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Sustainable Supply Chain Activities © 2019 MDI
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DOI: 10.1177/0972262919863189

An Indian Experience journals.sagepub.com/home/vis

Bikram Jit Singh Mann1

Harmeet Kaur1

Abstract
The purpose of the article is to study the impact of sustainable supply chain management (SSCM) on the financial performance of the
firms in India. The empirical analysis used data from the top 100 listed companies by market capitalization on BSE. Content analysis
is conducted to analyse the principle ‘life cycle sustainability of goods and services’. Hierarchical linear regression is used to test the
hypotheses. The results reveal that sustainable sourcing and resource utilization are the two SSCM activities that have a significant
positive impact on the financial performance of the firm. The article offers insights for focusing on the activities that increase the
shareholder value. It is the initial study that has focused on the sustainable supply chain activities at the micro level as mandated by the
regulators of sustainability reporting and studies the impact of such activities on the financial performance of the Indian firms.

Key Words
Sustainable Supply Chain Management, Business Responsibility Reporting, Sustainable Indian Companies, Financial Performance,
Sustainability

Introduction
It is a well-established fact that the adage ‘sustainable
development’ has been popularized by ‘Brundtland Report’
published in 1987 by World Commission on Environment
and Development. This report states that the sustainable
development means to meet the present requirements
without harming the abilities to meet the needs of the
coming generations. In the case of a firm, meeting the
present requirements means meeting the needs of the firm’s
stakeholders, namely shareholders, customers, investors,
suppliers, authorities, groups, communities and so on.
Focusing only on the shareholder’s economic goals, which
subsequently deteriorates the environment and affects the
societal welfare, however, will not lead to the achievement
of sustainability. Therefore, the need arises to balance all
the three pillars, that is, the economic goals of the firm, the
societal goals and the environment, which is also known as
the triple bottom line (TBL or 3BL) approach (Colbert &
Kurucz, 2007; Colman, 2004; Elkington, 1994; Garriga &
Mele, 2004; Hedberg & Malmborg, 2003; Joyce & Paquin,
2016; Kolk, 2004; Rajeev, Pati, Padhi, & Govindan, 2017).
Further, Spreckley (1981) clarifies that the TBL accounting
broadens the conventional reporting framework by taking
into account social and environmental performance in
addition to the financial performance of the company.
The supply chain of a firm is an area of activity where
major imbalances occur among the three indicators, that
is, economic, social and environment. To study these
imbalances, researchers have used the life cycle analysis.
Life cycle analysis is a technique to measure the envi-
ronmental impact related to all the stages a product passes
through, right from raw material procurement to disposal
and recycling of the product. It is also known as cradle-
to-grave analysis. If a firm is to manage its business
sustainability, the supply chain activities involved in
sourcing, procurement, conversion and logistics activi-
ties are to be managed in such a way that a balance is
maintained among the economic, social and environmen-
tal indicators.

1 Guru Nanak Dev University, Amritsar, Punjab, India.

Corresponding author:
Harmeet Kaur, Guru Nanak Dev University, Grand Trunk Road, Off NH 1, Amritsar, Punjab 143005, India.
E-mail: harmeet027@gmail.com
2
Based on the previous literature, at the macro level, the
supply chain has been divided into three major sets of
activities, that is, upstream activities (Ageron, Gunasekaran,
& Spalanzani, 2012; Golicic & Smith, 2013; Li, Wu,
Holsapple, & Goldsby, 2017; Morali & Searcy, 2013; Su
et al., 2016; Vachon & Klassen, 2006; Wang & Sarkis, 2013;
Wolf, 2011, 2014), downstream activities (Ageron et al.,
2012; Golicic & Smith, 2013; Li et al., 2017; Morali &
Searcy, 2013; Su et al., 2016; Vachon & Kalsen, 2006; Wang
& Sarkis, 2013; Wolf, 2011) and production-related activities
(Golicic & Smith, 2013; Su et al., 2016). Different names
have been given to upstream activities, such as green
procurement (Wolf, 2014), inbound logistics (Carter &
Roger, 2008; Wang & Sarkis, 2013), green purchasing
(Wang & Sarkis, 2013), green supplier development (Wang
& Sarkis, 2013) and transport (Wang & Sarkis, 2013).
