The association between ethical leadership and environmental activity management: The mediating role of employee environmental empowerment

This study examines the association between ethical leadership and environmental activity management (EAM) [environmental activity analysis (EAA), environmental activity cost analysis (EACA) and environmental activity-based costing (EABC)] and the mediating role of employee environmental empowerment in such an association. Data was collected using an online survey questionnaire from 400 middle and lower-level Australian managers. The results reveal that the relationship between ethical leadership and EAM transpires indirectly, with ethical leadership found to be positively associated with employee environmental empowerment which in turn, exhibits a positive association with the use of all three levels of EAM (EAA, EACA and EABC). Such findings highlight the importance of ethical leadership as a means of enhancing employee environmental empowerment, and subsequently increasing the extent of use of EAM. Accordingly, organisations should endeavour to encourage ethical leadership through leadership training programs and/or the recruitment of appropriate ‘ethical’ leaders. In addition, as employee environmental empowerment fully mediates the association between ethical leadership and the extent of use of EAM, organisations should look to enhance employee environmental empowerment through providing employees with greater opportunities: to discuss and be involved with the development of new environmental management practices; to be actively involved in the development, management and evaluation of environmental management practices; and/or to be involved in strategic decision making regarding environmental management practices.