Introduction

China possesses the dual distinction of being both the world’s largest manufacturing center and the leading emitter of CO2 emission1,2. However, the environmental challenges connected to its industrial dominance extend far beyond CO2 emission. The utmost significance of safeguarding the environment, commonly called environmental protection (EP), is particularly evident within the manufacturing industry3,4. While this industry is important for China’s economic expansion5,6 it also significantly contributes to the deterioration of the environment7. Rapid industrialization has resulted in many issues, such as air and water pollution, deforestation, resource depletion, and toxic waste generation8. All these effects pose enormous threats to local ecosystems and human health and the global environmental balance9,10. Addressing these issues is an economic imperative and a moral obligation to resolve these multifaceted environmental issues with sustainable production strategies. Doing so diminishes the sector’s long-term risks, improves energy efficiency, material optimization, pollution control, waste reduction, and increases innovation11. To accomplish these results, China must continue to invest in clean technologies, establish strict regulations, and ensure corporate responsibility12. These collective behaviors are essential to lessen the industries’ adverse environmental impact and better secure sustainability in the future13,14.

Carbon footprint methodologies (CFM) extend beyond CO2 emissions to a wider environmental management framework. They identify high-carbon processes and yield data on water usage, hazardous waste, and inefficient raw material usage15,16. CFM also enables a product life cycle viewpoint, measuring CO2 emissions from raw material extraction through distribution, production, usage, and end-of-life disposal17. Considering the growth of climate change and resource depletion concerns, CFM introduces data-driven methods to develop sustainable products18. As global climate efforts intensify, implementing these methodologies has become advisable and considered essential19. Organizations that execute CFM achieve both enhanced environmental performance and competitive advantage in a market increasingly shaped by environmentally sustainability-conscious consumers.

China’s manufacturing industry, especially electronics, textiles, footwear, agriculture, and machinery, is characterized by high environmental burdens, not only in the form of CO2 emissions but also in energy intensity, waste generation, and water usage20,21. By implementing CFM, organizations can recognize ecological hotspots and rank projects that improve efficiency and environmental sustainability22,23. For instance, life cycle assessment approaches enable businesses to analyze environmental factors for disposal choices, material sourcing, and production24.

Sustainable product development (SPD) complements the CFM by introducing environmental considerations throughout a product’s life cycle, from its design to its ultimate disposal. This reduces the CO2 emissions, environmental degradation, resource consumption, and generation of waste25. SPD is an important factor in the sustainable development of the manufacturing sector in countries with large industrial bases26. By incorporating carbon footprint assessments into the product design, manufacturers can enhance material selection and production efficiency, ultimately producing products that reduce emissions and facilitate easy recycling or reuse27. For example, Haier, a dominant player in the global home appliances market, uses CFM in design to conserve energy and choose eco-friendly materials, showing its interest in green innovation28. Additionally, SPD assists in streamlining supply chains by recognizing high-carbon-emitting nodes and improving partnership relationships with suppliers to minimize carbon consequences29,30. In China’s vast and globally incorporated supply chain, such partnerships can encourage sustainable transportation and procurements31,32.

Furthermore, SPD plays a double role in environmental protection. First, it influences EP by promoting the development of green products, conserving resources, and reducing waste generation33. As such, industries can actively minimize their ecological impact and contribute to a more sustainable future34,35. Second, SPD intermediates the CFM connection with EP, incorporating sustainability standards into product development and offering a holistic understanding of environmental performance. This mediating SPD role fills the research gap and improves understanding of how CFM can facilitate broader sustainability goals. Nonetheless, numerous studies have focused on environmental strategies like CFM in specific industries; few have investigated the direct and indirect paths linking these approaches to green production innovation and development in Chinese manufacturing36,37. Additionally, despite the prevalence of recent literature focusing on sustainability, empirical evidence is required on how CFM impacts product eco-design, material sourcing, and optimization of the supply chain under China’s dynamic market conditions38. Our work fills this gap by exploring whether CFM, integrated with SPD, can facilitate regulatory compliance and satisfy both local and international sustainability expectations.

Moreover, with global attention turning to sustainable development, manufacturers need to reduce CO2 emissions and monitor and improve a range of environmental metrics. Fulfilling regulatory obligations guarantees that these well-intentioned endeavors are not mere rhetoric but translate into tangible measures39. By adhering to established environmental regulations and standards, manufacturers quantify their environmental impact and actively oversee and mitigate it39,40,41. Compliance mechanisms ensure the attainment of the objectives stipulated by these regulations42 furnishing the manufacturing sector with a structured pathway to ecological responsibility. In this manner, regulatory compliance addresses the research void by serving as the conduit connecting policy goals with on-the-ground sustainable practices, thereby ensuring the active participation of the manufacturing sector in EP. Consequently, the study’s ultimate goal is to explore the moderation of regulatory compliance on the CFM–EP relationship.

