The findings are particularly relevant as more Indonesian companies integrate ESG into their long-term business strategies. While sustainability initiatives are often associated with environmental protection and corporate governance, the study demonstrates that environmentally oriented human resource practices also strengthen employee commitment, engagement, and organizational performance.
Sustainable Business Requires Sustainable Human Resource Management
In recent years, sustainability has become a central priority for businesses worldwide. Companies are no longer evaluated solely on financial performance but also on their environmental responsibility, social impact, and governance standards under the ESG framework.
As a result, Green Human Resource Management (GHRM) has emerged as a strategic approach that integrates sustainability into every stage of human resource management. These practices include environmentally conscious recruitment, sustainability training, green performance evaluations, eco-friendly reward systems, and active employee participation in environmental initiatives.
According to Hernawati W Retno Wiratih, environmental policies alone are insufficient to achieve sustainable business goals. Companies also need employees who understand, support, and actively contribute to sustainability initiatives. This makes human resource management a critical pillar of successful ESG implementation.
Survey of 180 Employees Across ESG-Oriented Companies
The research employed a quantitative approach involving 180 permanent employees working in ESG-based companies across Indonesia's manufacturing, service, and technology sectors.
Participants had at least one year of work experience to ensure they were familiar with sustainability policies implemented within their organizations.
Data were collected through structured questionnaires using a five-point Likert scale and analyzed using Structural Equation Modeling (SEM) with SmartPLS software. The analysis examined the relationships between Green Human Resource Management, employee loyalty, and employee productivity.
Green HR Practices Deliver Strong Organizational Benefits
The study found that the implementation of Green Human Resource Management was generally rated as high, with an average score of 4.18 out of 5.
The highest-rated GHRM dimensions included:
- Green Training: 4.31
- Green Employee Involvement: 4.24
- Green Performance Appraisal: 4.15
- Green Recruitment: 4.02
These findings indicate that many ESG-oriented organizations actively provide sustainability training and encourage employees to participate in environmental programs. However, green recruitment received the lowest score, suggesting that environmental competencies have not yet been fully integrated into hiring and selection processes.
Employees Take Pride in Working for Sustainable Organizations
Employee loyalty was also found to be high, with an overall average score of 4.09.
The strongest loyalty indicators included:
- Organizational Pride: 4.28
- Organizational Commitment: 4.14
- Employee Engagement: 3.99
- Intention to Stay: 3.96
The results suggest that employees feel proud to work for organizations committed to environmental and social responsibility. Nevertheless, sustainability alone is not enough to guarantee long-term employee retention. Career development opportunities, fair compensation, leadership quality, and work-life balance remain important factors influencing employees' decisions to stay.
Productivity Improves Alongside Sustainability Practices
Employee productivity was also rated highly, achieving an average score of 4.14.
The highest productivity indicators were:
- Work Adaptability: 4.26
- Work Quality: 4.17
- Work Effectiveness: 4.11
- Innovation Capability: 4.03
Employees who participated in sustainability-related training demonstrated greater adaptability, stronger collaboration skills, improved problem-solving abilities, and higher readiness to respond to technological and organizational change.
Employee Loyalty Strengthens the Impact of Green HR
Statistical analysis confirmed that all proposed research hypotheses were supported.
The study found that:
- Green Human Resource Management significantly increases employee loyalty.
- Green Human Resource Management significantly improves employee productivity.
- Employee loyalty positively enhances productivity.
- Employee loyalty partially mediates the relationship between GHRM and productivity.
The research model explained approximately 50.4% of employee loyalty and 61.2% of employee productivity, indicating that sustainable HR practices are major contributors to positive employee outcomes within ESG-oriented organizations.
In other words, organizations that consistently implement environmentally responsible HR policies are more likely to build a committed workforce capable of delivering higher levels of performance.
Practical Implications for Business Leaders
The study offers important insights for companies seeking to strengthen their ESG strategies.
Rather than viewing Green Human Resource Management merely as a compliance requirement, organizations should recognize it as a strategic investment that enhances organizational competitiveness through stronger human capital.
The researcher recommends that companies:
- integrate sustainability competencies into recruitment and selection;
- expand environmental education and green training programs;
- establish reward systems that encourage sustainable behavior;
- increase employee participation in ESG initiatives; and
- align sustainability goals with employee career development and well-being.
According to Hernawati W Retno Wiratih of President University, Green Human Resource Management is more than an environmental management tool. It is a strategic approach that strengthens employee commitment, improves productivity, and supports long-term organizational sustainability in an increasingly competitive ESG-driven business environment.
Author Profile
Hernawati W Retno Wiratih is a researcher and academic at President University specializing in Human Resource Management, Green Human Resource Management (GHRM), Environmental, Social, and Governance (ESG), organizational sustainability, employee loyalty, and workforce productivity.
Research Source
Article Title: The Influence of Green Human Resource Management on Employee Loyalty and Productivity in ESG Based Companies in the Era of Sustainable Economy
Author: Hernawati W Retno Wiratih
Affiliation: President University
Journal: International Journal of Management and Business Intelligence (IJBMI)
Volume: 4
Issue: 3
Year: 2026
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