Pakistan is likewise becoming a popular investment destination for new hotel development. In terms of occupancy and average rate, hotels in Pakistan are experiencing significant expansion. In the following years, this trend is projected to continue. Tourism is an integral part of Pakistan’s economy and a major source of foreign exchange earnings. Pakistan’s government has relaxed its visa policy, which has helped the country attract many foreign visitors. Over the last 6 years, 60,070 foreign visitors have visited the country’s tourist attractions, particularly the captivating sites found in the country’s northern regions. According to the present government’s plans and steps to boost domestic and international tourism, the country forecasts a nearly 30% increase in visitors between now and 2030. Pakistan received approximately 948 million dollars in global tourism receipts in 2019. Although tourism receipts in Pakistan have fluctuated significantly in recent years, they have climbed from 2015 to 2019. Hilton struck a deal with Dhabi Hospitality in March 2021 to build an upscale Doubletree by Hilton hotel in Islamabad, Pakistan, that is expected to open in 2025. The Radisson Hotel Group and Radisson Blu Serviced Apartments in Islamabad, Pakistan, struck a deal in August 2020 to open the country’s first internationally branded serviced apartments (Intelligence, 2022).

In 2020, the Pakistan tourist and hotel market was estimated to be worth roughly USD 20 billion, with a CAGR of 3% predicted by 2026. In 2019, tourism contributed about 7% of Pakistan’s gross domestic product (GDP). However, the market has suffered significant losses because of the pandemic. People cannot visit Pakistan due to safety precautions and different lockdowns implemented by the government during the current COVID-19 pandemic, putting Pakistan’s tourist and hospitality sectors in danger. The Pakistani government and people believed that the development would spur greater investment in tourism-related enterprises and create higher-paying jobs. The administration had also declared plans to promote and enhance tourism and remove visa rules for foreign visitors. The commencement of COVID-19 and restrictions on international travel have hampered the government’s plan; as a result, the country will not be able to implement its tourist strategy in 2020 (Intelligence, 2022). On the other hand, the market is likely to gain traction in the long to medium term. Over the last few years, Pakistan has become one of the most popular tourist destinations globally.

Furthermore, the South Asian country has topped several worldwide travel lists, making it a popular tourist destination. The government of Pakistan’s tourism promotion has also aided in raising the country’s profile in the international market. Increased improvements in roads, airports, and other facilities have helped ease travel. In Pakistan, the tourism and hotel industry are divided into two categories: inbound and outbound tourism, as well as hotel types [economy and budget hotels, mid-scale hotels, upper-scale hotels, premium and luxury hotels, and other types of hotels (shared living spaces, rented apartments, service apartments, and so on)]. For all of the following segments, the research provides market size and projections in USD million for Pakistan’s tourist and hotel sector (Intelligence, 2022).

The hospitality sector in Pakistan, a developing country, was the focus of this research. We chose the hotel segment in the country to represent the hospitality sector because it is a mix of major five-star hotels, such as Serena, Avari, Marriot, and Pearl Continental, which are some of its top competitors. In recent years, Pakistan has become an important investment destination for the hospitality and tourism sector, particularly for new hotel development. Indeed, the tourism and hotel sector’s net worth were close to 20 billion dollars in 2020. Given the significant expansion in this area in recent years, 262 expects a CAGR of more than 3% in 2026. From an economic standpoint, these patterns are favorable for the country’s GDP (see, for example, Figures 1 and 2). However, the increased competition in this sector is reflected in the growth trends. Every hotel in the country is concerned about how to survive and remain competitive in the face of competition. In this regard, increasing staff creativity is critical in this industry—large cities such as Lahore, Karachi, Faisalabad, Islamabad, and Rawalpindi are important destinations for hotel investment.

In the hospitality industry, just a little contemporary research has been undertaken. A recent study looked at the impact of ethical leadership on people’s green in-role and extra-role behaviors, with green HRM practices as a mediating factor and individual green values as a moderator. The findings revealed that ethical leadership considerably impacts green HRM practices and in-role and extra-role green behaviors. Furthermore, the association between ethical leadership and both types of green behaviors was mediated by green HRM practices. Furthermore, individual green values were found to improve the link between green HRM practices and both types of green behaviors (Islam et al., 2021b). Another study looked at the impact of a supervisor’s ethical leadership style on subordinates’ green or pro-environmental work behavior in the presence of green human resource management (GHRM) as a mediator and environmental knowledge as a moderator, as well as the influence of a supervisor’s ethical leadership style on subordinates’ green or pro-environmental work behavior. According to structural equation modeling, the influence of ethical leadership on green work behavior was partially mediated by GHRM.

