Environmental Management Policies, Green Innovation, and Sustainability Indicators: A PLS-SEM Investigation in Emerging Markets

As environmental concerns intensify worldwide, organizations operating in emerging economies face growing pressure not only to formalize environmental management policies but also to implement them effectively. This study examines the sequential mechanism through which Environmental Management Policies (EMP) shape Sustainability Indicators (SI), mediated by Policy Implementation Effectiveness (PIE) and Green Innovation (GI), and moderated by Regulatory Pressure (RP) acting on the EMP–PIE relationship. Grounded in Institutional Theory, the Resource-Based View (RBV), and the Natural Resource-Based View (NRBV), we build an integrated conceptual model comprising nine hypotheses. Applying Partial Least Squares Structural Equation Modeling (PLS-SEM) to survey data collected from 312 managers at Vietnamese firms, we find support for all nine hypotheses. EMP substantially strengthens PIE (β = 0.469, p < 0.001) and exerts a direct effect on SI (β = 0.294, p < 0.001). PIE, in turn, drives GI (β = 0.524, p < 0.001), which further enhances SI (β = 0.468, p < 0.001). The serial mediation path through PIE and GI is also confirmed (β = 0.115, p < 0.001), and regulatory pressure is shown to amplify the EMP–PIE relationship (β = 0.171, p < 0.001). Collectively, the model accounts for 50.3% of the variance in SI. These results extend theory by distinguishing policy formulation from implementation effectiveness and provide practical guidance for policymakers and firm managers navigating sustainability transitions.