Using primary data gathered from both virtual semi-structured interviews and a quantitative survey, a triangular approach was used to investigate how firms work with different initiatives regarding sustainability in supply chains - both in terms of environmental and social sustainability. Furthermore, reactions to recently enacted and upcoming supply chain legislation was documented. The quantitative data was mainly used to supplement findings from the qualitative interviews. Selected respondents were featured through mini-cases that highlighted firm sustainability initiatives pertaining to supply chain management.
From the analyzed data, four distinct propositions-each with circumstantial sub-propositions- were developed that highlight four interlinked themes concerning sustainability and supply chain management: leverage, information exchange, visibility, and supplier upgrading. The propositions can be used by business managers as a source of direction while designing, implementing, and managing sustainability initiatives in their respective supply chains in response to increasing due diligence requirements. Furthermore, legislators may review respondent concerns as well as the developed propositions to address externalities stemming from global value chains and update the legislation accordingly.
Numerous government bodies have begun enacting increased due diligence requirements on business supply chains to curb harmful externalities that affect global sustainability initiatives. At the international level, the EU has recently proposed mandatory human rights due diligence (MHRDD) for global value chains, which is a mandated form of corporate social responsibility (CSR). Traditionally, due diligence and CSR have been voluntary tools to appease stakeholders. However, these voluntary approaches have been unsuccessful at curbing unsustainable business practices.
Research combining sustainability and supply chain management has been increasing in recent years, as well as evolving to include themes found outside management research. Furthermore, the research environment has identified tools that explain how to manage global value chains in a sustainable way, but hasn't specifically addressed the changing legal environment, nor how to manage greater due diligence requirements.
Overall, our findings contribute to the growing field of sustainable supply chain management and may easily be tested and expanded upon by future research.
Table of Contents
1. INTRODUCTION
1.1 SUSTAINABILITY IN THE LEGAL ENVIRONMENT
1.2 SUSTAINABILITY AND SUPPLY CHAIN MANAGEMENT
1.3 STUDY SCOPE
2. STUDY CONTEXT
2.1 HISTORY OF SUSTAINABLE DEVELOPMENT AND DUE DILIGENCE
2.1.1 A Brief History of International Sustainable Development
2.1.2 History of Due Diligence
2.2 REGULATORY REVIEW OF DUE DILIGENCE
2.2.1 Voluntary Due Diligence Reporting
2.3 DUE DILIGENCE TRENDS AND UPCOMING LEGISLATION
2.4 DUE DILIGENCE REPORTING AT THE NATIONAL LEVEL IN EU MEMBER STATES
3. LITERATURE REVIEW AND THEORETICAL BASIS
3.1 SOCIO-ECOLOGICAL SYSTEMS
3.1.1 Panarchy Theory and Adaptive Cycles
3.1.2 What is Resilience? The difference between Ecological and Socio-Ecological Systems
3.2 ADAPTIVE AND TRANSFORMATIVE GOVERNANCE OF SYSTEMS
3.3 THE INDUSTRY STRUCTURE VIEW, RESOURCE-BASED VIEW, AND RELATIONAL VIEW OF THE FIRM
3.4 AN ANALYSIS OF SUSTAINABILITY AND ITS EFFECT ON FIRM PERFORMANCE
3.4.1 Sustainability in the Research Environment
3.4.2 Effects of Sustainability on firm performance
3.5. SUSTAINABILITY REPORTING
3.5.1 CSR Reporting and Due Diligence
3.5.2 Greenwashing
3.6 SUSTAINABLE PROCUREMENT
4. PROBLEM ANALYSIS
5. RESEARCH METHODOLOGY
5.1 METHODOLOGICAL APPROACH
5.1.1 Primary data collection
5.1.2 Triangular approach
5.1.3 Qualitative Semi-structured Interviews
5.1.4 Quantitative Survey
5.1.5 Ethical issues in research – anonymity and privacy
5.2 METHODS OF DATA COLLECTION AND TARGET GROUP
5.3 METHODS OF ANALYSIS
5.3.1 Qualitative: Thematic analysis
5.3.2 Quantitative: Descriptive statistics
5.3.3 Content and keyword analysis
5.3.4 Case selection
5.3.5 Designing propositions
6. RESULTS
6.1 COMMON INTERVIEW THEMES
6.1.1 Global Concerns: Margins, Logistics, and Asia
6.1.2 Supplier Relationships: Upgrading, Visibility, and Leverage
6.1.3 Information Exchange
6.1.4 A message to the Legal Environment
6.2 SURVEY RESULTS
6.3. MINI-CASES
7. DISCUSSION
7.1 SCM AND SUSTAINABILITY PATTERNS (RESEARCH PROPOSITIONS)
7.1.1 Leverage
7.1.2 Information Exchange
7.1.3 Visibility
7.1.4 Supplier Relationships and Upgrading
7.1.5 Summary of Propositions and Findings
7.2 SUSTAINABLE SCM WITH AN EYE TOWARDS THE FUTURE
7.2.1 A message to the legal environment
7.2.2 Sustainable procurement and supply chain management: application and benefits
8. CONCLUSION AND RECOMMENDATIONS FOR FUTURE RESEARCH IN THE FIELD
Research Objectives and Themes
The research investigates how firms manage sustainability initiatives within their supply chains amidst evolving EU due diligence regulations, aiming to develop propositions that guide managers in implementing these requirements effectively.
- The impact of shifting legal requirements (EU MHRDD) on supply chain operations.