Following the above discussion and research gaps this study’s goal is.

  1. (1)

    To examine the direct impact of CFM on SPD and EP.

  2. (2)

    To explore mediating role of SPD between CFM and EP.

  3. (3)

    To assess moderating role of regulatory compliance between CFM and EP.

Literature review

Theoretical background

The triple-bottom-line theory (TBLT), which Elkington43 developed, offers theoretical support for understanding sustainable development by incorporating three interdependent pillars: economic, environmental, and social performance44. The purpose of the TBLT is to satisfy the resource needs of present and upcoming generations without affecting the environment45. The TBLT is also referred to as the sustainable economic development theory46. In contrast to conventional business models emphasizing financial performance, the TBLT posits that long-term sustainability can be achieved when giving equal importance to environmental protection and social responsibility in addition to economic viability47.

In our research, CFMs are an organization’s environmental management strategy that relates directly to the environmental dimension of the TBLT48. By measuring CO2 emissions and resource usage along product life cycles, CFM enables firms to minimize ecological damage by making decisions based on evidence49,50,51. Simultaneously, CFMs increase economic sustainability by enhancing operational effectiveness, lowering energy costs, and minimizing regulatory risks52. Therefore, CFM is the intersection of economic and environmental responsibility.

Furthermore, SPD is a strategic enabler of the TBLT dimensions. In particular, environmentally, SPD facilitates resource-efficient products and the design of low-emission goods that reduce ecological degradation53,54. Socially, it promotes sustainability by ensuring worker safety through reduced exposure to hazardous chemicals, and consumer health by non-toxic and recyclable products. It also provides inclusive employment through promoting green skills and eco-innovation demand, aligning with social welfare goals55,56. Economically, SPD promotes differentiation and innovation in competitive markets. It enables companies to develop new revenue sources in the form of sustainable products, address customers’ demands for sustainability-driven needs, and lower operational expenses by enhanced material efficiency and design optimization. These actions create long-term profitability and market durability25,57. Considering this, SPD serves as a mechanism to translate sustainability intention into product-level effects, echoing the overall nature of the TBLT.

Moreover, EP, a dependent construct of our research, is directly related to the environmental dimension of the TBLT. It is reflected in tangible results like CO2 emissions reduction, pollution prevention, and ecosystem conservation, which protect natural systems while supporting brand legitimacy and stakeholder trust58,59. By connecting these CFMs, SPD, and EP, our research positions the TBLT as a theoretical framework to understand how internal environmental practices like CFM and innovation strategies like SPD can have significant environmental consequences. The model confirms the growing perception that achieving sustainability is not a discrete task but a coordinated effort across functions founded on ecological responsibility, economic prudence, and social sensitivity.

Hypotheses development

Relationship of CFM with SPD and environmental protection

Carbon footprints are the overall standard measure of GHG emissions along the entire value chain of consumer goods, from processing to production and retailing60,61. Liu et al.62 defined it as the sum of GHG, an entity, individual, product, process, or event emitted into the atmosphere within a given boundary. Accordingly, CFMs are structured frameworks formulated to estimate, evaluate, and quantify the sum of GHG emissions, usually expressed in terms of CO2 equivalents, related to a particular event, process, and commodity63,64. Chang et al.65 argued that CFMs and information allow organizations to enhance their sustainability outcomes by providing tools to measure ecological impacts. Besides, CFMs not only measure environmental harm, but they also enable companies to act. By identifying energy-using operations, they promote environmentally sound product design, foster waste reduction, and help long-range planning for sustainability15,66.

Earlier studies also emphasized the significance of CFMs in understanding the impact of activities by organizations on global sustainability64. These methodologies provide a framework for measuring and managing the level of CO2 emissions, which could be used to determine benchmarks for products, analyze trade-offs, and measure performance67. According to Majewski et al.68 companies utilize CFMs to diminish their environmental effects through the process or product life-cycle-related emissions analysis. This enhanced level of awareness and consolidated approach further contribute to the defense of ecosystems, the reduction of pollution, and the holistic mitigation of climate change. Sun et al.69 further that carbon footprint estimation methodologies support environmental conservation by promoting transparency and accountability. Moreover, Çelekli and Zariç70 also emphasize the significant role of CFMs in assessing environmental impacts and monitoring GHS emissions. Hence, by offering firms a proper understanding of their carbon footprint, CFMs support better decision-making and also provide organizations with guidance on eco-friendly alternatives and sustainable initiatives. Therefore, proposed that

H1: CFM has a significant impact on EP.

