction in industrial organizations.

On the other hand, there are also indications of conditional effects. A study based on NRBV within the banking sector and involving 310 employees in the survey indicated that Green HRM did not have a direct positive effect on environmental performance unless moderators like green corporate social responsibility and innovation process were included (Niazi et al., 2023). This implies that organizational systems might be expected to encode HR practices into the quantifiable emission results. The limitation of the study is that it is sectorial, which makes the direct effect of the environment inconclusive.  Collectively, the existing literature shows that Green HRM builds environmental competencies and responsiveness of the stakeholders that facilitate sustainability performance, but there are gaps in how it specifically affects the carbon-reduction performance outcomes in diverse settings. Thus, H1 is proposed:

H1: Green HRM has a positive and significant impact on carbon-reduction performance.

(Agyapong et al., 2023) conducted a survey among 202 Ghanaian manufacturing SMEs based on survey data and structural equation modelling, which explored the impact of environmental orientation on sustainability performance via green supply chain management (GSCM). It concluded that environmental orientation has a strong positive correlation with environmental performance, which is consistent with the reduction of emissions, but the research revealed that GSCM is a primary means of this relationship. Nevertheless, it is a regionally targeted study focusing on Ghana and manufacturing SMEs, which makes it less directly applicable to different environments and sectors with high carbon emission rates.

(Zehir & Ozgul, 2020) evaluated the impact of the green innovation functions in a different empirical context by calculating the results of the 315 ISO-certified industrial firms in Turkey on the performance of firms depending on internal and external environmental orientation. Findings showed that internal environmental orientation had a direct positive impact on firm performance through innovation results, which proved that organizational commitment to sustainability can be translated into performance gains. However, this study did not directly relate carbon emissions or reduction indicators, and its Turkish industrial sample limits its use in industry with different emission profiles.

Other evidence in support is (Nurulasiah et al., 2022) in an emerging economy, where PLS-SEM analysis showed that sustainability orientation was a key determinant of sustainable performance outcomes, thus indicating that the firm’s sustainability commitment contributed to improved corporate sustainability outcomes in line with environmental goals. Nevertheless, the emphasis on micro-enterprises and generalized sustainability performance instead of carbon-specific performance is a methodology shortcoming.

Moreover, (Mah et al., 2023) carried out another study on 219 Malaysian MSMEs in which PLS-SEM was applied in an effort to determine the effect of corporate sustainability orientation and environmental practices on the performance of the firm. It was determined that sustainability orientation positively influenced firm performance via environmental practices, proving that strategic environmental commitment positively affects the sustainability performance of the firm. But it did not segment carbon-specific performance and focused on MSMEs in Malaysia, so it cannot be directly applied to carbon reduction in general terms. Taken together, these works imply that the organization sustainability orientation facilitates the improvements of the environmental performance, which are conceptually connected to the results of carbon-reduction, but the gaps in geographic coverage, industry orientation, and relation with carbon-reduction remain. Thus, H2 is proposed:

H2: Sustainability orientation has a positive and significant impact on carbon-reduction performance.

(Khuntia, 2025) studied the integration of a Green HRM policy and the change in employee behavior in Malaysian organizations and found that structured HRM policies enhance pro-environmental behaviors that affect sustainability results. Despite this not being targeted at Saudi Vision 2030, the study mentions that organizational policy frameworks can enhance the correlation between HRM and environmental performance, which means that the governance frameworks can play the role of moderator.

Furthermore, (Liu et al., 2025) relied on panel data of A-share listed companies in China to determine the impacts of institutional interventions of green policies on corporate environmental performance. They reported high levels of improvement in firm environmental performance after the implementation of the policies, implying that national policies reinforce the role played by internal management practices in emission reductions. Importantly, HRM was not directly measured in the study, but evidence was provided that policy contexts moderate the effects of organizational practice.

(Soussi et al., 2025) have examined 188 firm-years of listed firms in Saudi Arabia to test the relationship between sustainable governance and environmental performance. They discovered that the mechanism of sustainability governance, which is informed by the expectations of the national policy, has a positive influence on the environmental performance. Although the study does not directly test the moderation effect, it depicts how robust sustainability frameworks that are associated with the priorities of the national policy improve outcomes of organizational environmental. Taken together, these studies indicate that policy and strategy frameworks moderate organizational practices in terms of sustainability and environmental performance. Even though none of them directly consider the perceived Vision 2030 alignment as a moderator, the evidence shows that the national policy settings can enhance the internal HRM agency on the environmental outcomes. Thus, H3 is proposed:

H3: Perceived Vision 2030 alignment is a positive and significant moderator between Green HRM and carbon-reduction performance.

(Basali & Alshahrani, 2025) studied ESG disclosure reform under the Vision 2030 and the sustainability reporting practices of listed Saudi companies in response to the national policy priorities. According to their analysis, disclosure reforms under the Vision 2030 have an impact on the manner in which firms organize sustainability orientation within the organization, promoting transparency and accountability. Nevertheless, the research concentrates on financial performance, rather than direct carbon-reduction indicators, which prevents the generalization of the research to the areas of environmental performance.

Moreover, (Altassan, 2025) discussed sustainable leadership and green leadership in Saudi companies, with the possibility of establishing the sustainability orientation in organizational practice through strategic leadership and internal systems. However, the study did not directly relate the carbon-reduction performance or moderation effect of the policies. Still, its focus on matching the internal orientation with the external values implies that wider policy frameworks, such as Vision 2030, enhance the operationalization of sustainability orientation to deliver quantifiable results.

Another study by (Elfakharani, 2024) focused on the legislative effect of Vision 2030 on multinational corporations in Saudi Arabia, showing that Vision 2030 created regulatory changes that force firms to modify compliance and corporate approaches. This implies that organizational responses to sustainability orientation are determined by national policy under the Vision 2030, which forms institutional expectations that have the capacity to moderate orientation-performance associations. Its qualitative method and compliance constrain a quantitative evaluation of Green HRM and carbon-reduction performance.

Moreover, (Syeda et al., 2023) on the CSR and sustainability roles of Aramco in the context of vision 2030 demonstrated that the corporation addresses CSR principles consistent with the sustainability agenda of Saudi Vision 2030. It encompasses climate, energy transition, and environmental impact areas. This signifies the influence of national policy priorities on strategic orientations for environmental responsibility in large corporations and suggests a moderating effect on the connection between sustainability orientation and outcomes (including carbon metrics) via Vision 2030 frameworks. Nevertheless, the single-corporate emphasis does not provide wider generalizability across industries. Collectively, these research works highlight that Vision 2030 policy frameworks, in turn, reinforce and channel the organizational sustainability orientation, allowing the sustainability commitment to translate into performance results. Thus, H4 is proposed.

H4: Perceived Vision 2030 alignment is a positive and significant moderator between sustainability orientation and carbon-reduction performance.

2.4. Conceptual Framework

Below presented conceptual framework in Fig. (1) includes independent Variables (IVs) are Green HRM and sustainability orientation, the dependent variable (DV) is carbon-reduction performance, whereas the perceived Vision 2030 alignment acts as a moderating variable (MV) between IVs and DV.