Carbon Awareness, Green Innovation, and Firm Sustainability: Evidence from the Textile Industry

This study adopts a quantitative explanatory design to examine the relationships among Carbon Awareness, Green Innovation, and Firm Sustainability. A variance-based Structural Equation Modeling approach using Partial Least Squares was employed because it is suitable for predictive research and mediation analysis .
The population consists of textile and garment firms located in West Java, Indonesia. The unit of analysis is the firm, represented by owners, senior managers, or production managers who are knowledgeable about environmental and operational practices. The minimum sample size was determined using the ten-times rule in PLS-SEM, which requires at least ten observations per measurement indicator. This study employs sixteen indicators across three constructs. Carbon Awareness is measured using five indicators covering carbon monitoring, emission consideration in decision making, energy awareness, environmental responsibility, and carbon reduction commitment, adapted from environmental strategy literature. Green Innovation is measured using five indicators reflecting eco-friendly production, cleaner processes, waste reduction innovation, energy efficiency innovation, and environmental process improvement, adapted from green innovation research . Firm Sustainability is measured using six indicators capturing resource efficiency, emission reduction, environmental performance improvement, operational sustainability, long-term performance stability, and sustainable production practices, adapted from sustainability performance literature. Based on the total of sixteen indicators, the minimum required sample is 160 respondents. Data were collected from more than 160 firms using purposive sampling.
Primary data were gathered through a structured questionnaire using a five-point Likert scale. All constructs were modeled as reflective constructs. Data analysis followed two stages: measurement model and structural model evaluation. Convergent validity was assessed using outer loadings and Average Variance Extracted, while reliability was evaluated using Composite Reliability and Cronbach’s Alpha. Discriminant validity was examined using the Heterotrait-Monotrait ratio. The structural model was evaluated using path coefficients, coefficient of determination, effect size, predictive relevance, and bootstrapping procedures. Mediation was tested by examining indirect effects to determine whether Green Innovation mediates the relationship between Carbon Awareness and Firm Sustainability.