From Campus to Office: The Impact of Green Human Resources Management and Environmental, Social, and Governance on Student Career Choices in a Sustainability Context

From Campus to Office: The Impact of Green Human Resources Management and Environmental, Social, and Governance on Student Career Choices in a Sustainability Context

Almas Farah Dinna Dewi*, Handriyono, Isti Fadah, Dea Nova Agustiyaningsih

Management, University of Jember, Indonesia

*Corresponding Author

DOI: https://doi.org/10.51244/IJRSI.2024.11120085

Received: 19 December 2024; Accepted: 24 December 2024; Published: 23 January 2025

ABSTRACT

The development of many business paradigms focuses on sustainability, including the presence of Green Human Resource Management (GHRM) and Environmental, Social, and Governance (ESG). This is quite interesting for Generation Z students who have Pro-Environmental Consciousness (PEC) in determining their Job Persuit Intention (JPI). This study discusses the effect of GHRM and ESG on JPI through PEC using purposive sampling technique by distributing questionnaires using a Likert scale and the total respondents are 158 respondents from top 7 universities included in the UI GreenMetric World University at the Asian level. This research uses a path analysis model and Structural Equation Model (SEM) analysis technique based on Partial Least Square (PLS). This study found that companies that implement GHRM and ESG have an influence on the JPI of Generation Z students, but it does not necessarily change the PEC of them as a job seekers. Overall, GHRM and ESG implementation should be done holistically and effectively to achieve the desired results.

Keyword: Green Human Resource Management, ESG, Pro-Environmental Consciousness, Job Persuit Intention, Generation Z.

INTRODUCTION

Environmental sustainability has become an important issue lately considering a lot of damage has occurred in the world, this is the basis for many companies to make policies and activities that support the creation of a green environment. Green Human Resource Management (GHRM) is one example of a company’s real contribution in creating a green business. The development of a business paradigm that focuses a lot on sustainability, GHRM has also undergone changes that can be considered significant in the context of human resources, so GHRM emphasizes the importance of integrating green policies in every aspect of operations in the company (Jabbour & Santos, 2008). GHRM focuses on managing human resources that support sustainability in every practice (Deshwal, 2015), starting from recruitment, selection, training, performance appraisal, and so on must be sustainability-based. Good implementation of GHRM in a company can have a positive impact, including increasing employee awareness of protecting the environment, reducing operational costs through energy efficiency, and improving the company’s image.

This is relevant to the context of final-year students as prospective employees in viewing companies that have a good image in supporting environmental conservation. Final-year students who are part of Generation Z are the largest group entering the workforce today. Based on data obtained from (Deloitte, 2024), 73% of Generation Z have taken active steps to reduce their impact on the environment and 79% believe that businesses, especially companies, need to make proactive decisions and actions to support consumers to make sustainable purchasing decisions. They are interested in applying for a job in a company that contributes to environmental sustainability and implements GHRM in every aspect of its operations, so that if they are hired, they can contribute more to sustainability through programs within the company. Thus, GHRM can be used as a strategic tool in attracting more prospective employees who are concerned about environmental issues (Kartika et al., 2023).

In addition to GHRM, Environment, Social, and Governance (ESG) implemented by the company also influences job persuit intention in students. The company’s positive reputation reflected in ESG will attract more job seekers (Evans & Davis, 2011). ESG is one of the evidences to show the company’s concern for social and environmental issues (Kholmi & Nafiza, 2022). This can be implemented through donations, building social communities, creating environmental care programs, and so on. Students who have environmental and social concerns tend to choose companies that actively support sustainability and pay attention to social issues well, they see opportunities to be able to contribute to environmental preservation and social issues through these companies. With increasing environmental and social issues, companies need to be more proactive and report and promote GHRM and ESG in attracting prospective employees who have high environmental and social awareness.

In the current era, the urgency for companies to enhance job pursuit intentions (JPI) among job seekers is deeply tied to the growing emphasis on sustainable and responsible business practices. This is particularly relevant when viewed through the lenses of Green Human Resource Management (GHRM) and Environmental, Social, and Governance (ESG) perspectives (Tsai et al., 2014). Incorporating strong ESG principles into business operations not only addresses regulatory requirements but also differentiates a company in a crowded job market. Potential employees are attracted to companies that prioritize ethical governance, social responsibility, and environmental stewardship (Tsai et al., 2014). The urgency for companies to enhance JPI in the current era is driven by the need to attract and retain talent that values sustainability and ethical practices. By integrating GHRM and ESG principles into their recruitment strategies, companies can create a compelling employer brand that resonates with the values of modern job seekers, leading to a more engaged and committed workforce.

