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Considering the vital role of higher education institutions (HEIs) in accomplishing sustainable development goals, this study aims to examine how and when sustainable leadership (SL) influences sustainable performance by examining social innovation (SI) as a mediating mechanism and managerial discretion (MD) as a boundary condition based on upper echelon theory.

This study is cross-sectional in nature. The authors adopted a cluster-sampling approach to collect data from 500 employees of HEIs in Pakistan and China. The response rate for this study was 52.63%. As the proposed model is complex, the authors used structural equation modeling (SEM) to analyze the research hypothesis.

The empirical findings confirm the presence of SI as a competitive partial mediator between SL and sustainable performance. Nevertheless, the findings of this study do not suggest a higher positive effect of SL on SI in the presence of high MD.

The study evaluated the role of SL and SI in fostering sustainable performance from the perspective of employees in HEIs in China and Pakistan. Before the empirical evidence can be generalized, there is a need to conduct similar studies in other parts of Asia and Western countries as well.

This study presents implications for higher education leaders and policymakers at the national level to foster the sustainable performance of their institutions.

The current evidence reveals the effectiveness of SL in achieving the social goals of HEIs through SI. The recommendations presented in this study can have an impact on society, providing it with a sustainable future.

This study is the first of its kind to examine the mediating role of SI on the relationship between SL and sustainable performance. The present study also provides pioneering empirical evidence about the negative effects of MD in the context of HEIs.