SSCM · Reducing supply chain impacts: The role institutions such as country, region, industry and ISO standards in the efficacy of environmental investments

Reducing supply chain impacts: The role institutions such as country, region, industry and ISO standards in the efficacy of environmental investments

This research used a data-base with detailed information on the actual environmental investments and supply chain management practices of approximately 1300 firms located in 22 countries to explore a series of research questions related to the efficacy of supply chain environmental investments. The first research question that the project addressed was: Do investment to reduce supply chain environmental impacts vary by region and country? The results show that the investments organisations make to reduce their supply chain environmental impacts do vary by country, even countries within a region. Specifically, within Europe companies located in some countries such as Germany and Poland invest significantly less than their counterparts in countries such as Italy and Croatia. These results are detailed in the working paper entitled 'Institutional effects and the decision to make environmental investments', which is under second revision to the International Journal of Production Research. The project also explored the role of other institutions in the managerial decision to make environmental investments. The results show that ISO 14000 leads to increased environmental investment for all organisations. This is contrary to some literature which predicted that organisations in North America would use ISO mainly as a marketing tool, not a means to make meaningful environmental changes. These results are detailed in a working paper entitled 'ISO 14000 certification and investments in sustainable supply chain management practices: Identifying differences in motivation and adoption levels between Western European and North American companies' which is under second revision to the Journal of Cleaner Production. The final institution examined in the project was industry. Results show that industry, especially the pace of change in an industry does predict the level of supply chain environmental investment. Specifically, organisations in dynamic industries have on average lower levels of supply chain environmental investments than organisations in static industries. For full details see Wiengarten, Pagell and Fynes, 2011. The second question the research addressed was: does the efficacy of an environmental investment depend on the setting in which it is adopted? The results show that in general increased supply chain environmental investments lead to increased operational performance regardless of location. These results are detailed in the working paper entitled 'Institutional effects and the decision to make environmental investments'. However, industry does impact the efficacy of these investments. Environmental investments do not significantly improve operational performance in dynamic industries in terms of cost, quality, delivery and flexibility. However, in static industries environmental investments do significantly improve a company's operational performance in terms of cost, quality and flexibility. These results are detailed in Wiengarten, Pagell and Fynes 2011. Finally, the project explicitly set aside time and resources to explore anomalous findings because one downside to survey research of this nature is that anomalous findings are difficult to explain. The critical anomalous finding in the data was the low level of supply chain environmental investments made in Germany, a country often viewed as an environmental leader. A series of case studies of facilities in Germany were done and the data indicates that German managers tend to view environmental issues through the lens of regulation and because most German organisations meet what they view as stringent environmental regulation they see no reason to invest further. These results are detailed in the working paper entitled 'Institutional effects and the decision to make environmental investments'. The key conclusions from the research are that supply chain environmental investments generally enhance operational performance of all organisations regardless of location. The one exception is that these investments do not improve performance for organisations in dynamic industries. However, even in these industries performance does not degrade with increased supply chain environmental investments. There is no economic justification for not reducing the environmental impact of supply chains. The second key conclusion is that managers in some countries, even European Union (EU) countries such as Germany which are often viewed as environmental leaders, are under-investing in this area which is likely harming environmental outcomes and for those in static industries also operational performance. Finally, pushing the adoption of ISO 14000 or other environmental management systems is a way to decrease the environmental impact of a supply chain. Although there are certainly some organisations who adopt environmental management systems mainly as a marketing tool, the results show that in general the adoption of these systems does lead to meaningful environmental investments. The project has also had impacts that go significantly beyond answering the research questions. The project has involved numerous other researchers, especially early stage researchers. Dr Pagell has worked closely with Dr Frank Wiengarten, an early stage researcher starting his second year as a faculty member at the ESADE business school. This collaboration has led to five manuscripts as well as plans for future collaborations between Dr Pagell, Dr Wiengarten and other faculty members at ESADE and the University of Ulster. Dr Pagell also worked with a PhD student and the faculty at the University of Twente in the Netherlands, a collaboration that has resulted in two published manuscripts. In, addition Dr Pagell has been working with Dr Donna Marshal who is a senior lecturer at University College Dublin. This collaboration has led to multiple grant applications. Finally, Dr Pagell is working with multiple PhD students in Europe including Christiana Dowling (University College Dublin) and Annachiara Longoni (Politecnico di Milano). Beyond addressing the research questions it was intended to address the project has then had a much larger impact. In the process of disseminating this and other research, Dr Pagell has built a wide network within Europe and that network is working on multiple projects that build on this one. Early stage researchers are being mentored and it is hoped that in the near term future a follow up project will be funded enabling this critical work to continue.

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