The role of green supply chain management practices on environmental performance: A case of Indonesian small and medium enterprises

Abstract

This article investigates the role of green supply chain management practices on environmental performance in Indonesian small and medium enterprises (SMEs). A quantitative method is used to examine a particular population or sample, and research instruments with partial least squares - structural equation modeling (PLS-SEM) are applied in this study. The respondents of this study are 89 Indonesian small and medium business managers and owners. The results indicate that internal factors such as strategic orientation and internal environment management are not driving SMEs to consider green supply chain management. Meanwhile, external factor as government regulation plays a significant role in adopting green supply chain management. Moreover, it reveals that adopting green supply chain management would affect SME’s environmental performance. The findings also prove that internal factors did not affect environmental performance through green supply chain management. On the other hand, green supply chain management adoption could mediate government regulation on improving SMEs’ environmental performance.