The Mediating Effect of Environmental Sustainability Practices in the Relationship between Intellectual Capital and Performance of Iraqi Oil and Gas Companies

Abstract

This study examines the mediating effect of environmental sustainability practices in the relationship between intellectual capital and company performance among Iraqi oil and gas companies. Using a quantitative, cross-sectional design, data were collected from 251 respondents across major firms and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The model integrated five dimensions of intellectual capital human, structural, social, relational, and innovation capital as predictors of both sustainability practices and company performance. The findings revealed that human, social, and innovation capital significantly and positively influenced company performance, while structural and relational capital contributed indirectly through environmental sustainability practices. The results also confirmed that sustainability practices play a crucial mediating role, transforming knowledge-based resources into improved organizational outcomes. Although the direct relationship between sustainability practices and performance was relatively weak, the mediation analysis demonstrated that integrating sustainability initiatives amplifies the effect of intellectual capital on overall performance. The study provides valuable insights into how knowledge-based resources and environmental strategies can jointly enhance competitiveness and sustainable development in the oil and gas sector. It concludes that developing intellectual capital alongside sustainability governance is essential for achieving long-term resilience and efficiency within Iraq’s energy industry.