ABSTRACT Sustainability research has yet to clarify how firms convert their environmental knowledge into measurable performance outcomes. Addressing this gap, we develop and test a novel dual‐pathway framework in which green intellectual capital (GIC), the firm's environmental know‐how and capabilities, drives sustainable performance through two intertwined mechanisms. Analyzing survey data from 367 manufacturing firms, our findings show that GIC significantly enhances sustainable performance when strategically embedded via a green business strategy and that the high levels of green technology adoption further strengthen the strategic conversion of GIC into environmental and economic gains. Our post hoc analysis further identifies distinct first‐order dimensions of GIC exert differential effects on sustainability, underscoring the need for targeted knowledge investments. The originality of this study lies in uncovering this moderated‐mediation mechanism for the first time, thereby integrating intellectual capital theory with resource‐based and dynamic‐capabilities perspectives in the sustainability domain. We advance understanding of how intangible environmental assets can be strategically and technologically leveraged, offering clarity on how firms can effectively harness their intangible assets for sustainability.
Mohmand et al. (2025) studied this question.