- Centre for Operations and Supply Chain Research
Nowadays, many multinational companies have declared ambitious sustainability goals and reported their efforts in Corporate Social Responsibility (CSR) and sustainability reports. However, through part of my PhD research project - “Unravelling employee engagement towards environmentally sustainable supply chains” - I have found that some multinational companies have not done enough of what they preach in developing countries such as India.
My project aims to investigate when and how employees take pro-environmental actions within various supply chain functions. In this blog post I detail findings based on interviews with eight supply chain managers, from top and middle management, of seven large manufacturing organisations in India from different sectors including: automotive, electronic goods, power, steel and white-goods.
India has received a “medium” rating on the global climate action tracker scale, which indicates that India’s climate plans are at the least ambitious end of what would be a fair contribution. Global supply chains play a central role in contributing to climate change because their activities account for a bulk of the global resources consumed and increases pollution levels. For example, a report from leading Chinese environment groups revealed how Apple's suppliers had been involved in breaches of environmental regulations. The report noted waste discharge violations at several Chinese firms that were thought to be part of Apple's supply chain.
Supply chain managers have opportunities to make operational decisions with the intent of improving environmental performance, yet many organisations fail to engage them. From my research, I have listed seven ways for organisations to more effectively engage supply chain mangers to achieve environmental sustainability, especially in developing countries.
1. Create awareness
In India environmental disclosures in the corporate annual reports is not at an encouraging level. This was apparent as most organisations we studied paid very little attention to environmental accounting as it is still a voluntary practice. Even though there are policy formulations and legislations for environmental protection at global level there aren’t strict measures at organisational level.
As far as these organisations are concerned, it is just the environmental department that needs to implement any environmental measures. We found that there were not as many environmental initiatives at the supply chain level among most of these organisations.
Even though organisation actions towards sustainability were targeted towards employees from various departments, there were not any significant differences in terms of engagement in environmental sustainability from employees involved in supply chain.
It is high time environmental departments realise that engaging employees in environmental management is beyond turning off lights and planting trees especially in the context of supply chain employees. They have unlimited opportunities to prevent negative externalities encompassing the entire product life-cycle. Right from product design stage to production to distribution of the finished product and beyond end-of-life management in the form of reverse logistics (ie operations related to the reuse of products and materials.)
Creating awareness about the environmental impacts of the supply chain along with imparting the technical know-how to improve the processes to curtail environmental damage is paramount in Indian companies.
2. Change mind-set
It is well proven that pro-environmental behaviours can be driven by attitudes. Thus, an employee’s personal predisposition toward protecting the natural environment is strongly linked to their motivation to engage in environmental behaviours. However, there is a misconception among supply chain employees that environmental management is not a part of supply chain, rather it is the job of human resource or environmental departments to take any initiatives in this regard. Moreover, research shows that supply chain employees tend to possess a rational mind-set that is often driven by monetary incentives. Some believe that integrating sustainability into supply chain processes is expensive and requires a large amount of money.
Above all, they don’t see the immediate benefits of integrating sustainability into supply chain activities. For them, besides maximising profits, the main goal is to increase effectiveness and efficiency of their supply chain.
All these attitudes and beliefs among the supply chain employees act as a barrier for them to act in a pro-environmental way and implement green strategies. This is apparently a deep-rooted phenomenon which needs to change as engagement in pro-environmental behaviours have both short-term and long-term benefits alongside tangible and intangible outcomes. This calls for a need to have an open mind-set to be receptive towards new ideologies that would bring the successful implementation of sustainability into existing supply chains.
Another revelation from the interviews we conducted was that there was a lack of support for supply chain employees to engage in environmental management. For some of these organisations environmental sustainability is not the number one priority for supply chain management; they tend to believe that having an environmental management certification is enough on their part to fulfil the norm.
Similarly, supply chain employees perceive engaging in environmental activities as a matter of time, money and great effort. Further, they don’t feel motivated to engage in pro-environmental behaviours as environmental criteria is not a part of performance evaluation.
However, if it’s not a priority for the company it will never be for the employees unless they are self-motivated. Moreover, senior managers in many organisations lack the framework and practical tools (such as performance evaluation systems, incentives and rewards etc) that can help them set priorities and make decisions that are both financially and environmentally sound.