Apart from tracking the emissions, CFMs also offer essential information that facilitates SPD71. They impact material choice, design creativity, and effective manufacturing processes72,73. This helps companies develop ecologically sound products proactively. As organizations seek to reduce CO2 emissions, many invest in R&D to discover environmentally friendly alternatives74. This commitment to developing a culture of innovation has environmental benefits and helps businesses stay ahead with the increasing market demand for sustainable products. For instance, Delmas and Nairn-Birch75 observed positive effects of CFMs on the United States companies’ performance, whereas Chang et al.65 reported a similar impact on Fortune 500 companies’ environmental performance. Alqahtani76 also evidenced a positive impact of CFMs on Saudi-based firm performance.

Importantly, CFMs such as environmental-priority-strategies and life-cycle-assessments were found to guide and improve SPD among companies in Taiwan77. Similarly, Blagu et al.78 observed that Romanian companies employed CFMs like IDOV (identify-design-optimize-verify), SIPOC (supplier-input-process-output-customer), and 4Rs (reduce-repair-reuse-recycle) to improve SPD. Winter et al.79 also reported that CFMs enable easier comparisons among alternative production situations to advance decision-making in SPD by shedding light on hidden assumptions and uncertainties. Hence, proposed that

H2: CFM has a significant impact on SPD.

Relationship of SPD with environmental protection

As previously discussed, the TBLT addresses interrelated levels of sustainability that consider economic, environmental, and social dimensions43. Regarding product development, the environmental aspects are of particular relevance in accordance with sustainable product development49. SPD refers to a company strategy through which environmental and social considerations are integrated into every step of a product’s life cycle from production through use to disposal at end-of-life65. A sustainable product is designed, manufactured, and discarded in manners that minimize harm to the environment but preserve resource efficiency, economic competitiveness, and social responsibility throughout the product life cycle80. Such products will use eco-friendly materials, energy-efficient production processes, longer life, and reusable or recyclable designs81. SPD allows businesses to take the lead in preventing ecological harm by manufacturing products that meet existing environmental regulations and stay ahead of future requirements for sustainability82. In doing so, SPD embodies the TBLT by addressing environmental conservation, economic profitability, and social responsibility at the same time. Further, adopting SPD methods through eco-friendly materials, energy efficiency, and waste reduction is based on the environmental modernization theory. This theory puts forward the notion that, through sustainable innovation, enterprises are in a position to attain balanced economic growth along with environmental sustainability53,83,84.

SPD significantly impacts EP, enabling the eco-design and manufacture of sustainable products with reduced waste and less energy use and alleviating environmental repercussions associated with different activities. It is accepted as a strategic imperative that professionals integrate sustainability issues into the product development process to underline a proactive commitment to the preservation of the environment85. Through SPD procedures, enterprises can reduce their products’ ecological effects tremendously84. This is particularly important because more than 80% of a good’s total ecological effect is identified during the SPD process itself86. According to Han87 environmentally sustainable behavior that includes dimensions of green products has a significant impact on the environment. Existing studies have also documented a significant connection between SPD and EP of an organization, such as Katsikeas et al.85 observed among UK manufacturing companies. Studies also reported that SPD and innovation help a company be more environmentally sustainable33,83,88. This study, therefore, postulates that:

H3: SPD has a significant influence on EP.

SPD as mediator

While CFM provides company tools to analyze and track the ecological effects of their products and processes, especially CO2 emissions, possession of such information alone does not automatically lead to better environmental performance60,64. Rather, it is via the strategic applications and active use of SPD that enables organizations to convert such knowledge into actual sustainability results33,49,66,85,89.

SPD enables companies to redesign their product development processes to decrease the use of resources and CO2 emissions and limit the overall environmental impact25,34. It is an effective means that facilitates integrating carbon footprint information into material selection, manufacturing procedures, and decisions on product lifecycle management90. From this view, SPD neatly falls under the environmental dimension of the TBLT since it allows organizations to proactively protect against environmental degradation rather than reactively compensate for it91.

Researchers confirm that organizations utilizing CFM to guide eco-design92,93 and green innovation and process practices94 tend to be more likely to improve firm sustainability outcomes95,96. For example, in the industrial sector, carbon assessments typically drive decisions to exclude toxic inputs, substitute green materials, or extend product lifecycles—all results facilitated by SPD activities97,98. Therefore, SPD is the action layer bridging CFM’s diagnostic capacity with the firm’s sustainability impact. Additionally, the TBLT supports that SPD reinforces sustainability goals and improves economic and social performance56,57. Therefore, it is proposed that:

H4: SPD significantly mediates the CFM–EP relationship.

Regulatory compliance as moderator

Compliance monitoring is essential for an organization to be compliant with environmental legislation, reduce personal ecological footprint, and sustain natural resources. Compliance is the act of operating based on guidelines, laws, or standards that are in place42. In regard to the environment, compliance refers to conformation with guidelines purely meant for environmental protection40. In fact, the scale and number of environmental restrictions have increased a lot over the past few decades41. These regulations are developed to protect the environment and preserve it39.

