The Effect of ESG Initiatives on Job Satisfaction and Organizational Citizenship Behaviour: Mediating Role of Leadership Styles in the Workplace

Abstract

Leadership plays an integral part in moulding behaviour and organisational outlook, even in the context Environmental, Social and Governance (ESG) initiatives. This paper studies the correlation between ESG practices, leadership styles, Job satisfaction and organisational citizenship behaviour (OCB). Investigates how leadership styles like Authentic, Democratic, Servant, Transformational, Ethical and paternalistic leadership mediate between the company initiatives and employee’s job satisfaction and OCB. The questionnaire’s reliability and validity were tested with a pilot study. After a successful pilot, for this study, data was collected from 300 participants, which was analysed by Spearman's rho, Structural mediation and ANOVA. It further analysed based on demographics like sector of employment, Gender, Education and Age. The results exhibit that ESG perceptions are significantly correlated with the other variables. Whereas mediation analysis prove that Servant leadership turns out to be the most dominantly effective, followed by paternalistic and transformational leadership in ESG and Job Satisfaction pathway. And Paternalistic as most dominant followed by Servant and transformational leadership in ESG and OCB mediation, while effect of ESG on OCB remains significant. ANOVA depicts a difference in OCB across different age groups and genders, but not significantly different between occupational roles. The research explains the psychological and behavioural mechanisms via ESG practices and its effect on employee job satisfaction and voluntary work initiatives. The research offers an insight for institutions, legislators and management executor to develop strategies to strengthen ESG credibility through value aligned leadership to foster employee well- being and a sustainable growth.