Similarly, a recent study investigated the impact of green human resource management in mediating the relationship between ethical leadership and employees’ environmental citizenship behavior and the moderating effect of individual green ideals. The findings revealed that ethical leadership directly impacts employees’ environmental citizenship behavior and an indirect impact through green human resource management. Furthermore, the results demonstrated that, based on social learning and supply value-fit theory, employees’ environmental knowledge might multiply the indirect impact of ethical leadership on green behavior via GHRM (Islam et al., 2021a).

The current project attempts to close the following knowledge gaps. First, to our knowledge, this is the first viewpoint that tries to promote ESEL as a crucial antecedent and the mediating effects of PGC in predicting employee green behavior, which has not been examined previously. Second, from an individual standpoint, this effort tends to enhance the topic of environmental-specific ethical leadership in the hotel industry context. This industry plays a significant role in corporate social responsibility at the employee level, servant leadership, and innovative work habits (Ahmad et al., 2021a). In this vein, most of the previous study in the domain of innovation was conducted at the organizational level, for example (Ahmad et al., 2021b; Islam et al., 2021a). Despite the importance of individual green behavior and ESEL through PGC, the hotel industry has been understudied. Finally, numerous ESEL studies have been undertaken in developed countries. Given that ESEL is influenced by culture, climate, and context-specific scenarios (Slåtten et al., 2020).

The remainder of the current manuscript is separated into various sections. Next, research objectives followed by the research model, theoretical underpinnings, and relevant literature will be explored. Next, the authors present the methodology, including information on the population, sample, and data gathering technique. The results and analyses for validating the hypotheses are discussed in the fourth part. Implications, limitations, and conclusions are also included in this section. Finally, in the discussion section, the authors examine their findings from past research.

The objectives of this study are to (i) determine the relationship between environmental-specific ethical leadership and employees’ green behavior, (ii) investigate the effect of environmental-specific ethical leadership on psychological green climate, and (iii) examine the effect of psychological green climate on employees’ green behavior, and (iv) to investigate the mediating role of psychological green climate between the relationship of environmental-specific ethical leadership and employees’ green behavior in the context of Pakistan’s hotel industry.

This research has three primary constructs, instance, ESEL (exogenous variable), PGC (mediator), and (3) EGB (endogenous variable; see Figure 3). This study model is based on the social exchange theory (Blau, 1964; Cropanzano et al., 2017) and the ability-motivation-theory (Appelbaum, 2000) and social learning theory as a theoretical foundation discussed in detail in literature section.

Recently researchers have been increasingly interested in studying green workplace behavior (Norton et al., 2015; Kura, 2016; Dumont et al., 2017; Suganthi, 2019). The attention provided to employees’ green behavior emerged from the need for employees to protect the environment and utilize resources wisely (Kura, 2016). Ones and Dilchert (2012) view employees’ green behavior as “scalable actions and behaviors that employees engage in that are linked with and contribute to or detract from environmental sustainability” (p: 87). Green behavior of the employees includes activities, for instance, editing documents electronically instead of printouts, reporting leaks in the toilet, using teleconference facilities instead of traveling to meetings, turning off unwanted lights, and printing drafts on scrap papers (Norton et al., 2015, 2017). Thus, the green behavior of the employees focuses on avoiding waste, conserving water, saving energy, and recycling. Therefore, scholars view that the green behavior of an employee is an individual’s commitment which can be stimulated through encouragement rather than through demands (Pichel, 2008). Hence, contextual, cultural, and individual factors significantly shape employees’ green behavior (Pichel, 2008; Chou, 2014).

