CEO Environmentally Responsible Leadership and Firm Environmental Innovation

Manufacturing firms face increasing pressure to seek innovative solutions to environmental perils. Addressing such challenges requires responsible leadership that embraces a normative and stewardship approach for environmentally sustainable system. However, the question of whether and how CEO environmentally responsible leadership can drive firm environmental innovation has yet to be addressed. We develop and test a serial mediation model that specifies socio-psychological mechanisms through which environmentally responsible CEOs influence firm environmental innovation. To test the model, we use a two-wave multi-source dataset of top- and middle-level managers in 125 manufacturing firms in China. We find that environmentally responsible CEOs drive environmental innovation by developing a sense of collective environmental identification, which facilitates middle-level managers’ engagement in the organizational citizenship behavior associated with a more sustainable environment. Our research delineates the power of CEOs’ responsible leadership and its potential to help organizations that face growing pressure to increase environmental innovation.