The Influence of Aggressive Low Carbon Innovation on Firm's ESG Performance at Energy Industry: The Role of Green Knowledge Management, Green Market Orientation, and Management Commitment | [Pakistan Journal of Life and Social Sciences • 2025]

Author(s):

1. Andi Hendra Paluseri: Ciputra University Surabaya, Surabaya, Indonesia

2. Thomas S. Kaihatu: Ciputra University Surabaya, Surabaya, Indonesia

3. Timotius Febry Christian: Ciputra University Surabaya, Surabaya, Indonesia

Abstract:

This study examines the impact of Aggressive Low Carbon Innovation on Firm's ESG Performance at Pertamina group: The Role of Green Knowledge Management, Green Market Orientation, and Management Commitment. Using a quantitative approach and a correlational research design, data were collected cross-sectionally from 210 top management respondents at Pertamina group. Structural Equation Modeling-Partial Least Squares (SEM-PLS) was applied to analyze the complex relationships between variables, including direct and indirect effects. The direct influence findings show that all independent variables-Green Knowledge Management, Green Market Orientation, and Management Commitment-significantly impact Aggressive Low Carbon Innovation and Firm's ESG. The indirect influence findings indicate that Aggressive Low Carbon Innovation mediates the effect of Green Knowledge Management, Green Market Orientation, and Management Commitment on Firm's ESG. This research concludes that low-carbon innovation significantly enhances a company's ESG performance, supported by green knowledge management, green market orientation, and management commitment. It strengthens the environmental, social, and governance aspects of ESG, helping companies meet sustainability regulations and gain competitive advantages. Recommendations include ensuring strong leadership commitment, developing effective knowledge management, aligning with green market trends, and integrating low-carbon innovation into sustainability strategies. Transparency in ESG reporting, collaboration, government incentives, employee training, and regular monitoring are essential to drive green innovation and maintain the relevance of ESG strategies.

Page(s): 5400-5416

DOI: 10.57239/PJLSS-2025-23.1.00422

Published: Journal: Pakistan Journal of Life and Social Sciences, Volume: 23, Issue: 1, Year: 2025

Keywords:

Aggressive Low Carbon Innovation Innovation Firms ESG Performance Green Knowledge Management Green Market Orientation Management Commitment

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