The Financial Impact of Green Transformation-Based Competencies: Does Green IS Play Just a Supporting Role?

Competencies such as product stewardship and pollution prevention are essential for a firm's pursuit of environmental sustainability. Yet, not all firms willingly develop these competencies. Among others, firms that have a strong entrepreneurial orientation are better placed to adopt product stewardship and pollution prevention. Additionally, the implementation of green information systems (Green IS) could significantly moderate the effect of these competencies on the firm's financial performance. Against this backdrop, a competency-based model is proposed to conjecture the role that Green IS could play in strengthening the influence of entrepreneurial orientation (resource-based competency) on product stewardship and pollution prevention (green transformation-based competencies) as well as the effect of these green transformation-based competencies on financial performance. We test a moderated mediation model using data collected from US manufacturing firms. While we hypothesize Green IS to play a supporting role, interestingly, our results seem to suggest that it is rather pivotal when it comes to the development of green transformation-based competencies.