Leadership Styles, Digital Capabilities, and Employee Engagement in Driving ESG Compliance in Emerging Market Enterprises

• Abill Robert

  Califonia University

  Author

The integration of environmental, social, and governance (ESG) principles into supply chain operations has emerged as a strategic imperative for enterprises operating in emerging markets, yet the micro-level mechanisms through which leadership and digital transformation influence ESG compliance remain underexplored. This study investigates the micro-foundations of green supply chain management (GSCM) by examining how transformational leadership styles and digital capabilities drive ESG compliance through the mediating mechanism of employee engagement. Drawing on a quantitative research design, data were collected from 402 manufacturing enterprises across Nigeria, Kenya, and South Africa through structured surveys administered to supply chain managers and sustainability officers. Structural equation modelling revealed that transformational leadership significantly enhances employee engagement (β = 0.47, p < 0.001), which in turn mediates the relationship between leadership and ESG compliance (indirect effect = 0.31). Digital capabilities demonstrated a moderating effect, strengthening the leadership-engagement relationship when technological infrastructure maturity exceeded threshold levels. The integrated model achieved 89.4% predictive accuracy for ESG compliance outcomes, substantially outperforming traditional compliance frameworks. These findings advance micro-foundational theory by demonstrating that ESG compliance is not merely an institutional response but emerges from individual-level engagement processes enabled by specific leadership behaviours and digital infrastructure. The study provides actionable insights for managers seeking to leverage human capital and technology simultaneously to achieve sustainability objectives in resource-constrained environments.

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