Downstream activities are also known as outbound logistics
(Carter & Roger, 2008; Wang & Sarkis, 2013) and green
marketing (Wang & Sarkis, 2013). Production activities are
also known as operations (Ageron et al., 2012; Wolf, 2014),
internal integration (Wolf, 2011), internal operations
(Vachon & Kalsen, 2006), internal business (Bhagwat &
Sharma, 2007) and environment-conscious manufacturing
(Wang & Sarkis, 2013). Deriving from the existing literature,
these supply chain activities have been named as upstream
activities, operations and downstream activities in the
present article.
Abundant research has been conducted on evaluating the
impact of sustainable supply chain management (SSCM) on
the financial performance of the company. Sybertz (2017)
asserts that sustainable supply chain activities have a positive
impact on the three TBL dimensions. Wang and Sarkis
(2013) find that structured SSCM that has both social and
environmental initiatives is associated with increased return
on assets and return on equity. Geng, Mansouri, and Aktas
(2017) find that in the ‘emerging economies’ in Asia, there is
a positive relationship between SSCM and TBL dimensions
in manufacturing firms.
With reference to financial performance vis-à-vis
SSCM, research has been conducted at the macro level.
The existing research has a broader scope but is less
specific. Over a period of time, the regulators of different
countries have mandated the companies to report
sustainability activities in detail. The researchers have
somehow overlooked to evaluate the impact of these
sustainable activities on financial performance, as
mandated by the regulators of sustainability reporting.
They have continued to evaluate the impact of SSCM on
financial performance by dividing the supply chain
activities into upstream, operations and downstream
activities. However, as already stated, the reporting of
these activities has changed. Therefore, there is a need to
further breakdown each of these activities. In the present
article, the impact of SSCM on the financial performance
of the company has been undertaken by further dividing
the upstream operations and downstream activities into
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micro activities so that the impact of these activities can be
studied more comprehensively. The SSCM activities have
been breakdown into various activities at the micro level
on the basis of the proforma of Business Responsibility
Report (BRR) given by Security Exchange Board of India
(SEBI) and the existing literature (Carter & Roger, 2008;
Golicic & Smith, 2013). Esfahbodi, Zhang, and Watson
(2016) have assessed SSCM on the basis of sustainable procure-
ment, sustainable distribution, sustainable production and
reverse logistics. In other words, the supply chain is a com-
bination of upstream, that is, supply-side, downstream, that
is, customer side while the operations are in the centre
(Jonsson, 2008). This will help in evaluating the SSCM
activity/activities contributing more towards the financial
performance of the firm.
Theory Building and Research
Hypothesis
Stakeholder Theory as a Proponent of
Sustainable Development
Stakeholders are the persons or the parties that have a
direct or indirect interest in the organization. There are
various direct and indirect stakeholders of an organization,
namely shareholders, employees, clients, pressure groups,
communities and so on (Dyllick & Hockerts, 2002). Stake-
holder theory is particularly applicable to SSCM because
stakeholders’ pressure may lead a firm to adopt some
SSCM practices that are initially economically unfavour-
able (Sarkis, Zhu, & Lai, 2011). In the recent times, various
international reporting agencies on sustainability such as
the Global Reporting Index (GRI), non-governmental
organizations, regulating bodies, press and media and the
society are putting pressure on the organizations to pursue
sustainability in their operations. Companies need to
pursue responsible business practices to ensure equal
importance being given to the interests of stakeholders
because the stakeholder theory suggests that every indivi-
dual or party (stakeholder) participates in the activities of a
firm to obtain benefits (Morali & Searcy, 2013). The
predominant stakeholder of the firm is the shareholder.
Sometimes a firm may pursue strategies that maximize the
wealth of shareholders at the cost of harming the interest of
other stakeholders. However, companies cannot forego the
interest of other stakeholders for the sake of wealth
maximization of the shareholders. The reason being, the
company will not be able to make profits if the society
refuses or is unable to provide resources to the firm and
also refuses or is unable to buy products manufactured by
the firm. Hence, the organizations must balance the needs
of all the stakeholders in order to sustain itself in the long
run. In the present article, the stakeholder theory is studied
with respect to local and small suppliers and society
involved in a sustainable supply chain. The impact of sus-
tainable practices, like procurement from local and small
Mann and Kaur
suppliers, and sustainable projects/products for society on
the financial performance of the firm is studied in the
present article. From the discussion, four hypotheses have
been formulated regarding stakeholders:
Sustainable Sourcing
This activity highlights the methods in place for sustainable
sourcing.