An individual’s psychologically meaningful representations of proximal organizational processes, events, and structures are a psychological climate (Rousseau, 1988). It is also defined as “an experiential-based, multidimensional, and enduring perceptual phenomenon which a given organizational unit members widely share. Its primary function is to cue and shape individual behavior toward the modes of behavior dictated by organizational demands” (Koys and DeCotiis, 1991). Several kinds of psychological climates exist in the previous literature (Yasir et al., 2017). One of them is a green climate which is defined as a shared perception of the organizational policies, procedures, and practices that are established and promoted, thereby pursuing a sustainable environment (Chou, 2014; Norton et al., 2017; Zhou et al., 2018; Tuan, 2021). Moreover, Chou (2014) identified that the green climate dimensions include management orientation and environmental policy, for instance, training and policy statements, to specific ecological tasks, for example, water resource management and recycling. Thus, the formation of the climate is influenced by the degree of organizational emphasis on particular procedures and practices (Kuenzi and Schminke, 2009).

The leadership of an organization influences various work outcomes, for instance, employee attitudes (Barling et al., 2011), environmental performance (Ramus and Steger, 2000), and safety performance (Barling et al., 2002). Prior literature shows that situational and individual factors can affect individuals’ probability of engaging in green workplace behavior (Kura, 2016). For example, previous literature identified that transformational leadership behavior and spiritual leadership behavior play a significant role in maximizing green workplace behavior (Graves et al., 2013; Robertson and Barling, 2013; Afsar et al., 2016; Kura, 2016). Research studies show that when employees work under the leadership of those individuals who display servant leadership behavior that focuses on protecting the environment, they tend to exhibit green behaviors more often (Afsar et al., 2018; Tuan, 2021). Recently, Liu and Zhao (2019) study identified that when subordinates perceive that in their organization, ethical leadership focuses upon sustainable development, cares about others, and possesses the values of green production and green research and development, thus affecting subordinates’ green innovation behavior. Therefore, the current study proposes the following hypothesis.

Stringer (2002) highlighted that “most studies have shown that the single most important determinant of an organization’s climate is the day-to-day behavior of the leaders of the organization” (p: 12). More specifically, climate formation is influenced by the employee’s immediate supervisor. Because employees view and follow the actions of their immediate supervisors (Cantor et al., 2012). Therefore, supervisors should explain to their followers the importance of a specific organizational initiative and act as an interpretive filter of relevant organizational policies and procedures (Kuenzi and Schminke, 2009), and provide them with a source of inspiration, for instance, ethical leadership behavior (Zientara and Zamojska, 2018). As sustainability is an ethical issue (Barnett et al., 2005), an ethical leader is highly likely to assist in developing and promoting environmental standards to protect the natural environment (Khan et al., 2019). Moreover, an ethical leader encourages their subordinates to raise their concerns regarding the ethical standards (Yasir and Rasli, 2018), they are also expected to promote discussions between followers related to the environmental standards (Kuenzi and Schminke, 2009), thereby shaping subordinates shared perception that the organization’s environmental procedures and policies are established to improve environmental sustainability (Khan et al., 2019; Saleem et al., 2020). Hence, current research proposes that ethical leadership will positively and significantly associate with the psychological green climate.

Previous literature shows that contextual factors can affect employees’ green behavior (Norton et al., 2012; Littleford et al., 2014; Dumont et al., 2017). More specifically, prior studies show that organizational climate is a significant contextual factor influencing employees’ behavior and attitude (Kuenzi and Schminke, 2009; Yasir and Rasli, 2018). As Norton et al. (2012) identified that green climate captures individuals’ perceptions regarding the behavioral norms and organizational attributes within an organization that pertain to environmental sustainability. Therefore, these scholars argue that a green climate is necessary to establish, thereby facilitating an employee’s green behavior. In line with the previous literature on psychological climate (James et al., 2008), the psychological green climate has a positive association with the green behavior of the employees (Norton et al., 2014; Dumont et al., 2017). Previous literature also shows that a green climate predicts next-day employees’ green behavior (Norton et al., 2017) because individuals are primarily motivated to exhibit behaviors in line with their perceptions of their organization’s procedures and practices (Schneider, 1975). Thus, they might believe that exhibiting green behavior is appropriate in their organization (Norton et al., 2014). Recently, Saleem et al. (2020) identified a positive association between green climate and employees’ green behavior in universities and hospitals in Pakistan. Hence, it is proposed that a psychological green climate will have a positive and significant association with employees’ green behavior.

