Green supply chain practices and organizational performance: The mediating role of environmental performance in the Pakistani FMCG sector

Abstract

Objective: This study investigates the influence of green supply chain management (GSCM) practices on organizational performance through the mediating mechanism of environmental performance within the fast-moving consumer goods (FMCG) sector of Pakistan. Drawing upon the natural resource-based view (NRBV) and stakeholder theory, this research examines four key dimensions of GSCM: green procurement, green information systems, green manufacturing, and investment recovery practices, and assesses how they collectively shape environmental and organizational outcomes.

Design/methodology/approach: A quantitative research design employing a cross-sectional survey methodology was adopted. Data were collected from 200 mid-to-senior level supply chain and operations managers across FMCG firms operating in Pakistan using a structured questionnaire. The measurement model was validated through confirmatory factor analysis, while the structural model was evaluated using Partial Least Squares Structural Equation Modeling (PLS-SEM) with bootstrapping (5,000 resamples) to test the hypothesized relationships and mediation effects.

Findings: The results reveal that investment recovery practices and green information systems exert significant positive effects on environmental performance, whereas green procurement and green manufacturing do not demonstrate statistically significant direct impacts within the Pakistani FMCG context. Environmental performance, serving as a full mediator, significantly and positively influences organizational performance. The model explains 53.3% of the variance in environmental performance and 38.0% of the variance in organizational performance, confirming the substantial explanatory power of the proposed framework.

Originality/value: This study contributes to the GSCM literature by empirically validating the mediating role of environmental performance between GSCM practices and organizational performance in a developing economy context. The findings provide novel insights specific to the Pakistani FMCG sector, where regulatory pressures and sustainability awareness are rapidly evolving, offering practical guidance for managers and policymakers seeking to leverage green supply chain initiatives for competitive advantage.

Keywords: Green supply chain management; Environmental performance; Organizational performance; PLS-SEM; FMCG sector; Pakistan; Mediation analysis; Sustainability