It basically refers to making sure that a company’s social
and environmental performance extends to its supply chain.
The company is supposed to list all the activities that it
manages and all the processes it has established to promote
its supply chain sustainability by sourcing from social and
environmental certified suppliers, including transportation
initiatives like using CNG vehicles for controlling pollution.
Blome et al. (2014) concluded that sourcing from the sus-
tainable supplier has a positive impact on the environmental,
social and financial performance of the firm through the cost
reduction for the organization. Kashmanian, Wells, and
Keenan (2015) argue that check on the suppliers can help to
map out suppliers, minimize risks associated with business
and in bringing out inefficiencies, but are not capable of
increasing market share. Carter and Jennings (2002) find
that on the basis of social responsibility, there is a positive
association between buyer–supplier relationships and it
increases the operational performance of the firm. This may
happen because strong relationships are built between pur-
chasing managers and supplier who have the same values
that are socially responsible values. Sustainable sourcing is
related to sourcing of the resources from the nearest possible
source, hence, it would result in cost reduction by reduction
in the transportation costs. Therefore, sustainable sourcing
might result in better financial performance. Hence, the
following hypothesis has been formulated:
H1: Sustainable sourcing has a positive and significant
impact on the financial performance of the
company.
Sustainable Procurement
This activity refers to the steps to procure goods and services
from local and small producers, including communities
surrounding the place of work. According to BRR, ‘local’
means purchasing from the place as near as possible if the
material of equivalent quality is available. ‘Small’ means sole
proprietorship organizations where the owner is a worker,
self-help groups or remote workers, that is, home-based
workers. It also includes producer-owned entities, such as
cooperatives, producer companies. Vachon and Mao (2008)
assert that procurement from near possible community results
in the betterment of local communities and fairness in the
society and this leads to social sustainability. Chan and Wong
(2012) confer that environmentally responsible purchasing
results in better financial performance due to increase in net
income through cost reduction for the organization. Further,
sustainable procurement from the local and small organization
3
will have a positive impact on the environment and the society
as procurement from the locals may result in less transportation
and therefore less pollution. Simultaneously, procurement
from local vendors will generate employment for the local
workers. Bag (2012) find that the sustainable procurement
leads to better financial performance through an increase in
sales and market share. From the above discussion, the
following hypothesis has been framed:
H2: The sustainable procurement has a positive and sig-
nificant impact on the financial performance of the
company.
Sustainable Production
According to BRR, this activity highlights the methods to
recycle the products and waste generated during operations.
Sustainable production is about the procedures that the firms
have in place to recycle their products after consumption by
consumers including the packaging. Murray, Kotabe, and
Wildt (1995) find that production innovation and process
innovation have a positive impact on the financial perfor-
mance of the company. Gallego-Alvarez et al. (2015) study
the relationship between decreased greenhouse gas emis-
sions in the sustainable supply chain and financial perfor-
mance, and concluded that there is a positive and significant
relationship between decreased greenhouse gas emissions
and corporate financial performance. Aguilera-Caracuel
and Ortiz-de-Mandojana (2013) confer that technological
improvement saves energy and recycles waste material,
thus, contributing to the sustainability and this has a positive
impact on the financial performance of the company. The
reason might be that energy saving and recycling can be
used for other purposes in the production process, thus,
leading to the cost reduction for the company. Therefore,
the following hypothesis has been framed on the basis of
the above discussion:
H3: Sustainable production has a positive and signifi-
cant impact on the financial performance of the
company.
Sustainable Product/Projects
This activity throws light on the projects and products
developed by the firm that have positive effects on the
society. These products and initiatives must be safe and
contribute to the sustainability throughout their life cycle.
Seuring and Muller (2008) have defined sustainable
products as the products that have included all the
environmental dimensions, such as ISO standards and
social dimensions, such as no child labour. Wang, Chan,
and Li (2015) suggest that green product design may not
have a positive impact on the financial performance of the
company as it adds to the cost of production. Walley and
Whitehead (1994) confer that the firms investing in green
products incur additional costs, thereby decreasing the
financial performance of the company. Thus,
4
H4: Sustainable product/projects have a negative and
significant impact on the financial performance of
the company.
