Abstract
Within the context of Green Supply Chain Management (GSCM), firms are currently considering green supply chain practices as a concern not only for environment performance but also financial performance. Therefore this study aims to investigate the impact of GSCM practices on financial performance relating to manufacturing companies in Sri Lanka. For this purpose structured questionnaire was used to collect data from 25 manufacturing companies listed on Colombo Stock Exchange, Sri Lanka. Data were analyzed using Partial Least Square Structural Equation Modeling method. Green supply chain practices were categorized in to four basic practices as internal environmental management, green purchasing, customer cooperation with environmental considerations and eco design, and investment recovery. Financial performance was measured by using Return on Equity. The results showed that green purchasing and investment recovery significantly influence on financial performance and the other two green supply management practices do not significantly affect financial performance.
Highlights
The need for environmental research in the business world has been growingly addressed by the researchers in different context including developed and developing countries
Though there is an argument that Green Supply Chain Management (GSCM) performance cannot just be based on its financial aspect, this paper investigates the relationship between Green Supply Chain Practices (GSCP) and financial performance while controlling performance of operational and environmental aspects to find out whether there is an impact of GSCP on financial performance
Each green supply chain practice; internal environmental management (IEM), GP, CC & RR was regressed against Return on Equity
Summary
The need for environmental research in the business world has been growingly addressed by the researchers in different context including developed and developing countries. Within the domain of environmental research, the concepts of Green Supply Chain Management (GSCM), and Green Supply Chain Practices (GSCP) are taken greater attention for researching as one of the newest areas in supply chain evolution. Environmental performance is one of the determinants for environmental sustainability and Economic performance is one of the determinants for firm’s sustainability. Balancing between economic performance & environmental performance has become increasingly important for organizations for facing competitive, regulatory, and community pressures (Shultz & Holbrook, 1999). With these increasing pressures, firms have to adopt certain strategies, practices and processes to face competition. Performance may have an influence for the management whether to take some actions or adopt certain practices
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