Ethical leadership for better sustainable performance: Role of employee values, behavior and ethical climate

Although the impact of ethical leadership on different aspects of organizational and employee performance is evident, research on the impact of ethical leadership on sustainable performance is still limited. Considering the scant research in this area, this study investigates the impact of ethical leadership on sustainable business performance through the mediating roles of ethical climate and voluntary environmental behavior, and the moderating role of employees' biospheric values. The study data were collected from 327 mid-level managerial employees from a cross-sectional industry in Bangladesh. The empirical evidence revealed a significant influence of ethical leadership on employees' voluntary environmental behavior, which subsequently impacted the sustainable performance of business organizations. It further identified the moderating role of employees’ biospheric values and the mediating role of the ethical climate in the hypothesized relationship. The findings provide significant theoretical contributions and practical implications in the area of both ethical leadership and sustainable performance.