Resource-based View
A company can enjoy sustained competitive advantage if its
resources are rare, unique and indispensable (Barney, 1991).
Hart (1995) states that the efficient resource utilization is a
challenge and the pressure is posed by the environmentalists
regarding the degradation of the environment. Resources of
the companies are the employees, processes, methods,
finance and so on. These resources are needed to procure,
manufacture and deliver the products and services to the end
users. These resources must be used in a responsible manner
so that all the stakeholder needs get sustainably fulfilled.
Ruf, Muralidhar, Brown, Janney, and Paul (2001) proclaim
that a company opting new design process may relish a
sustainable competitive advantage over a company that only
uses filtering equipment at the end of the process as a
formality to meet the legal requirement. Vachon and Klassen
(2006, 2008) state that the RBV has recently received
support in research linking environmental sustainability
practices related to the supply chain activities to improved
economic, operational and market performance. These
authors note that the supply chain processes have a direct
impact on the natural environment, and the practices to
manage and reduce this impact can develop capabilities to
improve financial performance. In the present article,
resource-related activities in the SSCM, such as resource
utilization, sustainable production, sustainable sourcing and
resource saving, are studied. Further, the impact of these
sustainable practises on the financial performance of the
firm is studied. Following two hypotheses have been framed
regarding the resource-based view (RBV).
Resource Utilization
This activity highlights the reduction of resources (water,
energy and raw material) emission reduction during the
production, sourcing and distribution in the entire supply
chain. Vachon and Wao (2008) conclude that saving of the
resources with the help of recycling during production
results in improved environmental performance. Hart and
Ahuja (1996) find that emission reduction and efforts to
prevent pollution result in better financial performance for
high emission producing companies. The reason might be
that saved resources directly translate into cost reduction
and also reduce the environmental impact. Hanifan,
Sharma, and Mehta (2012) resolve that supply chains of
manufacturing companies incur more than half of the total
expenses and greenhouses gas emissions. As the suppliers
are more associated with environmental change, therefore,
it is important to consider the cost and environment change
analysis. We hypothesize that better utilization of resources
will lead to better financial performance. Hence:
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H5: Resource-utilization has a positive and significant
impact on the financial performance of the
company.
Resource Saving
Resource saving throws light on saving of resources (water
and energy) by the consumers during the usage of the
product. Vachon and Klassen (2006) assert that green co-
operation with customers has a positive impact on the envi-
ronmental performance. Geng et al. (2017) find that green
customer collaboration is strongly linked with operational
performance. However, the firms have to invest in training
programmes to educate consumers about the resource
saving. This might lead to receding financial performance.
The firms might have to invest in advertisements to show
resource saving benefits to their customers; these initiatives
can result in higher costs. However, it might lead to cost
reduction at the customer end. Hence:
H6: The resource saving has a negative and signifi-
cant impact on the financial performance of the
company.
On the basis of the above-discussed theories, it can be
deduced that SSCM of the firms generate: First, better
financial performance if the companies focus on the interest
of all the stakeholders by fulfilling the varied demands of the
stakeholders. Second, Sustainable resource utilization not
only creates sustainable competitive advantage and helps in
grasping the opportunities provided by environmentalists,
society, pressure groups, government and regulating bodies
for making the supply chain sustainable.
Research Question
There is inexactness in the literature regarding the impact
of SSCM on the financial performance of the corporations
because the results are mixed. One set of researchers shows
a positive impact of SSCM on financial performance of the
firms (D’Avanzo, von Lewinski, & van Wassenhove, 2003;
Ellinger et al., 2011; Ellram & Liu, 2002; Golicic & Smith,
2013; Li et al., 2011; Nayar, 2005; Mitra & Singhal, 2008;
Tan, Kannan, Handfield, & Ghosh, 1999). Whereas,
another set of researchers confirms a negative impact
(Jiang, Belohlav, & Young, 2007; Kotabe & Murray, 2004;
Wieder, Booth, Matolcsy, & Ossimitz, 2006). Further, Ahi
and Searcy (2015), Esfahbodi et al. (2016), Geng et al.