- Core interlinked themes: leverage, information exchange, visibility, and supplier upgrading.
- Challenges associated with monitoring lower-tiered suppliers and managing audit-fatigue.
- The integration of sustainability into procurement strategies and its correlation with firm performance.
Excerpt from the Book
1.2 Sustainability and Supply Chain Management
Stemming from strategic sourcing, supply chain management has evolved over the years to incorporate a variety of different business activities—e.g., operations, sales, logistics (Mentzer et al., 2001). Over time, most research solely focuses on creating ‘lean operations’, with the goal of reducing the cost of labor, resources, and time. Unfortunately, global supply chains have solely focused on efficiency over redundancies and have, therefore, become increasingly cost-efficient and vulnerable to negative externalities (Wieland & Durach, 2021). Furthermore, research has shown that fragility increases when systems grow (Taleb, 2012). Therefore, pressures from globalization have only increased pressures for supply chain efficiencies—resulting in increasing vulnerabilities.
As a result of current global catastrophes and supply chain shortages, both the research environment and business environment have transitioned to systems thinking for managing global supply chains. Traditional research identified that firms do not operate in an individual setting, but rather in a network of global value chains (GVCs) (Forrester, 1958). However, newer research has focused on the connections between domains and identified that firms affect and influence their external environment(s) (Wieland, 2021). For example, the label sustainable supply chain management has been growing in research journals in recent years (Taticchi et al., 2015). As defined by the International Journal of Production Research (IJPR), sustainable supply chain management is the “interaction among organizations in a supply chain that yield environmental or social benefits holistically to the entire supply chain” (Taylor & Vachon, 2018). This definition includes both the sustainable impact of an individual firm as well as an entire chain. Furthermore, global supply chains are often linked to political, economic and environmental events that occur locally and disrupt interconnected and dynamic cycles—i.e. supply chain systems (Wieland, 2021).
Summary of Chapters
1. INTRODUCTION: Outlines the growth of global supply chains and the rise of negative externalities, establishing the need for mandatory due diligence and systems thinking.
2. STUDY CONTEXT: Reviews the history of sustainable development and due diligence, analyzing the regulatory landscape within the EU and individual member states.
3. LITERATURE REVIEW AND THEORETICAL BASIS: Examines theories on socio-ecological systems, resilience, strategic management views of the firm, and sustainability's impact on firm performance.
4. PROBLEM ANALYSIS: Defines the research objectives, focusing on how companies adapt their due diligence activities to comply with emerging sustainability legislation.
5. RESEARCH METHODOLOGY: Details the triangular approach using semi-structured interviews and quantitative surveys to investigate firm initiatives in supply chains.
6. RESULTS: Presents field findings, highlighting themes such as global concerns, supplier relationships, information exchange, and feedback for the legal environment.
7. DISCUSSION: Synthesizes research findings into distinct propositions based on leverage, information exchange, visibility, and supplier upgrading to guide business managers.
8. CONCLUSION AND RECOMMENDATIONS FOR FUTURE RESEARCH IN THE FIELD: Provides final reflections and suggests directions for future research, emphasizing the need for larger-scale and cross-industry studies.
Keywords
Due Diligence, Sustainable Supply Chain Management, Corporate Social Responsibility, CSR, MHRDD, Global Value Chains, Supplier Upgrading, Transparency, Greenwashing, Resilience, Socio-Ecological Systems, Stakeholder Management, Regulatory Compliance.
Frequently Asked Questions
What is the core focus of this Master's Thesis?
The research explores the impact of increasing EU-mandated sustainability and due diligence requirements on global supply chains, investigating how firms identify, integrate, and manage these responsibilities.
What are the primary themes discussed in the study?
The study centers onfour interlinked themes: leveraging supplier relationships, effective information exchange, increasing supply chain visibility, and strategic supplier upgrading.
What is the primary goal of the research?
The thesis aims to provide an overview of current and upcoming regulations related to due diligence and to determine how firms can effectively manage the resulting challenges in their value chains.
How was the research data collected and analyzed?
The researchers utilized a triangular methodology, combining quantitative data from 102 survey responses with qualitative insights gathered from 30 semi-structured virtual interviews.
What topics does the main body address?
The main sections cover the history of due diligence, theoretical frameworks like panarchy and relational view, legislative trends, and empirical results regarding how companies are reacting to new sustainability pressures.
Which keywords best describe the paper?
Key terms include Corporate Social Responsibility (CSR), Due Diligence, Supply Chain Management, Greenwashing, Value Chains, and Regulatory Compliance.
How do market dynamics influence a firm's leverage within its supply chain?
The research concludes that market shocks, such as pandemics or logistics crises, can dramatically shift bargaining power, often forcing lead firms to rely on trust and existing partnerships rather than strict contractual enforcement.
Why is "visibility beyond Tier 1" considered a major challenge?
The study highlights that most companies lack transparency regarding their sub-suppliers, making it difficult to audit and manage social or environmental risks that occur deep within the global value chain.
What role do memberships and associations play for firms?
Memberships, associations, and certifications serve as critical tools for SMEs and large companies alike to share information, mitigate knowledge deficiencies, and standardize sustainability metrics across fragmented industries.
- Citation du texte
- Kristian Prior (Auteur), Hans Brunk (Auteur), 2022, Sustainable Initiatives and Due Diligence in the EU Supply Chain, Munich, GRIN Verlag, https://www.grin.com/document/1256114
