Environmental Sustainability Practices and Policy Awareness as Determinants of Economic Vulnerability: A Structural Equation Modeling Study of Chikankari Washermen in India

This paper examines the interrelationship between environmental sustainability practices, human capital formation, and economic vulnerability within the Chikankari Washermen sector in Lucknow, India, with a particular focus on the mediating influence of policy awareness. Using data from a cross-sectional survey of Chikankari Washermen in pollution-affected regions of Uttar Pradesh, particularly Chikankari Washermen in Lucknow, the study applies Partial Least Squares Structural Equation Modeling (PLS-SEM) to examine causal pathways among environmental sustainability practices, human capital, economic vulnerability, and policy awareness. The results indicate that limited adoption of sustainability practices significantly reduces human capital (β = –0.596, p < 0.001) and increases economic vulnerability by affecting health and productivity. Policy awareness partially mediates this relationship, suggesting that institutional information and environmental literacy can strengthen adaptive resilience. The study provides empirical support for Environmental Stress Theory and Human Capital Theory, highlighting how environmental conditions undermine workforce capabilities and shape economic vulnerability. This study focuses on Chikankari Washermen in Lucknow, India, representing a key segment of the broader Chikankari sector, to examine how environmental sustainability practices and policy awareness influence economic vulnerability. The findings highlight the critical need for the development of a robust and evidence-based policy framework that strengthens environmental sustainability practices and enhances policy awareness, alongside labor and social protection measures, to reduce economic vulnerability among Chikankari Washermen and promote inclusive development in developing economies. • Environmental degradation weakens human capital among informal workers in polluted regions of India. • Health decline and productivity loss link environmental stress to economic inequality. • Policy awareness partially mediates environmental impacts through environmental literacy. • Environmental stress undermines socio-economic sustainability and inclusive development. • Integrated environmental and social policies are vital for sustainability in developing economies.