Institutional theory posits that “firms are reliant on contingencies within the institutional environment; thus, they must adhere to social norms, regulations, and patterns in order to establish legitimacy”99. For example, to reduce their environmental impact, electronics manufacturers have been obligated to implement CFM under the European Union’s restriction of hazardous substances directive100. The government, which possesses and distributes ample resources, serves as a leading institution that influences enterprises, driving them to prioritize and oversee their development in China101.

Among various approaches, environmental regulation assumes a critical role as a policy instrument for promoting corporate environmental behaviors102. Research indicates that the government addresses the contamination behavior of companies by implementing ecological regulations. These regulations mandate firms to employ technological innovations to decrease and manage the extent of pollution103. CFM provides companies with a framework to measure and control their carbon footprint, which in turn can enhance EP104.

Conversely, adherence to regulatory frameworks can enhance the performance of CFM by giving companies a highly organized operational context105. Compliance with regulations can also impact CFM implementation and performance. For example, companies doing business in nations that have stringent environmental regulations will adopt CFM practices in an attempt to gain compliance and prevent fines106. Companies that value compliance with regulations are also more susceptible to investing in technological advancements that aim to lower their environmental footprint107,108. Previously, environmental laws have been noted by Zhao et al.109 to function as a negative moderator in the link between knowledge spillover and the green economy. In contrast, Zhao et al.110 did not find a moderating impact of environmental regulatory enforcement on the link between news media restrictions, community resident constraints, and sustainable technology innovation. However, it has only shown a positive moderating effect on the link between ENGO constraints and sustainable technological innovation110.

On these lines, the research assumes that CFM provides firms with a systematic way of assessing and managing their CO2 emission and, in the process, enhances their environmental accountability. In cases of high regulatory compliance, firms are forced to observe and implement even higher standards of environmental conservation, which ultimately exaggerates the impact of CFM on environmental conservation. Another forcing function that takes the form of an external factor is strict adherence to regulatory requirements, which helps reinforce the effectiveness of CFM in leading any organization toward green or environmentally sound practices111. That is to say; there is a very close interdependent relationship between CFM and regulatory compliance; therefore, the conscientious execution of carbon reduction strategies could be influenced not only by internal effort but also by an external regulatory framework101,102,103. Nevertheless, considering the CFM context, the moderating role of regulatory compliance has not been observed. Therefore, the study suggests that:

H5: Regulatory Compliance moderates the relationship between CFM and EP, such that the relationship is stronger when regulatory compliance is high.

Method

Sampling and procedure

The present work utilized quantitative research by means of a survey questionnaire approach. To ensure the robustness of the scales, a two-stage validation process was carried out, which included a pre-test and a pilot study, as suggested in the prior work of Junfeng et al.112 in the context of Chinese manufacturing companies. The pre-test consisted of measuring face validity, in which a panel of academic specialists in environment-related specialization, human resource management, and an organization’s management (e.g., CEO) reviewed the survey questionnaire. The researchers came up with a number of areas that required improvement, including ambiguity in item wording and inconsistency in terminology within constructs, which were corrected by wording refinement and harmonization with universally acceptable academic language.

After the pre-test, the pilot study for 30 of SME manufacturing workers examined the instrument’s reliability and ease of use. The participants provided feedback through questionnaires and short follow-up interviews. The major problem that was faced was one of clarity for some items due to a loss in translation from English to Chinese113. Participants also recommended reducing the complexity of some instructions and enhancing the layout for better readability and flow. Following this feedback, changes were made, including revisions to the question-wording. For example, one of the original items of the environmental protection construct, “Our products have a positive impact on the environment and people’s health,” was revised to “Our products support environmental protection and contribute to human health.” In addition, instructions and overall questionnaire layout were refined to provide clarity and contextual relevance. Results from the final pilot test revealed that all variables had acceptable internal consistency, with Cronbach’s alpha values all above the 0.70 threshold, revealing the strong reliability of the scales applied.

The research chose China, specifically the manufacturing sector, as the study setting, given that it is the world’s leading carbon emitter1,114. Additionally, the study targeted manufacturing sector employees as its sampling frame. The research employed the non-probability sampling method, explicitly utilizing the snowball sampling technique. This approach is deemed suitable for obtaining a representative sample, particularly when participants are chosen based on their willingness to engage in the research115.

Furthermore, to enhance the validity of the responses and create more meaningful data on organizational decision-making, the sample was selected purposefully to consist of respondents from various hierarchical levels, namely, lower, middle, and top management, across several manufacturing industries. The inclusion of employees with job positions directly associated with operations, strategy, and sustainability ensures that the answers represent a range of well-informed views regarding environmental practices. This approach enables the investigation of how work functions shape views of CFM, SPD, and EP, and issues with the representativeness of data obtained.

