The mediating role of green business practices in the process of transforming stakeholder pressures towards environmental sustainability into positive organizational outcomes

In recent decades, environmental degradation and climate change have begun to be significantly felt, increasing stakeholder awareness and sensitivity towards environmental issues. This heightened awareness and sensitivity have led stakeholders to exert pressure on businesses to overcome environmental challenges. Stakeholders view businesses as both sources of environmental problems and as entities capable of playing a significant role in their resolution. Consequently, stakeholders are demanding that businesses develop effective solutions to environmental problems, particularly by implementing green business practices. This study frames its theoretical foundation on stakeholder theory, natural resource-based theory, upper echelons theory and signal theory. It firstly examines the effect of stakeholder pressure for environmental sustainability on the implementation of green business practices by companies. Subsequently, it investigates the mediating role of green business practices in transforming stakeholder pressures for environmental sustainability into outcomes of corporate reputation and environmental performance. The sample of the study consist of the production, marketing, supply-logistics, and human resources departments of companies listed on the Borsa Istanbul Sustainability Index. A total of 640 individuals participated in the study, with 160 individuals from each department. The number of companies reached within the scope of the study is 40, and the analysis of the study is at the firm level. Data collected through online surveys were processed using SPSS 26 software and analyzed using structural equation modeling with SmartPLS 4 software. The findings of the study indicate that stakeholder pressure positively influences green business practices and that these practices play a mediating role in improving corporate reputation and environmental performance. The study offers insights into how businesses can manage stakeholder pressures to achieve their environmental sustainability goals.