Closing the Loop: How Green HRM and Transformational Leadership Drive Employee Circular Economy Behaviors in the Textile Industry

Abstract

The textile industry is globally recognized as a significant contributor to environmental degradation, necessitating an urgent shift from linear production to a Circular Economy (CE). While Green Human Resource Management (GHRM) is known to foster general pro-environmental behaviors, its specific role in driving "circular" behaviors—such as reusing, repairing, and resource looping—remains underexplored. Drawing on the Ability-Motivation-Opportunity (AMO) theory, this study investigates the impact of GHRM bundles on Employee Circular Economy Behaviors (ECEB), mediated by Green Psychological Climate and moderated by Green Transformational Leadership. Data was collected using a time-lagged design from 475 employees across leading textile manufacturing firms. Structural Equation Modeling (SEM) was employed to test the hypothesized relationships. The findings reveal that GHRM significantly enhances ECEB by fostering a supportive Green Psychological Climate. Furthermore, Green Transformational Leadership acts as a crucial boundary condition, strengthening the impact of HR practices on the psychological climate and subsequent circular behaviors. This study offers novel theoretical contributions by distinguishing "circularity" from generic "greening" and provides actionable insights for textile managers to unlock human capital for closing the resource loop.

Keywords: Green HRM, Circular Economy, Textile Industry, Green Transformational Leadership, Green Psychological Climate, AMO Theory.