Even though organisational support has been linked to pro-environmental behaviours of employees in numerous studies before, the mechanism to establish this link has been missing in so many organisations. Thus, supply chain employees fail to realise their potential and lack the motivation to improve the supply chain’s environmental performance. They still believe it is anything but their “job” to take environmental initiatives. Therefore, there is a huge need for organisations to prioritise environmental consideration instead of assuming it’s someone else’s responsibility.
4. Affective (besides effective) communication strategy
In addition to the prioritisation, organisations need to ensure that their communications are emotionally relevant to employees in order to bring about any behavioural change. Some organisations fail to communicate their commitment towards environmental sustainability to their employees.
Whether it’s the organisations that fail to gain the support of supply chain employees in its sustainability initiatives or if it’s the supply chain employees who don’t feel supported from the organisation, there exists a communication gap. Therefore, there is a need to form an appropriate communication strategy that would assist them to work together towards the common goal of sustainability.
It is also the responsibility of the top management to make employees feel empowered and make it evident through their communications why supply chain employees are crucial in safeguarding the environment and the community in order to gain their enduring commitment towards sustainability.
The power of employees’ emotional attachment and identification with the organisation seem to strengthen by the affective cues they receive from the organisation. In other words, a communication strategy is vital but is only effective when an organisation uses messaging that has an emotional response.
5. Communicate benefits both at individual and organisation level
Supply chain managers don’t want the additional burden of engaging in environmental management unless they see the value in it for them and the organisation. The dedicated environmental department of respective companies firstly needs to identify the potential of supply chain functions in achieving the environmental objectives of the organisation and secondly compensate the supply chain managers adequately to boost their engagement.
We encountered in our research that as the business case for integrating sustainability into supply chain operations gets stronger, more supply chain employees will follow the lead of the farsighted champions. Rather than looking at sustainability as a capital-intensive activity, environmental advocates need to convey the profit outcomes of becoming an environmentally sustainable supply chain which is the basic idea behind adopting an appropriate communication strategy.
The last thing supply chain managers want is to incur additional expense on investing in green technology through which they can’t reap immediate returns. At a supply chain level the change leaders cum champions need to focus on setting a positive tone while seeking engagement in green strategy from the follower employees and implementing it.
At an individual level, even a small action such as having an environmental parameter in the performance evaluation criteria, can have a huge impact on gaining engagement.
6. Synergy between Green Human Resource Management (GHRM) and Green Supply Chain Management (GSCM)
The environmental management literature constantly argues that organisational actions are required to go beyond end-of-pipe technologies (techniques that are used to remove already formed contaminants in water or air streams) and adopt new environmentally responsible values, beliefs and behaviours in order to become sustainable.
Employees find GHRM noteworthy in generating sustainability awareness and sustainability adoption in the supply chain. Still, in many organisations, some supply chain employees don’t feel the need to express concerns related to the environment because there are dedicated departments to think about it. However, there is a need for employees to switch from working separately to working together as a team. Therefore, GHRM need to create a platform for GSCM employees to raise environmental concerns they face and also offer solutions to them. Organisations need to catalyse such discussions and channel them into outcomes using appropriate GHRM strategies such as organising sustainability briefings and brainstorming sessions at regular intervals.
7. Evolve the employee engagement strategy
Last but not least, the organisation must work towards continuously evolving the strategy to drive sustainability among supply chain employees and ensure compliance in the various functional areas that the supply chain is seeking sustainability. It is easy to lose engagement in this fast changing environment therefore there is a need to continuously develop an effective strategy to drive behavioural engagement.
The supply chain managers I interviewed realise the importance of the natural environment and are aware of how various business operations are adversely affecting it. They are willing to engage in the sustainability initiatives as long as there is a concordance between what the organisation asks them to do and what they feel motivated to do. However, in a complex supply chain environment the decision making is influenced by several conflicting factors. Further research into what motivates supply chain employees to engage in environmental sustainability could facilitate the organisations to devise an effective strategy enabling them to create and participate in more sustainable supply chains.
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The views expressed in this article are those of the author and may not reflect the views of Leeds University Business School or the University of Leeds.