The role of customer awareness in promoting firm sustainability and sustainable supply chain management

Abstract

In light of the growing complexity of globally dispersed, multi-tier supply chains; sustainable supply chain management (SSCM) has become instrumental in the quest for achieving sustainability compliance along the supply chain. This study investigates how sustainability capability develops within a firm, and then extends to SSCM. Using a fixed-effect model and a global dataset of 2206 firms between 2002 and 2015, this study shows that a firm's information environment, proxied by their customers awareness, has a significantly positive effect on their sustainability performance, and on their implementation of SSCM. Our analysis suggests that the influence of a firm's information environment on a firm's SSCM performance is mediated by the firm's own sustainability capability. We also find that this relationship is affected by stakeholder engagement. This research is relevant because, by investigating the factors that influence the development of SSCM, it provides guidance for firms that wish to achieve sustainability improvements in their supply chains during an era when the natural environment, social responsibility and the related strategic opportunities have increased in importance.