Before distributing the questionnaire survey forms to companies engaged in green practices and actively participating in social responsibilities, written informed consent was obtained from all participants, clearly outlining the objective of the research, their rights, and how their data responses would be utilized. They were assured of anonymity and confidentiality, with their responses treated with the utmost respect and confidentiality. Besides, their responses would not be shared and solely used for the study’s purpose. The study’s sample size, calculated through G∗Power analysis, was deemed sufficient, surpassing the minimum requirement of 105. Additionally, the study employed the approach outlined by Kline116 which suggests that each item within a construct should have a minimum of 10 responses. Therefore, considering the five constructs comprising 16 items, the study requires a sample size of 160.

Participants information

Of the 600 distributed questionnaire survey forms via email and WeChat, 429 valid responses were collected, representing a 71.5% response rate. The gender distribution indicates that 266 (62.0%) of the respondents are male, while 163 (38.0%) are female. Among the participants, 103 (24.0%), 122 (28.4%), 142 (33.1%), and 62 (14.5%) were aged 18–25, 26–35, 36–45, and over 45 years old, respectively. Concerning the participants’ education, 61 (14.2%) had completed high school, 163 (38.0%) had bachelor’s degrees, and 205 (47.8%) had master’s and other level degrees and certifications. Related to the number of working experiences, 103 (24.0%) had < 5 years, 183 (42.7%) had 5–10 years, and 143 (33.3%) had over 10 years. Concerning their position in the company, 62 (14.5%) were working at lower levels, 203 (47.3%) at middle levels, and 164 (38.2%) at top levels. Lastly, related to the companies, there were 130 (30.3%) electrical, 144 (33.6%) textiles, 94 (21.9%) footwear, and 61 (14.2%) agricultural machinery-producing companies, respectively (see Table 1).

Table 1 Demographical information.
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Measurement and questionnaire

Before administering questions rated on a five-point Likert scale related to the study construct, demographical questions (e.g., age and gender) were requested to be answered (see Table 1). Regarding the instruments, the 5-items were used to assess CFM adapted from Bayraktar117 and Lin118. GPD was measured using 3 items adapted from Jabbour et al.119. EP was assessed using 3 items adapted from Severo et al.120. Lastly, regulatory compliance was measured using five items adapted from López-Gamero et al.121 and Pelletier et al.122. Details of the scale items are presented in Appendix A.

Common method, non-response, and multicollinearity bias issues

Initially, to measure the occurrence of non-response bias, a t-statistics comparing the earlier and later 50 responses was carried out. The result indicated the absence of significant differences among groups, signifying that non-response bias was not an issue for our data set123,124. Secondly, for common method bias, Harman’s test explained 39.7%, which is < 50% cutoff of the overall variance125meaning that common method bias was not present (see Appendix B and Appendix C). Thirdly, variance inflation factors (VIF) were also computed to examine the multicollinearity of the constructs, whereby both outer and inner model VIF values were found below the suggested cutoff of 3.33126, hence confirming the lack of multicollinearity (see Table 2).

Results

Data analysis

SmartPLS, devised by recent environment-based studies115was utilized for conducting partial least square structural equation modeling (PLS-SEM). SmartPLS was selected as the most suitable choice for our work because of its capacity to manage complex interactions between variables127. The rationale for choosing PLS-SEM over other structural modeling techniques is that it has several advantages: it can be used in an exploratory study, requires small sample sizes, can run non-normal data and complex models, and can be applied to both reflective and formative constructs123,128,129. Further, PLS-SEM is a better option for this study because other covariance-based models necessitate larger sample sizes and normal data and are less acceptable for exploratory experiments128. Considering the above discussions, we used PLS-SEM to validate the formulated hypotheses. The research findings are presented in a two-step approach: measurement and structural models.

Measurement model

Assessment of convergent validity and individual item reliability

First of all, confirmatory factor analysis was conducted to measure the fitness of each item on its respective construct. As suggested in the literature, factor loading should be greater than the 0.700 threshold. Subsequently, convergent validity using the average variance extracted (AVE), composite reliability (CR), and CA was measured. Concerning these measures of convergent validity130 proposed that the mentioned indicators (AVE, CR, and CA) must exceed the 0.5, 0.700, and 0.700 cutoff, respectively (see Table 2). Hence, RC4 = 0.673 < 0.70 was deleted. This affirms that the measurement scales exhibit robust consistency and validity.

Table 2 Assessment of multicollinearity, convergent validity, and reliability.
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Assessment of discriminant validity

Prior studies proposed the Fornell-Larcker and Heterotrait-monotrait (HTMT) ratio criterion as a measure for an evaluation of discriminant validity123,128,129. At the measurement scale-level, this validity is considered satisfactory when items exhibit a higher association with their respective variables than with any others130. Additionally, on the construct-level, it is deemed adequate if the “square root of the AVE” for each construct surpasses the correlations among the other variables131 (see Table 3). Moreover, the HTMT ratio of the study observed < 0.85 and 0.090 suggested cutoffs130 and reported in recent literature124,129 (see Table 3).