This research has an urgency in conducting a deeper exploration to see the influence of GHRM and ESG on JPI which specifically focuses on gen z students who have a high level of environmental awareness and concern. This study aims to see the relationship between GHRM and ESG on JPI among final year students at universities that have a high level of concern for sustainability, in this context evidenced by the ranking at UI Green Metric World University. Coupled with the presence of the pro-environmental consciousness variable as a moderating variable that can influence the 2 exogenous variables above on JPI. Given the importance of sustainability in a global context, this study contributes to the existing literature by providing additional in-depth perspectives on the career preferences of students who have environmental concerns and can be a critical insight for companies in designing sustainable recruitment strategies.

MATERIAL AND METHODS

This study uses a path analysis model and Structural Equation Model (SEM) analysis technique based on Partial Least Square (PLS) using the SMARTPLS application in conducting hypothesis testing. There are two exogenous variables and one endogenous variable between which there is a mediating variable that affects. The instruments used are validity and reliability tests using the outer model and inner model test methods based on SEMPLS. There are two results of data analysis techniques, namely the results of descriptive analysis and path analysis with two hypothesis tests in the form of direct and indirect effects.

Study Design: Distributed questionnaires using a Likert scale to respondents from top 7 universities included in the UI GreenMetric World University at the Asian level.

Study Location: Google form

Study Duration: June 2024 to August 2024.

Sample size: 158 respondents.

Sample size calculation: The sample selection criteria are based on universities in Indonesia that are classified as UI GreenMetric World University. The purposive sampling technique of the seven universities above was used to ensure that the respondents came from institutions that have good sustainability practices so that the data obtained can be relevant. The respondents selected are final year students and students who have graduated in the last 6 months from the university with the justification that they are in the stage of preparing to enter the world of work so it is relevant to assess their intention to work in a company and they are familiar with the sustainable practices found at the university.

Subjects & selection method: This study chose purposive sampling technique to determine the sample in accordance with the criteria. In total, 158 respondents were used in this study. The sample selection criteria are based on universities in Indonesia that are classified as UI GreenMetric World University. UI GreenMetric is an innovation from the University of Indonesia in providing annual rankings for universities worldwide based on the university’s efforts and commitment to environmental sustainability. The rankings consider many factors, such as waste management, water use, transportation, energy and climate change. Some universities selected based on high rankings in UI GreenMetric show significant efforts and achievements in promoting sustainability on their campuses.

The universities include Universitas Indonesia (ranked first in Asia), which has good sustainability initiatives and leadership that promotes green campus practices, Universitas Diponegoro (ranked third), which has innovative green projects and is committed to sustainability, Universitas Gadjah Mada (ranked fifth), which has a comprehensive approach to sustainability that is integrated into the curriculum and campus operations, Institut Pertanian Bogor (seventh) which has a focus on agricultural sustainability, Universitas Negeri Semarang (eighth) which has strong green initiatives along with sustainable campus management, and Universitas Sebelas Maret (tenth) which also promotes environmentally friendly campus practices and policies, and the last one is Universitas Jember (ranked three hundred and twelve) which is an advanced agro-industrial campus.

The purposive sampling technique of the seven universities above was used to ensure that the respondents came from institutions that have good sustainability practices so that the data obtained can be relevant. The respondents selected are final year students and students who have graduated in the last 6 months from the university with the justification that they are in the stage of preparing to enter the world of work so it is relevant to assess their intention to work in a company and they are familiar with the sustainable practices found at the university.

In addition, this study focuses on Generation Z students, who are the largest group entering the workforce. This generation is known for their concern for the environment and they tend to choose companies that are committed to environmentally friendly practices. Therefore, understanding the job persuit intention of Generation Z students who are already familiar with environmental practices at their university is important because they have perceptions and experiences that are directly affected and involved in the university’s sustainability efforts. These values may influence their future career choices.

Procedure methodology: GHRM is measured through 4 items that focus on respondents’ perspectives on company policies in terms of green business. ESG is measured through 4 items that focus on respondents’ perspectives on company policies in implementing green and humane business. JPI is measured through 4 items that focus on the perspective of students in choosing a company. PEC is measured through 4 things that focus on the respondent’s perspective on the policies set by the company. The following are the variables used in this study:

