ORIGINAL RESEARCH article
Front. Sustain.
Sec. Sustainable Organizations
Volume 6 - 2025 | doi: 10.3389/frsus.2025.1592076
How ESG Activities Foster Green Innovation and Sustainable Competitive Advantage: Insights from Public and Private Companies using Multi-Group PLS-SEM
Provisionally accepted
- School of Business, Binus University, Jakarta, Jakarta, Indonesia
Select one of your emails
You have multiple emails registered with Frontiers:
Notify me on publication
Please enter your email address:
If you already have an account, please login
You don't have a Frontiers account ? You can register here
This study investigates the role of environmental, social, and governance (ESG) activities in driving green innovation and achieving sustainable competitive advantage, with a comparative analysis of private and public companies. Data were collected from 114 companies (79 private and 35 public) in Indonesia between August and September 2024. Data were collected through purposive sampling and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with Multi-Group Analysis (MGA) conducted via the Smart PLS 4.0 software. The findings reveal that ESG activities are positively directly associated with sustainable competitive advantage, and this connection is only significant for private companies. ESG activities are also directly related to green innovation, and this relationship is more pronounced in public companies. Green innovation is positively associated with sustainable competitive advantage, and this relationship is notably stronger in public company groups. Additionally, green innovation plays a mediating role in the relationship between ESG activities and sustainable competitive advantage, and this model is more dominant in the sample group of public companies. This study provides valuable insights for managers and policymakers in developing countries on leveraging ESG activities as a strategic tool to enhance green innovation and competitive advantage. Furthermore, it offers a refined understanding of how organizational types (public versus private) shape these outcomes.
Keywords: ESG Activities, green innovation, Sustainable competitive advantage, private companies, Public companies, PLS-SEM, multi-group analysis
Received: 12 Mar 2025; Accepted: 03 Jul 2025.
Copyright: © 2025 Widyantoro, Rusmanto, Warganegara and Furinto. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Tjatur Widyantoro, School of Business, Binus University, Jakarta, 10270, Jakarta, Indonesia
Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.