Table 3 Assessment of discriminant validity.
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Structural model

Before assessing the structural model, it was proposed to double-check multicollinearity concerns between constructs using the variance inflation factor test128,129. Table 2 demonstrates the result of VIF values from 1.245 to 1.473 for an inner model, which falls below the 3.33 proposed threshold130. Subsequently, this model was assessed by examining the variance amount (R2), the significance of hypotheses, and predictive relevance. The model demonstrated the ability to account for 17.3% of the variance in SPD and 35.2% in EP (see Fig. 1). Furthermore, a blindfolding test was conducted to determine the Q2 value130. The Q2 values for SPD and EP were found to be 0.134 and 0.232, respectively. Given that both values exceed zero, the model of the study was deemed to possess predictive relevance (see Table 4). Additionally, our work also includes assessing the effect sizes or f2which are suggested to measure the strength of correlations between variables130. The f2 values of < 0.020, 0.020 > f2 < 0.150, 0.150 > f2 < 0.350, and f2 > 0.350 represented no, small, medium, and large effects, respectively128. Our research reported in Table 4 displays a medium effect of CFM on SPD (0.209 > 0.150 < 0.350), while the effect of SPD on CFM on EP (0.046 > 0.020 < 0.150), SPD on EP (0.138 > 0.020 < 0.150), and moderation effect (0.023 > 0.020) is concluded as weak. Lastly, bootstrapping was used to ascertain the significance of the path coefficients. Table 4 reveals that all five hypotheses were significant (p < 0.05 and 0.001) and therefore accepted. Moreover, in model fit indices normally used in SmartPLS, the standard root mean square residual value is 0.073, which is less than the 0.08 suggested cutoff130.

Table 4 Assessment of structural model.
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Fig. 1
figure 1

Structural equation modeling.

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Fig. 2
figure 2

Moderation effect of regulatory compliance on the relationship between CFM and EP.

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Discussion

The findings include a positive and significant impact of CFM on EP (β = 0.208, t = 3.178, p = 0.001), validating the acceptance of H1. This implies that enterprises leveraging CFM in their operational practices, particularly in evaluating the effects of product development and actively considering CO2 emissions in design processes, contribute positively to environmental and public health considerations. This suggests that the strategic use of CFM aligns with environmental sustainability and results in tangible benefits for broader ecological and public health concerns. The findings underscore the instrumental role of CFM in fostering environmentally responsible practices within organizations, with potential ripple effects on broader societal well-being. This outcome aligns with Hiss67 Loyarte-López et al.64 Majewski et al.68 and Sun et al.69. Practically, Xiaomi Corporation reported that CFM, such as reducing the use of plastics in smartphones (e.g., Xiaomi 11 and Xiaomi 11i series, and Xiaomi 12 series) and reduction of metal use by nearly 25%132. This resulted in a decrease of 132 metric tons of plastic, the conservation of 30 thousand cubic meters of natural gas and 30 thousand kWh of electricity, and a reduction of 84 metric tons of CO2 emissions.

Regarding the effect of CFM on SPD. The analysis indicates a substantial and statistically significant impact of CFM on SPD (β = 0.416, t = 9.322, p = 0.000), substantiating the support for H2. This result underscores the pivotal role of CFM in shaping organizations’ dedication to SPD practices. The observed positive influence of CFM on SPD suggests that companies integrating CFM into their operational frameworks demonstrate an enhanced commitment to environmentally conscious product development. Specifically, when enterprises employ CFM to assess the environmental impact of product development, identify avenues for reducing CO2 emissions, and actively incorporate carbon considerations into product design, it culminates in tangible waste reduction and optimizing energy efficiency within the product development lifecycle. This research outcome is inconsistent with the findings presented by Waris, et al.133 asserted that trade exacerbates CO2 emissions in nations characterized by medium to high emission levels, that innovation in patents is a contributing factor to the escalation of emissions, and that renewable energy serves as a mitigating factor for CO2 emissions in countries classified as having low to medium emerging economies. A study within Japanese manufacturing enterprises revealed an inverse correlation between green research and development activities and CO2 emissions134. However, our research result is in line with the study of Loyarte-López et al.64 and Lydia et al.66. Practically, this work result is supported by Adidas and Apple, which emphasize the vitality of CFM. For instance, Adidas reported that the CFM quantifies, monitors, and ensures transparency regarding carbon footprint across the entire value chain, encompassing material extraction, manufacture, processing, product assembly, operations, logistics, product use, and disposal135. Similarly, Apple reported that it often used CFM throughout the entire product life cycle, enabling it to decrease emissions by 67% since 2011 and achieve 100% neutrality in SPD by 2030. Additionally, the company implements recycled water, zero waste, and renewable content policies136.

