Emerging Market Penetration and Emissions Performance

As suppliers' emissions contribute to a significant portion of the global environmental footprint, achieving supply chain wide carbon neutrality largely depends on suppliers' greenhouse gas (GHG) emissions reductions. Although suppliers' customers are increasingly signaling their commitment to tackling climate change through environmental disclosure, whether this signal contributes to supplier emissions reduction remains a question. Using signaling theory, this research proposes an emissions‐reducing effect of customer base environmental disclosure on a supplier's GHG emissions level. Using a 2010–2017 panel dataset from multiple sources, we find empirical evidence supporting the upstream emissions‐reducing effect of customer base environmental disclosure. Further, we identify two customer‐base characteristics that affect this relationship: customer base climate innovation and competition. These findings contribute to the sustainable supply chain management literature by illustrating the effects of the customer base on supplier emissions performance. Specifically, customers could motivate a supplier's engagement in emissions reduction by collectively signaling their environmental commitment through enhanced disclosure. However, the effectiveness of this signaling effect can be contingent on the green innovation and competitive dynamics of the customer base.

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“…Second, we follow Wani et al (2021) and use customer base environmental disclosure in year

t

as the dependent variable and the difference between supplier GHG emissions in year

t

and year

t - 1

(

∆ {italicemissions}^{S}

) as the independent variable. We include the moderators and controls used in the main analysis in year

t

and we estimate the same fixed‐effects model with standard errors clustered at the supplier level.…”

Section: Models and Resultsmentioning

confidence: 99%

Customer base environmental disclosure and supplier greenhouse gas emissions: A signaling theory perspective

Song

Lian

Skowronski

et al. 2023

J of Ops Management

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“…Our dependent variable in this research is a supplier's total internal GHG emissions intensity

( {TEI_{ijt}^S} )

. Total internal GHG emissions are defined as the combination of Scope 1 and 2 emissions, the terms used in previous research focusing on firm‐level emissions (e.g., Blanco, 2021; Wani et al., 2021). Scope 1 emissions (e.g., fossil fuels used in the reporting company's daily operations) are from sources owned or controlled by the reporting company.…”

Section: Empirical Setting and Datamentioning

confidence: 99%

“…We develop our sample from Bloomberg ESG because it provides more detailed firm-level sustainability indicators assembled from information publicly available to researchers, industries, and investors following the criteria of the Sustainability Accounting Standards Board (SASB; Park & Ravenel, 2013). Bloomberg ESG data have been used to study environmental issues in finance, accounting, and OM (e.g., Bellamy et al, 2020;Grewal et al, 2018;Gualandris et al, 2021;Halbritter & Dorfleitner, 2015;Wani et al, 2021) We also collect firm-level information on firm-supplier relationships from the Bloomberg SPLC database. Compared with other similar public data, SPLC provides the largest number of supplier links per firm (Serpa & Krishnan, 2018).…”

Section: Data Source and Samplementioning

confidence: 99%

Supply chain leakage of greenhouse gas emissions and supplier innovation

Song

Dong

Kull

et al. 2023

Production and Operations Management

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Climate change is a major global risk and a key driver for greenhouse gas emissions reduction. Yet, firms’ internal emissions reduction may create a leakage leading to higher emissions in the supply chain. The related literature suggests that the pollution‐haven hypothesis explains such emissions leakage. In contrast, we explore an alternative reason for supply chain leakage, which is related to optimization of supply chain activities and supply chain innovation. Based on panel data from Bloomberg Environmental, Social, and Governance and Bloomberg Supply Chain, we estimate our models at a dyadic (i.e., firm and supplier) level using two‐way cluster‐robust standard error, treating various sources of endogeneity. We find empirical evidence of a supply chain leakage effect—a higher level of a supplier's emissions is associated with a lower level of a firm's internal emissions. More importantly, the supplier's innovation can be a major reason behind the leakage; the supply chain leakage effect is stronger when a supplier is more innovative. Furthermore, the role of innovation is strengthened when a supplier invests in eco‐innovation and has technological capabilities similar to those of the focal firm. Our findings suggest that supply chain leakage may not be completely driven by the pollution‐haven effect, but instead is associated with supply chain optimization and innovation that may be beneficial in the long run.

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“…Sustainability is decisive for organizations' advancement [77][78][79] by connecting with their environment and being influenced by it. The environmental aspect of corporate sustainability is essential in organizational effectiveness and viability: companies give prominence to resource conservation approaches so as to stabilize their financial position.…”

Section: Environmental Management Systemsmentioning

confidence: 99%

Sustainability Management and Performance in the Urban Corporate Economy: A Systematic Literature Review

et al. 2020

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In this article, we cumulate previous research findings indicating that organizations advance to superior phases of environmental management development in order to attain corporate sustainability by the use of participative decision-making. We contribute to the literature on corporate sustainability management and performance by showing that the correlation between sustainable development governance, organizational knowledge, sustainable organizational development, and corporate sustainability, which shapes corporate environmental and sustainability management. Throughout June 2020, we conducted a quantitative literature review of ProQuest, Scopus, and the Web of Science databases, with search terms including “corporate sustainability”, “corporate sustainability management”, “corporate sustainability performance”, “sustainability reporting”, “sustainable supply chain management”, “sustainable corporate development”, and “environmental management systems”. As we inspected research published exclusively in the past two years, only 338 articles met the eligibility criteria. By eliminating the findings that were questionable, unsubstantiated by replication, or too general, and due to space limitations, we selected 93, mainly empirical, sources. Future research should investigate whether corporate governance systems, through organizational sustainability practices and performance reporting, can shape operational environmental sustainability and sustainable organizational culture.

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Emerging Market Penetration and Emissions Performance

Cited by 6 publications

References 113 publications

Customer base environmental disclosure and supplier greenhouse gas emissions: A signaling theory perspective

Customer base environmental disclosure and supplier greenhouse gas emissions: A signaling theory perspective

Supply chain leakage of greenhouse gas emissions and supplier innovation

Sustainability Management and Performance in the Urban Corporate Economy: A Systematic Literature Review

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