(2017), and Vachon and Klassen (2006) find that upstream
activities are strongly associated with better financial
performance, while Gallego-Alvarez et al. (2015), Geng
et al. (2017) and Golicic and Smith (2013) argue that
operational activities are more strongly associated with
economic performance. Mitra and Singhal (2008) and
Seuring and Muller (2008) assert that downstream activities
contribute to the improved financial performance. Further,
Mann and Kaur
most of the studies are confined to the emission of gases
and pollutants, that is, only the environmental dimension
of TBL (Buchholz, 1998; Epstein & Roy, 2001; Jose &
Lee, 2007; Kolk, 1999, 2003). Rajeev et al. (2017) confer
that studies focusing on the three pillars of SSCM, that is,
economic, environmental and society are scarce. Therefore,
there is a need to study all the three pillars of TBL that
contribute to the higher financial performance of the
corporations.
As discussed earlier, there is also ambiguity relating to
the activities actually contributing to the financial perfor-
mance as no research has been undertaken by breaking
down the SSCM activities into micro activities based on
the mandatory sustainability reporting. There is a need to
undertake the research at the micro level to uncover the
activities in SSCM that increase the financial performance
of the company.
Further, most of the previous research is confined to the
developed economies (Ameer & Othman, 2012; Gill,
Dickinson, & Scharl, 2008; Jose & Lee, 2007; Kolk & Pinkse,
2007; Lo & Sheu, 2007; López, Garcia, & Rodriguez, 2007;
Morhardt, 2010; Wagner, 2010). However, there has been an
increase in sustainability disclosures after 2012 in India. SEBI
Figure 1. Sustainable Supply Chain Management and Financial Performance
Source: The authors.
5
has mandated the Regulation 34(2)(f) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations 2015
(SEBILODR) for the companies to disclose sustainability
regarding activities in their annual reports. Furthermore, the
findings of the researches in developed economies may or
may not hold true in an emerging economy like India.
Thus, the present study focuses on the following
objectives:
1. To study the impact of the sustainable supply chain
on the financial performance of the firms in India.
2. To evaluate the activities contributing to the finan-
cial performance of the firms based on the manda-
tory sustainability reporting.
Thus, the present study adds to the body of existing
literature on the sustainable supply chain in an emerging
economy like India.
Independent variables used are derived from previous
literature and from the proforma of BRR. An explanation
of the explanatory independent variables is derived from
the proforma of BRR and previous literature. The hypo-
theses discussed earlier are shown in Figure 1.
6
Database and Sample Selection
For achieving the above-mentioned objectives, the top 100
(market capitalization) BSE listed companies are selected.
During the year 2012, SEBI made it mandatory for the top
100 (market capitalization) BSE listed companies to dis-
close BRR either in their annual reports or in the sustain-
ability report. The report is divided into nine principles.
One of the nine principles is named ‘Life cycle sustain-
ability of goods and services’. Annual reports have been
extracted from the BSE and the official websites of the
companies. Further, the financial data has been collected
from PROWESS software, the database owned by Centre
for Monitoring Indian Economy.
Methodology
Life cycle sustainability assessment (LCSA) methodology
as propounded by Finkbeiner, Schau, Lehmann, and
Traverso (2010) is used in the present article. LCSA focuses
on the three pillars of sustainability, that is, the social, the
economic and the environment. Rajeev et al. (2017) has con-
ferred that sustainable distribution, sustainable design, sus-
tainable production, sustainable purchasing and sustainable
development cover the three factors of sustainability. In the
present study, in order to cover all the dimension of TBL,
following Srivastava (2007), Seuring and Muller (2008) and
Golicic and Smith (2013), the upstream activities are further
broken down into smaller activities, namely sustainable
sourcing, resource utilization and sustainable procurement.
Similarly, the operations have been studied as sustainable
production that includes reduction of waste and recycling
activities. Downstream activities are further broken down
into smaller activities such as sustainable products/projects
and resource saving. Business responsibility has also listed
sustainable products/projects and resource saving as two
activities to be reported by the firms.
To achieve the objectives of the article, content analysis
has been employed to analyse the principle ‘life cycle
sustainability of goods and services’ from the BRR.
Further, multiple regression analysis has been conducted to
check the impact of SSCM activities on the financial
performance of the companies.
