Social and environmental risk management in supply chains: a survey in the clothing industry

Matthias Freise,Stefan Seuring

doi:10.1007/s12159-015-0121-8

Matthias Freise, Stefan Seuring

Open Access

https://doi.org/10.1007/s12159-015-0121-8

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Journal: Logistics Research	Publication Date: May 21, 2015
Citations: 113	License type: CC BY 4.0

Affiliation: Reutlingen University, University of Kassel

Abstract

Almost daily, news indicates that there are environmental and social problems in globally fragmented supply chains. Even though conceptualisations of sustainable supply chain management suggest supplier-related risk management for sustainable products and processes as substantial for companies, research on how risk management for environmental and social issues in supply chains is performed has so far been neglected. This study aims at analysing both why companies in the clothing industry are performing management of social and environmental risks in their supply chain and what kind of action they are taking. Based on the literature on sustainable supply chain management and supply chain risk management as well as 10 expert interviews, a conceptual model for risk management in sustainable supply chains was developed. This model was tested in an empirical study in the clothing industry. The data were analysed by structural equation modelling. Results of the research show high statistical significance for the respective conceptual model. The main driver to perform risk management in environmental and social affairs is pressures and incentives from stakeholders. While companies’ corporate orientation mainly drives social actions, top management drives environmental affairs for differentiating themselves from competitors.

Highlights

Companies are more than ever exposed to a diverse set of risks in operating their supply chains [1,2,3]
Other than pure economic-driven risk management, which is intended to secure companies’ financial targets, environmental and social aspects reflect the extension of relevant stakeholders in sustainable supply chain management as summarised [6]
Legal requirements are only weak drivers for social and environmental risk management activities (H2a and H2b confirmed with low path coefficients)

Summary

Introduction

Companies are more than ever exposed to a diverse set of risks in operating their supply chains [1,2,3]. Understanding how to perform risk management within the supply chain is important and has high priority [4]. Companies’ risk is usually considered in a purely economic mode, as the risk of potential asset value losses. Considering sustainability management, an extension of a company’s targets and responsibilities is implied [5]. Social and environmental risks need to be included into the risk assessment besides economical risks. Related arguments are frequently made on a conceptual level in respective sustainable supply chain management literature [6]

Objectives

Results

Discussion

Conclusion