Adoption of symbolic versus substantive sustainability practices by lower-tier suppliers: a behavioural view

Abstract

Buying firms adopt various governance mechanisms to ensure sustainability compliance among upstream suppliers. While, certification is the most popular governance mechanism used worldwide, mounting evidence indicates that there is an incongruity in sustainability efforts between what is declared by supplier firms and their actual practices. Our empirical analysis of sustainable cocoa suppliers in Kerala (a state in South India) indicate that behavioural characteristics of suppliers, specifically their attitude towards risk and ambiguity can be used to assess suppliers’ tendency to adopt symbolic versus substantive sustainability postures. Risk aversion and ambiguity aversion were found to predict the sustainability posture of substantive (over symbolic) sustainability practices. Also, firm size and collaboration intensity played a significant role in supplier sustainability behaviour. The findings have important implications for academic research on sustainability, and policy implications for agencies charged with compliance with sustainability standards and guidelines. Finally, our study is beneficial for practicing managers who find it difficult to monitor sustainability compliance with respect to their supply base.