Examining the environmental performance of first tier suppliers in the oil and gas supply chain industry
Year: 2012
Type: dissertation
Abstract: The increasing interest in environmental sustainability and supply chain performance is\ncreating a pressure on firms to pay more attention to their environmental footprints. This\npressure is felt more in high polluting industries; therefore, these companies tend to pass these\npressures to their suppliers. Thus, environmental performance of supply chains has become\nan extension of the individual firms’ performance and a reflection of their environmental\ncommitment to the natural environment.\nThe objective of this Master Thesis is to examine the environmental performance of upstream\ncompanies in the oil and gas supply chain. Using the Uppsala model and the resource-based\nview (RBV) of the firm as a theoretical foundation, the firm resources and capabilities, its\nenvironmental commitment, and the degree of environmental collaboration are identified as\nthree potential drivers for environmental performance. The interaction between environmental\ncommitment and environmental performance is influenced by the environmental regulations\nthat act as a moderator for compelling environmental behavior, and the need for incentives as\na motivator for self-regulating. The study is exploratory in nature and based on interviews\nand online survey with six companies in the offshore oil and gas industry. The aim is to\nexamine the path process between the variables and their implication on environmental\nperformance.\nThe findings reveal that a proactive environmental commitment has a direct influence on\nsetting goals and priorities manifested in the firm’s actions. Green purchasing activities, to\ninclude selecting, evaluating, and monitoring suppliers are central in communicating an\nenvironmental commitment and conducing a better environmental behavior in the supply\nchain. The findings also show that commitment acts as a driving mechanism for\nenvironmental collaboration and investment decisions to develop appropriate environmental\nresources and capabilities. The valuable resources and capabilities of the firm are found to\nhave specific advantage in capturing opportunities, creating sustainable products, and\nresponding to customers’ environmental requirements. Environmental collaboration is found\nto be task specific and emphasizes more collaboration with customers than with the supplier.\nIn addition, it is regarded as inhabited with relational risks, therefore, it is only exercised to\nthe extent it does not compromise competitiveness.\niii\nThe findings also show that environmental regulations are perceived complicated and lacking\nguidance in the design and use of environmental indicators. They are also seen as open for\nbroad interpretation and inefficient in resolving issues of environmental responsibilities. The\ndifference in the interpretation and application of environmental standards across countries\nchallenges the competitiveness of companies when competing in more relaxed regions. In\naddition, the findings show that environmental commitment is focused on the business areas\nand on locations that are subject to stronger control. Therefore, the findings imply that\nregulations would yield better results if they are applied with tighter control.\nThe introduction of an incentive approach is seen as a positive motivator to reinforce\nenvironmental commitment. Incentives help companies preserve their competitiveness in the\ninternational market without compromising their sustainable performance. Supplier’s\nincentives are useful in fostering a deeper commitment to a proactive environmental\nperformance. However, the findings reveal that companies are not interested in committing\nefforts to the suppliers’ development programs. Based on these findings, the study discusses\nsome implications regarding green purchasing decisions and activities; in addition to\nimplication concerning environmental regulations and controls. The study also highlights\nlimitations encountered and postulate recommendation for future research.
Author: Jocelyne Tynon
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2503555083