Past literature shows that ethical leaders can promote and develop environmental standards to protect the natural environment (Khan et al., 2019). By adopting green human resource management practices, a message is conveyed by the organization’s top management to the employees regarding its concern for a sustainable work environment beyond pure economic gains. Further, it seeks to engage employees in green-related activities and decisions (Renwick and Redman, 2013). Moreover, if top management of an organization clarifies green responsibilities in the workplace, for instance, having appropriate rewards for green behavior, proper job design, and appraisal, thereby enhancing employees’ awareness of a sustainable environment leading toward their involvement in green activities (Dumont et al., 2017).

Previous research also indicates the mediating role of green climate between (a) perceived organizational sustainability policy and employees’ green behavior (Norton et al., 2014), (b) environmental-specific servant leadership and green performance (Tuan, 2021), and (c) ethical leadership and organizational environmental citizenship behavior (Khan et al., 2019). Therefore, it is proposed that a psychological green climate mediates the association of ethical leadership and employees’ green behavior in Pakistan’s hotel industry.

According to the literature on sustainability, upmarket hotels are on the cutting edge of ecologically friendly measures (Zientara and Zamojska, 2018; Merli et al., 2019). As a result, five-star hotels were chosen as the example location. The combined total headcount of three five-star hotels was roughly 1,592 at the time of data collection. A 310 respondents were computed from a population frame of 1,592 using the formula n = [z² * p * (1 − p)/e²]/[1 + (z² * p * (1 − p)/(e² * N)] The required sample size was determined to be 310 at a 95 percent confidence level and a 5 percent margin of error (Daniel, 1999) and sampling Table by Krejcie and Morgan (1970). The sample size is 310 (with finite population adjustment).

where z = 1.96 indicates a 95% confidence level, p = proportion (represented as a decimal), N = population size, and e = margin of error.

z = 1.96, p = 0.5, N = 1,592, e = 0.05

n = 384.16/1.2413 = 309.48

n ≈ 310

Although, according to the methodology, the required sample size was 310. Maintaining a low response rate, on the other hand, is a delicate topic for organizational researchers. Some academics feel that a response rate of more than 50% is sufficient for research to confirm results (Hair et al., 2010a; Saunders et al., 2012; Hiebl and Richter, 2018). As a result, researchers must recognize the significance of a fair response rate for their studies. Based on this perspective, the current study aimed for a significantly bigger sample size to prevent low response rate difficulties and obtain the necessary data for SEM analysis.

Self-administered questionnaires were used. The researcher first sent 350 self-administered questionnaires to five-star hotel personnel. A total of 238 questionnaires were returned, suggesting a 68 percent response rate. For generalizing the results, a response rate of more than 50% is required (Sekaran and Bougie, 2016). However, normality tests revealed that 14 of the patients had concerns with normality. As a result, after excluding 14 cases, the final data of 224 respondents was used, meeting the needed minimum sample size for SEM of 200 responses (Hair et al., 2010a). Simple random sampling was used in this investigation. The researcher selects the individuals at random using this technique, eliminating human biases. This method ensures that each participant has an equal probability of being included in the survey (Creswell and Creswell, 2017).

Employees were asked to provide their opinions regarding each construct’s understudy constructs and items. For instance, ethical leadership, employees’ green behavior, and psychological green climate was anchored on a 5-point Likert scale ranging from “1 = strongly disagree to 5 = strongly agree.” The survey had four parts. Part, one had questions related to the demographic description, such as age, gender, marital status, educational background, highest education level, work experience, length of service, and department. The second part had questions related to ethical leadership behavior and was measured using a ten-item scale from Brown et al. (2005). The third part had questions related to employees’ green behavior and was measured using 13 items scale from Graves et al. (2013). Lastly, part fourth had questions related to psychological green climate and was measured using eight items from Norton et al. (2014).

In Smart PLS, the estimation of the research model is based on a two-stage firstly valuation of the measurement model by investigating its reliability and validity, and secondly, a structural model that examines the variance explanation of the endogenous construct and predictive relevance. Many researchers have recommended applying a measurement model to establish the reliability and validity of the primary data. Three-step procedures, namely, individual item reliabilities, convergent validity, and discriminant validity, are required to assess the measurement model. Mostly the recommended “threshold limits of the factor loadings should be higher than 0.70” (Hair et al., 2006, 2011, 2012). Table 2 shows the item loadings for understudy constructs which assess the convergent validity.