In investigating the relationship between SPD and EP, the study discerns a positive and significant influence (β = 0.334, t = 5.968, p = 0.000), thereby supporting the acceptance of H3. This result suggests that manufacturing companies, when integrating sustainable considerations into their product design and life cycle processes, particularly in addressing the adverse effects of CO2 emissions, realize tangible benefits regarding environmental performance. Further, this outcome emphasizes the pivotal role of SPD in reducing environmental impact, contributing to the well-being of individuals, and fostering overall environmental protection. It implies that organizations that actively engage in sustainable practices throughout the product life cycle are more inclined to accomplish positive environmental outcomes and subsidize protecting the environment’s sustainability and public health. This result of the study is supported by Aftab et al.88 Hafezi and Zolfagharinia33Han87 and Singh et al.83. Moreover, the study results align with the results of Apple, Huawei, and Xiaomi, published in their annual reports, which reflected that their SPD improves EP132,136,137. For example, by using SPD, Huawei generated 695.1 billion kWh of green power, and Huawei saved 19.5 billion kWh of electricity137. Apple saved 15.7 million kWh136 and Adidas reduced 42% of CO2 emissions by launching the Adizero Lightstrike product135.

The study provides compelling evidence for elucidating the mediation dynamics between CFM and EP through SPD. The findings substantiate that SPD not only exerts a direct influence on EP but also serves as a significant indirect mediator in the correlation between CFM and EP (β = 0.139, t = 4.691, p = 0.000). The result strongly supports the acceptance of H4. This mediation effect indicates that the positive effect of CFM on EP is not direct but is also channeled through the intermediary role played by SPD. It further underscores that CFM’s positive effects on EP are partly due to integrating green practices in product development. Accordingly, such nuanced understanding lends itself to a fuller understanding of how sustainability initiatives interplay with methodologies in affecting environmental outcomes. Previous studies by Correa et al.49Diaz et al.86Hafezi and Zolfagharinia33Katsikeas et al.85Lydia et al.66and Nag et al.89 provide support for the mediating role played by the SPD. For example, Siemens Gamesa renewable energy has achieved notable advancements in minimizing its CO2 emissions through its sustainability endeavors. In alignment with its pledge to attain carbon neutrality, SGRE has enacted a variety of strategies aimed at diminishing GHG emissions originating from its operational activities and supply chain138. Furthermore, SGRE’s initiatives exemplify the potential for the integration of CFM and SPD to realize substantial environmental gains.

In exploring the moderation effect of regulatory compliance on the correlation between CFM and EP, the study reveals a noteworthy and significant moderation effect (β = 108, t = 2.749, p = 0.006). This compelling evidence substantiates the acceptance of H5. This result implies that regulatory compliance does play a massive role in forming the strength of the CFM–EP relationship. Further, it suggests that where regulatory compliance is high, the positive impact of CFM on EP would then be enhanced (see Fig. 2). This result implies that stringent adherence to regulatory standards amplifies the positive environmental outcomes of implementing CFM. In other words, organizations operating within robust regulatory compliance exhibit a more pronounced positive relationship between their utilization of CFM and the EP measures they undertake. Such nuanced understanding further underpins the role that regulatory frameworks can play in influencing the effectiveness of sustainability initiatives within the broader context of environmental sustainability. Hence, the finding is consistent with previous work by Huang & Lei102 Li et al.101 and Li et al.103. For instance, the European Union’s adoption of the European Union’s emissions trading system is an example of the influence of regulatory compliance on CFM. By capping GHG emissions and enabling firms to trade emission allowances, the European Union’s emissions trading system has encouraged businesses to embrace CFM strategies, resulting in enormous emission reductions139. Firms such as ArcelorMittal, one of the largest steelmakers, have witnessed significant emission intensity decreases, thereby demonstrating the effect of compliance with regulations on CFM effectiveness in producing environmental advantages140.

Theoretical implication

This research has added a great deal to the TBLT and literature associated with carbon footprint to further enlighten how CFM, SPD, and EP are complexly related. The findings show that CFM is more crucial to be shaped regarding the commitment firms are dedicated towards environmental sustainability, which significantly affects SPD and EP. It corroborates earlier studies in validating the view that CFM drives the creation of green products18,19.

Furthermore, the investigation reveals a favorable correlation between CFM and EP, emphasizing the environmental and societal advantages of incorporating CFM into the procedures of product development48,50,118. This accentuates the involvement of CFM in cultivating practices that are environmentally conscious and making contributions to the overall welfare of society48.

The research also reinforces the TBLT through the effect of SPD on EP46 thereby underpinning the relevance of sustainable practices within the product life cycle17,86,89. In addition, this study finds SPD to be a leading indirect mediator of the relationship between CFM and EP86. It provides an in-depth understanding of how all sustainability initiatives put together impact environmental outcomes.