Table 1 Measurement

Variable	Code	Indicator
GHRM(Green Human Resource Management)	GHRM 2	First choice company
	GHRM 3	Attractive company
	GHRM 4	Learning about the company
	GHRM 5	The company is appealing
ESG(Environmental, Social, and Governance)	ESG 1	Eco-friendly company
	ESG 2	Green tech innovator
	ESG 3	Safe workplace
	ESG 5	Clear responsibility manager
JPI (Job Persuit Intention)	JPI 1	Accept the job
	JPI 2	Recommend the company to others
	JPI 3	Will come to interview
	JPI 5	Willingness to apply
PEC(Pro-Environmental Consciousness)	PEC 1	Environmental friendly activity
	PEC 2	The responsibility of environment and firm
	PEC 3	Effectiveness toward business green activity
	PEC 5	CSR activity

This study uses 16 codes from 4 variables measured using a five-point Likert scale ranked from 1=strongly disagree to 5=strongly agree. This scale was used to determine the perceptions of students from various universities towards GHRM, ESG, JPI, and PEC.

Statistical analysis

This study uses a path analysis model and Structural Equation Model (SEM) analysis technique based on Partial Least Square (PLS) using the SMARTPLS application in conducting hypothesis testing. There are two exogenous variables and one endogenous variable between which there is a mediating variable that affects. The instruments used are validity and reliability tests using the outer model and inner model test methods based on SEMPLS. There are two results of data analysis techniques, namely the results of descriptive analysis and path analysis with two hypothesis tests in the form of direct and indirect effects.

Picture 1 Conceptual Framework

Based on the framework formed above, the research hypothesis is obtained as follows:
1. H1: GHRM has a positive effect on PEC
2. H2: ESG has a positive effect on PEC
3. H3: GHRM has a positive effect on JPI
4. H4: ESG has a positive effect on JPI
5. H5: PEC has a positive effect on JPI
6. H6: PEC is shown to significantly mediate GHRM on JPI.
7. H7: PEC is proven to significantly mediate ESG on JPI.

RESULT

Testing the level of data validity is done by comparing the Average Variance Extracted (AVE) value with a value of 0.50 which can be seen in. Table 2. If the AVE value is >0.50, then the data is considered valid, but if the AVE value is <0.50, it is considered invalid. Based on the data above, all variables are considered valid with the following description: ESG (0.554 > 0.50), GHRM (0.583 > 0.50), JPI (0.520 > 0.50), and PEC (0.553 > 0.50). Then reliability testing is carried out by comparing the Composite Reliability value with the value of 0.70 found in Table 2. If the Composite Reliability value is > 0.70, then this data is considered reliable. Based on the data output above, a result is obtained, namely ESG (0.832 > 0.70), GHRM (0.848 > 0.70), JPI (0.812 > 0.70), and (0.831 > 0.70). So it can be concluded that this data is reliable.

Table 2 Outer Model

Variables	Composite Reliability	Average Variance Extracted (AVE)
ESG	0.832	0.554
GHRM	0.848	0.583
JPI	0.812	0.52
PEC	0.831	0.553

The next stage is evaluating the structural model (inner model). Several tests need to be done in the inner model, namely the R square test (R2) and the Q-square test (Q2) through the estimated path coefficient. If the R2 value of 0.19 indicates that the model is in the weak category, 0.33 is categorized as a moderate model, and if 0.67 is categorized as a strong model. Based on the table listed in Table 3 shows that the value of JPI is 0.707 (70.7%) which is classified as a strong model category (>0.67). This can be interpreted that the JPI variable is influenced by GHRM, ESG, and PEC by 70.7% while the remaining 29.3% (100% – 70.7%) is influenced by other variables not discussed in this study. Then for the value of PEC of 0.700 (70%) which is also classified as a strong model (>0.67). From this figure, it can be interpreted that the PEC variable is influenced by GHRM and ESG with a percentage of 70% while the remaining 30% (100% – 70%) is influenced by other variables.

Table 3 Inner Model

Variables	R-Square	R Square Adjusted	Q2
JPI	0.712	0.707	0.66
PEC	0.704	0.7	0.693

Once the R test2 is completed, the Q-Square test (Q2) is the test to perform. UNDERSTANDING. If the Q2 > 0 is considered that the research model has predictive relevance, but if the Q2 > 0 is considered the opposite that the research model built lacks predictive relevance. Based on the results in Table 3 it can be interpreted that JPI has a Q2 of 0.660 (66%). This shows that this variable has predictive relevance (0.660 > 0), while the other 34% are outside this study. Then the PEC value is 0.693 (69.3%), which means that this variable also has predictive relevance (0.693 > 0), while the other 30.7% are outside this study. From these two values, it can be concluded that this study has a good goodness of fit in terms of 1 square.

Furthermore, it is necessary to calculate the Goodness of Fit (GOF) which can be seen in Table 4. There are 3 GOF categories in a study namely small GOF (0.1), moderate GOF (0.25), and large GOF (0.36). Based on the results of these calculations, the GOF value is 0.623. This indicates that the combined performance between the inner and outer models in this study falls into the large GOF category (0.623 > 0.36).

