Green Economy And Organizational Performance

1.0                                                         INTRODUCTION

1.1       Background Information to the Study

A crucial idea that has received a lot of attention lately as people’s awareness of environmental damage and climate change has grown is the “green economy.” The green economy, according to Caiado, de Freitas Dias, Mattos, Quelhas, and Leal Filho (2021), is an essential instrument for attaining sustainable development and ending poverty. A low-carbon, resource-efficient, and socially inclusive economy that encourages sustainable development and lessens environmental degradation is what defines the green economy (Broman & Robèrt, 2021). Countries around the world are actively moving toward a low-carbon economy as the green economy continues to gain traction.

Huang, Qu, Zhang, and Zhao (2021) stated that the global green economy has expanded dramatically and now has a total value of more than $5 trillion. Additionally, the report notes that more than 60% of the world’s electricity is generated by renewable sources, and that over 20 million electric vehicles have been sold globally (World Green Economy Organization, 2024). According to the report, green finance has grown to be a major force behind the green economy, with over $2 trillion invested globally (Saez-Martinez, González-Moreno, & Hogan, 2021). With an emphasis on smart grids, sustainable transportation systems, and green buildings, the report also highlights the significance of organizational performance.

In business enterprises, organizational performance is a crucial concept that gauges a business capacity to achieve its aims and objectives. It consists a number of things, such as social responsibility, employee engagement, customer satisfaction, and financial performance (Camilleri, 2021). The accomplishments and effects of organizations in reducing environmental degradation, promoting sustainable development, and shifting to a low-carbon economy are referred to as organizational performance in the context of the green economy. According to research, companies that implement green economy practices and strategies typically outperform their non-green counterparts in terms of innovation, brand reputation, and financial performance (George, Merrill & Schillebeeckx, 2021).

According to a World Green Economy Organization study, businesses that made investments in green economy projects saw an average 15% increase in stock prices, while those that did not saw a 3% increase. Organizations that implemented green economy practices reported a meaningful minimization in greenhouse gas emissions, water consumption, and water generation, according to another study published in the International Journal of Innovation and Sustainable Development.

Organizational performance can be enhanced in a number of ways by implementing green economy practices: Cost savings: Green economy initiatives like waste minimization and energy efficiency can help businesses save a lot of money (George, Merrill & Schillebeeckx, 2021). Enhanced competitiveness: Businesses can stand out from rivals and obtain a competitive edge by implementing green economy practices (Jiang, Chai, Shao & Feng, 2020). Because workers are more likely to be loyal to a company that prioritizes sustainability, green economy practices can increase employee motivation and engagement (Garcia-Granero, Piedra-Muñoz & Galdeano-Gómez, 2020). Better environmental performance: By lowering an organization’s environmental impact, green economy practices can result in better environmental performance (Ghazilla, Sakundarini, Ahmad & Azuar, 2020).