Content Analysis
Content analysis is widely used in the sustainable supply
chain literature (Ameer & Othman, 2012; Gill et al., 2008;
Jose & Lee, 2007; Morhardt, 2010; Rondinelli & Berry,
2000). The two researchers separately content analysed
‘life cycle sustainability of goods and services’ principle
from BRR. First, we generated the activities in the supply
chain based on the previous research and the BRR. The
activities identified are: (a) sustainable products/projects,
(b) sustainable production, (c) resource utilization, (d)
resource saving, (e) sustainable procurement and (f)
Vision
Table 1. The Score Sheet
Score Explanation
4 Significant quantitative information in the form of
facts figures with huge details.
3 Significant qualitative information without
disclosing facts and figures.
2 Only the required information.
1 No information provided.
Source: The authors.
sustainable sourcing. Second, each activity is assigned a
score ranging from 4 to 1 based upon the content given in
the BRR. Analysis of the content has been undertaken in
the following manner: If a firm reported a significant quan-
titative contribution to related activity, the firm gets a score
of 4. Significant quantitative information means financial
information, detailed contribution in the terms of numbers
and so on. If a firm disclosed significant qualitative con-
tribution to the related activity, we give it a score of 3. For
example, detail of sustainable product but without dis-
closing the quantity of energy it saves and resources it uses.
We give a score of 2 for the activities which reported the
required information only and not much more. For instance,
the firm that reports the activity in the form of yes and no
only. And, the last score of 1 is given to the company that
does not report any contribution related to that activity.
Similar scoring is reported by Bart (2007) for the content
analysis of mission statements. The score sheet is illustrated
in Table 1.
Regression Analysis
Following López et al. (2007), Lo and Sheu (2007), Wagner
(2010) and Ameer and Othman (2012) multiple regression
analysis has been used in the present article. Tobin’s q has
been taken as the dependent variable to measure the fina-
ncial performance. Tobin’s q being the ratio between the
value of the company’s assets and the replacement cost of
the company’s asset (Kaldor, 1966) is a robust measure of
financial performance. The expected signs for the explana-
tory variables are given in Table 2.
Table 2. Expected Signs of the Independent Variables for the
Firms
Variables Expected Sign
Sustainable sourcing +
Resource utilization +
Sustainable procurement +
Sustainable production +
Resource saving –
Sustainable products/projects –
Source: The authors.
Mann and Kaur 7

Apart from the six explanatory independent variables
and one dependent variable (Tobin’s q), an additional
control variable has been included in the model on the
basis of existing. The control variable included is sales
growth, which is measured as a natural log of sales change.
Analysis and Interpretation
This section details the impact of sustainable supply chain
activities on the financial performance of the company.
The regression findings reveal that sustainable supply
chain activities have a significant impact on Tobin’s q
(R2 = 0.18, f-value 2.757 and p = 0.012). Thus, the
independent variables explain the 18 per cent variance in
the dependent variable. Hence, the sustainable supply
chain practices have a significant impact on the financial
performance of the company.
Further, the results of the regression analysis show that
some activities have a significant positive impact while
other activities have a significant negative impact on
Tobin’s q. Sustainable sourcing (β = 1.999 and p < 0.05)
and resource utilization (β = 1.996 and p < 0.05) have a
significant positive impact on the Tobin’s q such that
Tobin’s q of a firm increases with the increase in
sustainability in sourcing and resource utilization by the
firm. Thus, H1 and H5 are supported, meaning thereby that
sustainability in sourcing (Blome et al., 2014; Carter &
Jennings, 2002; Kashmanian et al., 2015) and resource
utilization (Hart & Ahuja, 1996; Vachon & Wao, 2008)
activities have a significant positive impact on the financial
performance of the firm. Resource saving (β = –2.623 and
p < 0.05) has a significant negative impact on Tobin’s q of
the firm, that is, Tobin’s q decreases with the increase in
sustainability in resource saving. Thus, H6 is supported
meaning thereby that resource saving has a significant
negative impact on the financial performance of the firm.
Sustainable procurement, sustainable products/projects
(Wang et al., 2015) and sustainable production have no
significant impact on Tobin’s q (p > 0.05) of the firm.