Table 4 Goodness of Fit

Variables	Average Variance Extracted (AVE)	R Square
ESG	0.554	–
GHRM	0.583	–
JPI	0.52	0.707
PEC	0.553	0.7
Average	0.553	0.704

The most important step in this research is hypothesis analysis. Hypothesis analysis is tested using the output of r-square, parameter coefficients, and T statistics. The p-value significance level used is 0.05 (5%), T statistics > 1.96, and the beta coefficient has a positive effect. There are 7 hypotheses developed in this study and the results obtained 4 hypotheses (H2, H3, H4, and H5) that have a positive effect, 1 more hypothesis (H7) also has a positive effect and full mediation, but H1 and H6 otherwise.

 

Picture 2 Hypothesis Analysis

Table 5 Hypothesis Analysis

Hypothesis	Variable	Original Sample (O)	Standard Deviation (STDEV)	T Statistic	P Values	Explanation
H1	GHRM-> PEC	0.086	0.064	1.334	0.183	No effect
H2	ESG-> PEC	0.778	0.06	12.89	0	Positively affected
H3	GHRM-> JPI	0.209	0.066	3.164	0.002	Positively affected
H4	ESG -> JPI	0.34	0.11	3.08	0.002	Positively affected
H5	PEC -> JPI	0.379	0.12	3.16	0.002	Positively affected
H6	GHRM -> PEC -> JPI	0.033	0.03	1.067	0.286	No effect and no mediation
H7	ESG -> PEC -> JPI	0.295	0.095	3.113	0.002	Positively affected and full mediation

DISCUSSION

The first hypothesis, namely GHRM on PEC, shows that Green Human Resource Management (GHRM) does not have a significant influence on Pro-Environmental Consciousness (PEC) because the p-value is greater than 0.05 (0.183). Although GHRM aims to increase environmental awareness in the workplace and attract prospective employees who care about the environment, several studies show that the implementation of GHRM does not necessarily increase Pro-Environmental Consciousness (PEC). One reason is that GHRM may not be enough to change each individual’s attitude or behavior towards the environment. The process of internalizing environmental values requires a more holistic and in-depth approach that depends not only on HR policies but also on organizational culture and top management’s commitment to sustainability. It may also be the case that GHRM initiatives implemented by companies are not sufficiently visible or known to job seekers. Many job seekers may not have sufficient information about the company’s GHRM policy, or the policy has not been effectively socialized (Renwick et al., 2013).

The second hypothesis (ESG on PEC) in this study has a p-value of 0.000 which explains that the ESG variable affects PEC because the value is <0.05. In this hypothesis, there is also a beta coefficient of 0.778 which means that the effect is in a positive form and the T-statistic is 12.890 (>1.96). Good Environmental, Social, and Governance (ESG) practices can improve job seekers’ perceptions of the company’s environmental commitment. Job seekers tend to judge companies based on their reputation in addressing environmental and social issues. Companies that have good ESG practices demonstrate a commitment to sustainability and social responsibility, which can attract job seekers who care about these values. Information about ESG practices is often available through corporate sustainability reports, news, and social media, which helps shape positive perceptions among job seekers (Eccles et al., 2012).

The third hypothesis that has a positive effect is GHRM on JPI (H3). There is a p-value of 0.002 (<0.05) indicating an influence between the two variables, a positive beta coefficient value at 0.209, and a T-statistic value of 3.164 which is greater than 1.96. Environmentally friendly GHRM practices can improve job seekers’ Job Persuit Intention (JPI) by attracting individuals who have high environmental awareness. Job seekers who are attracted to companies with strong GHRM policies tend to have values that align with the company’s goals. When they join, their intrinsic motivation to contribute to the company’s environmental initiatives can improve their work performance. In addition, companies that implement GHRM often provide sustainability-related training and development, which can improve employee skills and performance (Jabbour & Santos, 2008).

ESG on JPI (H4) is the next accepted hypothesis. The p-value is found to be 0.002 (<0.05) which indicates there is an influence between the two variables. Then the beta coefficient value (0.304) which shows the influence is positive, and finally the T-statistic value is more than 1.96 (3.080). Good ESG practices can increase job seekers’ JPI through enhancing the company’s reputation and its attractiveness to qualified job seekers. Companies with strong ESG practices are often seen as better and more stable places to work, which attracts competent and motivated job seekers. Job seekers attracted to such companies tend to have values aligned with the company’s sustainability goals, which can improve their performance upon joining. In addition, good ESG practices create a supportive and ethical work environment, which can improve employee productivity and performance (Fatemi et al., 2018).

