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Common Good HRM (CG-HRM) represents a new understanding of the HR role and processes. It emphasizes the ethical considerations and the contribution of HR in addressing societal grand challenges such as climate change, corruption, migration, poverty, and youth unemployment. Key aspects of CG-HRM include fostering equal and fair employment relationships, ensuring democratic participation of all business stakeholders to achieve locally adapted HR solutions, and protecting human needs for employment, which encompasses security, safety, and meaningful work.

Although previous studies have sought to expand our understanding of CG-HRM, we still lack a comprehensive understanding of its performance outcomes. For instance, it remains unclear how a firm's level of CG-HRM influences innovation. While some researchers have examined the effects of HRM practices and processes on various performance metrics, CG-HRM as a new concept has been less studied. This study explores the effects of CG-HRM on sustainability-oriented innovation (SOI). SOI refers to planned organizational changes in products, processes, or practices in response to the call for an active role of organizations in addressing environmental and societal challenges while creating and realizing social and environmental value alongside economic returns.

In this study, CG-HRM is operationalized through a company's effectiveness in several key areas: providing job satisfaction, maintaining a healthy and safe workplace, ensuring diversity and equal opportunities, and offering development opportunities for its employees (workforce dimension); the company's commitment to being a good corporate citizen, protecting public health, and adhering to business ethics (community dimension); and the company's effectiveness in respecting fundamental human rights conventions (human rights dimension).

Two types of sustainability-oriented innovation (SOI) are also operationalized: environmental innovation, which involves reducing environmental costs and burdens through new environmental technologies and processes or eco-designed products, and product responsibility innovation, which encompasses a company's capacity to produce quality goods and services while integrating considerations for customer health and safety, integrity, and data privacy.

Data from 288 Swedish businesses in 2023 are used to quantitatively explore the effects of CG-HRM on SOI. The data is obtained using measures from the ESG Score from LSEG and Refinitiv ESG Data in the Eikon database. The ESG score provides an objective measure of a company's relative environmental, societal, and governance performance, commitment, and effectiveness.