Unveiling Responsible Leadership as a Determinant of Circularity and Net-Zero-Based Performance - Moderating Role of Green Agility

As organizations worldwide strive to mitigate climate change, achieving net-zero-based performance (NZBP) has become a pressing imperative. Drawing on upper echelons theory and dynamic capability theory, this research unveils a distinctive mechanism for achieving NZBP through the responsible leadership (RL) framework. Circular economy (CE) practices play a mediating role, while green agility (GA) acts as a moderator. Using a two-wave, time-lagged design, we collected data from 394 senior managers in large manufacturing firms and analyzed them using Partial Least Squares Structural Equation Modeling (PLS-SEM). The analysis reveals that RL positively influences NZBP through both direct and indirect pathways, with GA strengthening the relationships between RL and NZBP, as well as between RL and CE. By conceptualizing RL as a higher-order construct with six dimensions, we provide a more nuanced understanding of the leadership capabilities needed to drive NZBP, offering support for organizations seeking to enhance their environmental sustainability.