Exploring eco-spirituality and sustainability performance: a study of village-owned enterprises in Bali, Indonesia

This study explores the impact of eco-spirituality on sustainability performance and examines whether this influence is mediated by sustainable business model innovation in village-owned enterprises in Bali, a context in which business practices are highly influenced by spiritual values. Using a survey method, we collected data from 179 managers of village-owned enterprises operating across various areas in Bali. To test this hypothesis, we performed data analysis using partial least squares structural equation modeling (PLS-SEM). Our results reveal that eco-spirituality does not directly affect sustainability performance. However, it exerts a positive influence on sustainability performance through sustainable business model innovation, which serves as a crucial mediating mechanism in this relationship. Integrating eco-spirituality into business practices can serve as a source of practical wisdom, fostering sustainable practices aligned with environmental stewardship and social responsibility, while also creating an organizational environment that values spiritual and ecological principles, ultimately enhancing sustainability performance. Furthermore, this study distinguishes between village-owned enterprises operating in state villages and traditional villages, revealing that the strong spiritual foundation of traditional village-owned enterprises reinforces their commitment to sustainability by aligning business strategies with eco-spiritual values.