SUSTAINABLE HR PRACTICES: INTEGRATING ESG (ENVIRONMENTAL, SOCIAL, GOVERNANCE) GOALS IN HUMAN RESOURCE MANAGEMENT

Abstract

This study examines the impact of integrating environmental and social goals into human resource (HR) practices on employee performance, with employee engagement as a mediating variable. Using a quantitative research design, data were collected from 95 employees at PT Kartanegara Energi Perkasa and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal that environmental goals integration influences employee performance indirectly through engagement, while social goals integration has both direct and indirect effects. These results underscore the critical role of sustainability-oriented HR practices in fostering employee engagement and enhancing organizational performance. By bridging the gap between sustainability initiatives and workforce outcomes, this study contributes to the literature on sustainable HR practices, emphasizing the strategic value of integrating environmental and social goals in workforce management. Practical implications suggest that organizations should prioritize employee engagement as a key driver in aligning ESG objectives with performance outcomes. Future research should explore these relationships across different industries and cultural settings to expand the generalizability of the findings.