Environmental ethics and green practices in the manufacturing sector: The role of green innovation and environmental policy

Abstract Numerous studies have indicated that incorporating an environmental ethic (EE), green innovation (GI), and environmental policy (EnP) can enhance a company's sustainable performance, that is, environmental performance (EP) and economic performance (EcP) in the manufacturing industry. However, to encourage eco‐friendly production and processes, it is crucial to promote sustainable practices across different industries. Nevertheless, some researchers have overlooked the significance of these implementations. Integrating these practices into the manufacturing sector can be challenging. To address this issue, this study has developed an empirical model that assesses two pillars of sustainable performance in the Jordanian manufacturing industry. The study analyzes the direct correlation between a firm's EE, GI, and sustainable performance. It also examines whether GI plays a mediating role in the relationship between company EE and sustainable performance and if EnP moderates the relationship between GI and sustainable performance. The study collected data from 386 respondents belonging to various manufacturing industries in Jordan and analyzed it using SmartPLS. The research revealed that a manufacturing firm's EE is significantly boosted by GI, EP, and EcP. These findings suggest that companies with higher EE are more likely to innovate sustainably and perform better in terms of sustainability. In particular, the study found that GI plays a mediating role between a firm's EE and its sustainable performance. Furthermore, the impact of EnP on the relationship between GI and EP was mixed, showing a moderating effect on the former but not on EcP. The study provides valuable insights into the implementation of green practices in the manufacturing sector and discusses policy implications for manufacturers.