Lastly, regulatory compliance moderates the CFM–EP relationship, as the interaction effect in the current study is highly significant. This, therefore, underlines the role of regulatory settings in enhancing the strength of the link, suggesting that compliance enhances the positive environmental performance effects of the adoption of CFM33,103. It contributes to the overall understanding of contextual factors that affect sustainable efforts and, therefore, extends the existing literature on the regulatory framework as a moderator in the CFM-EP link39,109.

Practical implication

The research benefits engineers and managers operating in manufacturing organizations by improving the organization’s economic, environmental, and social performances. First and foremost, SPD relies on integrating CFM into operation systems. Assessing and mitigating ecological impacts reduces wastage and enhances energy efficiency. One such recommendation is to include carbon considerations at every product life cycle stage, such as design, marketing, production, and others. For instance, companies are encouraged to use smart sensors and automation to reduce energy consumption. These CFMs enable companies to control and monitor energy usage in real time, improve machine performance, and reduce waste, resulting in lower costs (economic), reduced pollution (environmental), and decreased effects on human health (societal).

The advantages of integrating CFM and SPD can be universally applicable across diverse manufacturing sectors globally, irrespective of the variances in regional regulatory frameworks and sustainability obstacles. For example, within the European Union, manufacturers may employ CFM to adhere to the Eco-design directive, which establishes energy efficiency criteria for various products. Similarly, in the United States, manufacturers can implement CFM to fulfill the Environmental Protection Agency’s sustainable materials management program requirements. Moreover, nations with developing economies, such as India and Brazil, stand to gain from adopting CFM and SPD to tackle their specific sustainability issues, including rapid industrialization and resource depletion. By endorsing CFM and SPD, manufacturers across the globe can mitigate their environmental footprint, enhance their economic viability, and contribute to a more sustainable future.

Moreover, policymakers can devise and enact policies that encourage the implementation of CFM and SPD across various sectors, particularly in areas confronted with substantial environmental difficulties, such as providing tax incentives or financial subsidies to enterprises that commit to sustainable methodologies. Enterprises may incorporate CFM and SPD into their operational frameworks to mitigate their ecological impact and enhance their economic viability while engaging in partnerships with suppliers and stakeholders to foster sustainable practices throughout the supply chain. Furthermore, scholars may undertake additional research to investigate the applicability of CFM and SPD in various industries and geographical contexts and examine the influence of policymakers and stakeholders in promoting sustainable practices.

Furthermore, implementing CFM enhances EP, supporting broader ecological and public health issues and environmental goals. Moreover, emphasizing SPD reduces environmental impact by incorporating sustainable ideas into life cycle management and product design, particularly in reducing CO2 emissions. Lastly, following environmental regulations strengthens CFM’s beneficial effects on EP, highlighting the significance of legal compliance in successfully advancing sustainability programs within the larger regulatory framework.

Limitation and future research

The study offers valuable insights, but it also has several limitations. First and foremost, the research is focused exclusively on the companies operating in the manufacturing sector in China, which may restrict the generalizability of the findings to other industries or regions. Further, reliance on self-reported survey data can lead to response bias, where the respondents might give socially desirable responses. This limitation is particularly pertinent, as respondents may overreport their environmental practices or underreport their environmental problems. Additionally, as the participants are recruited through referrals, selection bias can occur, thus overrepresenting some subgroups. Thus, probabilistic sampling methods must be employed in future studies for greater representativeness. Moreover, this cross-sectional design also weakens the possibility of establishing causation. The data collected simultaneously may not accurately capture the dynamic relationships between the variables. Therefore, further study in this line could apply longitudinal approaches to test the dynamic relationships over time.

Most respondents belong to the manufacturing sector, so they could miss out on the bulk of views from other relevant stakeholders like policymakers, consumers, or environmental experts. This can limit gaining an all-inclusive understanding of the broader implications that may involve potential conflicts of interest. Also, the type of industry is not elaborated against the backdrop of the manufacturing sector, while there can be different industries with different environmental practices and problems. Given these limitations, future research should offer better populations, samples more representative of stakeholders, and longitudinal designs that give greater generalizability and robustness to the findings.

Conclusion

The present study identified the critical role that CFM plays in influencing SPD and EP performance within China’s manufacturing industry. SPD mediates the relationship between CFM and EP, while CFM significantly influences both SPD and EP. Moreover, the CFM–EP relationship is moderated by regulatory compliance, hence its importance in fully realizing the salutary effects of CFM on EP. These results possess substantial practical ramifications for various stakeholders. For example, manufacturers may allocate resources toward adopting green technologies and sustainable methodologies to enhance their environmental efficacy and mitigate CO2 emissions. Policymakers can intensify regulatory frameworks and enforcement strategies to promote adherence and advance sustainability within the manufacturing domain. Furthermore, corporations can embed corporate social responsibility initiatives into their operational frameworks to foster environmental stewardship and facilitate a transition towards a more sustainable future.