The present study develops a comprehensive theoretical framework to examine the role of green human resource management (GHRM) in environmental practices in small and medium-sized businesses (SMEs) in Jammu and Kashmir, India. It is based on the natural resource–based view (NRBV) and is supplemented by the ability-motivation-opportunity theory and stakeholder theory. The responses of 412 SME owners in the area were collected using a quantitative survey design, and the hypotheses were verified using structural equation modelling. The results show that GHRM improves environmental awareness, participative leadership and environmental practices. Additionally, the relationship between GHRM and environmental practices is partially mediated by environmental awareness and participative leadership, which emphasises the significance of environmental skills based on leadership and employees. The findings provide key theoretical insights by demonstrating how NRBV-aligned GHRM practices enhance sustainability outcomes in SMEs. They emphasise the critical role of fostering environmental awareness and participative leadership in improving environmental performance. The study further establishes GHRM as a significant predictor of sustainability in SMEs and advocates for the integration of employee-focused and participative practices to drive sustainable development within the sector.
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