Therefore, H2, H3 and H4 are not supported because they
Table 3. Results of Regression Analysis
Independent variables Std. Coefficient sig
Intercept 2.351 0.001
Sustainable sourcing 1.999 0.049
Resource utilisation 1.996 0.049
Sustainable procurement 0.297 0.767
Sustainable production 0.232 0.817
Resource saving –2.623 0.010
Sustainable products/projects –0.198 0.844
Sales growth 1.926 0.057
f-value, p-value 2.757 0.012
R2 0.18
Adjusted R2 0.11
Source: The authors.
have no significant impact on the financial performance of
the firm. The control variable sales growth (β = 1.926 and
p < 0.05) has a significant positive impact on Tobin’s q.
From Table 3, it is clear that the two major activities that
positively contribute to the financial performance of the
companies are sustainable sourcing and resource utilization.
These two activities are part of the upstream activities of
the SSCM.
Conclusion and Implications
From the results of the regression analysis, it can be
concluded that the financial performance of the company is
affected by sustainable activities in the supply chain.
However, the results of the analysis have both positive and
negative impact on the financial performance of the firm.
Frost, Jones, Loftus, and Laan (2005) and Vijfvinkel,
Nasser, and Jolanda (2011) have also found similar results.
Hart (1995) and Vachon and Klassen (2006) have found a
positive impact of upstream activities on the financial
performance of the firm. Our research also shows that the
two activities that have a significant positive impact are the
upstream activities. The reason might be that in India,
being a vast country, the resources are scattered, and
transporting raw material from the nearest supplier may
save resources, like energy, and may reduce pollution and
the cost for the firm. Another interesting finding highlighted
in the study is that resource saving by customers has a
significant negative impact. The reason might be that the
firms have to invest in training programmes to educate
consumers about the resource saving. The firms might
have to communicate the benefits of resource saving to
the consumers.
Though firms have not been able to translate resource
saving and sustainable products and projects into enhance-
ment of financial performance but still, firms can benefit
by positioning the product as a sustainable product. The
positioning of the product discloses its benefits and sustain-
ability that differentiate the product in the marketplace.
There is a definite shift in consumer preferences for sustain-
able products. This is an opportunity that is not being
exploited by the companies as yet and hence it is not getting
translated into better financial performance. The managers
need to target this segment.
The results of the study offer implications for the
companies. First, managers of all companies should focus
on sustainable activities in order to enjoy better financial
performance because sustainability practices in activities
increase Tobin’s q of the company. Second, companies
must source material from suppliers who are certified to be
compliant with environment standards so as to increase
their company’s shareholder value. Third, companies must
also focus on saving energy, water and raw material in
order to enjoy the better financial performance. Fourth,
transporting raw material from the nearest possible supplier
is another activity that companies need to focus upon.
8
The study also adds value to the existing literature on
SSCM. Our study extends the sustainable development
theory to an emerging market like India. In fact, it is one of
the initial studies that has focused on the sustainable supply
chain activities at micro level as mandated by the regulators
of sustainability reporting, and studies the impact of such
activities on the financial performance of the Indian firms
and tries to highlight the sustainable activities of the supply
chain that actually contributes to the performance of the
company.
Scope for Future Research
The present study focuses on the process-specific interven-
tions like the life cycle analysis. Sybertz (2017) defines the
process-specific interventions as the actions within the
supply chain that are being applied to aim better environ-
mental, social and economic performance (TBL dimen-
sions). Further research can be conducted using issue-specific
interventions such as usage of energy and fossil fuel, and
carbon emission in the SSCM. According to Sybertz (2017),
issue-specific interventions concentrate on issues that strike
particular supply chains but are focused on important issues
that can affect different activities within a supply chain.
Addition of these variables in SSCM can make the future
studies more robust.
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect
to the research, authorship and/or publication of this article.
Funding
The authors received no financial support for the research,
authorship and/or publication of this article.
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About the Authors
Bikram Jit Singh Mann (bikrammann@hotmail.com) is
Professor in the Department of University Business School,
Guru Nanak Dev University, Amritsar, Punjab, India. He has
a PhD in brand management and his areas of teaching and
research interest are brand management and strategic man-
agement. He has published research papers in national and
international journals of repute such as International Business
Review, Emerging Markets Review, International Journal of
Market Research, Journal of Brand Management, Journal of
Product and Brand Management, Journal of Marketing
Communication and so on.
Harmeet Kaur (harmeet027@gmail.com) is a Research
Scholar in the Department of University Business School,
Guru Nanak Dev University, Amritsar, Punjab, India. She
is pursuing her PhD (as UGC Research Fellow) in strategic
management.