PEC on JPI (H5) is the fourth accepted hypothesis. This is evidenced by the p-value of 0.002 (<0.05) which means that PEC affects JPI, a positive beta coefficient value (0.379), and a t-statistic value of 3.160 (>1.96). Job seekers’ perception of corporate environmental commitment (PEC) has a positive effect on their job performance after joining (JPI). Job seekers who have a positive perception of corporate environmental commitment tend to be more motivated and perform better because they feel aligned with the company’s values. When job seekers believe that the company is committed to good environmental practices, they feel more emotionally attached and more eager to contribute to the company’s success, which ultimately improves their performance (Nishii et al., 2008).

The sixth hypothesis further shows that PEC does not mediate the effect of GHRM on JPI. The large p-value (0.286) indicates that this effect is not significant. PEC does not mediate the effect of GHRM on job seekers’ JPI, which may be due to GHRM initiatives not being strong enough or not yet fully adopted by all companies. Although GHRM can directly affect job seekers’ performance after joining, if job seekers do not feel the company’s overall environmental commitment, then PEC will not act as a significant mediator in this relationship. This suggests that to influence job seekers’ PEC, companies need to better integrate and communicate their GHRM initiatives (Dumont et al., 2017).

In addition, some research suggests that while GHRM may increase job-seeking intentions (JPI) among prospective employees, this is influenced more by perceptions of the organization’s reputation and environmental orientation than the prospective employees’ environmental awareness. That is, potential employees may be attracted to organizations that implement GHRM because they see it as a sign of a reputable organization that cares about environmental issues, not because they have high environmental awareness. In addition, moderating factors such as individual environmental orientation and demographic factors (e.g., gender) also play an important role in the relationship between GHRM, PEC, and JPI. For example, individuals with a high environmental orientation are more likely to be affected by GHRM practices than those who are less concerned with environmental issues. Overall, although GHRM has the potential to influence PEC and JPI, its impact is highly dependent on contextual and individual factors, and GHRM implementation alone is not enough to significantly improve both aspects (Naz et al., 2023) (Chaudhary, 2018).

The last hypothesis accepted in this study is H7, which has a mediating variable in it. The mediating variable in the form of PEC successfully mediates the effect of ESG on JPI. The p-value is at 0.002 (<0.05) which proves the influence between the two variables which also shows the successful role of media variables, the beta coefficient is positive with a value of 0.295, and finally the T-statistic value is 3.113 (>1.96). PEC mediating the effect of ESG on job seekers’ JPI suggests that job seekers’ perception of corporate environmental commitment (PEC) is an important factor in explaining how ESG practices can improve their performance after joining. Good ESG practices can shape job seekers’ positive perceptions of the company’s commitment to the environment, which in turn increases their motivation and engagement after becoming employees. This mediation emphasizes the importance of job seekers’ internalization of environmental values to improve their performance at work (Glavas, 2016).

CONCLUSION

The conclusion of this study shows several important findings regarding the influence of Green Human Resource Management (GHRM) and Environmental, Social, and Governance (ESG) on Pro-Environmental Consciousness (PEC) and Job Persuit Intention (JPI). First, although GHRM aims to increase environmental awareness in the workplace, the results show that GHRM has no significant effect on PEC. This indicates that GHRM policies alone are not enough to change individual attitudes or behaviors towards the environment without a more holistic approach and commitment from top management towards sustainability (Naz et al., 2023) (Chaudhary, 2018). In contrast, ESG practices are shown to have a significant influence on PEC, suggesting that companies with good ESG practices can improve job seekers’ perceptions of the company’s environmental commitment. This means that job seekers tend to view responsible and sustainable companies as more attractive places to work.

In addition, this study found that GHRM has a positive influence on JPI. Good GHRM practices can attract individuals with high environmental awareness, which then contribute to their improved performance after joining the company. Sustainability-related training and development provided by the company can also improve employee skills and performance. ESG practices also have a positive effect on JPI, where companies with a strong ESG reputation are seen as better places to work, attracting competent and motivated job seekers, thus improving their performance after joining. Finally, this study shows that PEC mediates the effect of ESG on JPI, but does not mediate the effect of GHRM on JPI. This confirms the importance of job seekers’ perceptions of corporate environmental commitment in explaining how ESG practices can improve their performance after joining. To maximize the positive impact of GHRM on PEC and JPI, companies need to better integrate and communicate their GHRM initiatives. Overall, GHRM and ESG implementation should be done holistically and effectively to achieve the desired results.

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