A threshold value of ≥0.7 for each item’s loading is considered reliable (Hair et al., 2017), but loading greater than 0.6 is adequate when outer loadings have high scores of loadings to match Average Variance Extracted (AVE) and Composite Reliability (CR; Ramayah et al., 2018). Thus, only one item (Green Climate8 = in our hotel, employees care about the environment) is found short of the required minimum level and is removed. In addition, the adjusted measurement model of this study is highlighted in Figure 4.

Table 3 highlights the construct’s validity and reliability, thereby showing that the constructs have high validity and reliability (Hair et al., 2010b).

The values of the structural model (direct relationships) of this research are highlighted in Table 8, indicates that ethical leadership is positively and significantly related to green behavior (β = 0.494, t = 7.469, p < 0.05), thus, supporting the first hypothesis. Furthermore, ethical leadership is positively and significantly related to green climate (β = 0.649, t = 18.419, p < 0.05), thus, supporting the second hypothesis. In addition, the green climate has a positive and significant effect on green behavior (β = 0.385, t = 6.257, p < 0.05), thus supporting the third hypothesis (see Table 8).

The following Table 9 shows the results of the coefficient of the determinant (R²), which are at a moderate level; for instance, R² values of 0.75, 0.50, and 0.25 are known to be substantial, moderate, and weak, respectively (Hair et al., 2017).

Scholars identified that the f ² values of 0.02, 0.15, and 0.35 are considered a small, medium, and large effect sizes, respectively (Cohen, 1988). Table 10 indicates the results of the f ².

Hair et al. (2017) have identified that the recommended values of Q² are 0.35 (large), 0.15 (medium), and 0.02 (small), indicating the level of the predictive relevance for endogenous construct. The following Table 11 shows the results of Q².

After conducting the bootstrapping analysis, results show that PGC plays a mediating role between ESEL and EGB in the hotel industry of Pakistan (see Table 12).

The following Figure 5 highlights the results of the bootstrapping analysis.

This research has several practical implications for hoteliers that want to encourage green behavior among their employees. Because subordinates prefer to follow their leaders’ behavior, the current study implies that managers as role models establish examples of pro-environmental behavior. Furthermore, these managers should develop, promote, and implement green policies, thereby influencing subordinates’ perceptions of the organization’s policies, procedures, and practices as environmentally friendly. Hoteliers, for example, should prioritize environmental protection, which includes actions such as emission reduction and waste minimization, recycling, water and energy conservation, and eco-friendly purchasing strategies (Lee et al., 2010; Stalcup et al., 2014). Furthermore, hoteliers must motivate and persuade workers to execute green projects by implementing an incentive scheme, such as offering money and non-financial incentives (Al-Romeedy, 2019). Such measures will create a psychological green atmosphere, which is a crucial determinant of employees’ green behavior. Furthermore, hoteliers must attract and retain individuals who care about the environment and provide training and development programs for employees, thereby communicating the importance of environmentally specific ethical leadership behavior, which can help foster a psychological green climate conducive to employee green behavior. As a result, the current study demonstrates the importance of environmental-specific ethical leadership conduct and a green climate as antecedents of employee green behavior in Pakistan’s hotel business.

First, a sample of the current research was from the hotel industry in Pakistan. Thus, caution about the generalization of the present study’s findings might be taken. In addition, future research should consider dissimilar cultures and industries for the understudy framework, for instance, the manufacturing industry, banking, and telecommunication sector. Second, the current study is cross-sectional, and this study design does not allow for a determination of the direction of causality between the constructs. Therefore, a longitudinal study is needed, thereby establishing the causal directions of the understudy framework. Third, the current study investigated psychological green climate as a mediator. However, other underlying psychological mechanisms may also explain the link between ESEL and EGB. Therefore, future research may explore other mediating mechanisms that might clarify the underlying psychological mechanisms through which ESEL is related to EGB. Lastly, this research had an acceptable sample size. However, it seems to be relatively small. Therefore, future studies should utilize a somewhat larger sample size.