Globalization &

Sustainability

Present Slide
BEING GOOD AT BEING GOOD
The mediating role of an
environmental management system
in value-creating green supply
chain management practices

Presented by Date:
Group 4 March, 2024
Contents

01 02 03
Case Summary Case Analysis Reccomendation

Lê Minh Quân Lê Ngọc Phương Trang Nguyễ n Ngọc Minh Tâm

Nguyễ n Khánh Linh Phan Minh Quân
Hoàng Lâm Quỳnh Như

GS 5 - Group 4
BEING GOOD AT BEING GOOD March, 2024
 MINH QUÂN LÊ

CASE SUMMARY
How do green supply chain management (GSCM) practices and a
Research Question certified environmental management system (EMS) impact a
company's financial performance?

Resource-based view - Examines how a company's

Theoretical Framework
resources and capabilities create a competitive advantage.

Methodology Key Findings Essentially Implications

Analyzed data from 317 US
international manufacturers
over 8 years.
Impact of GSCM practices
Examined the mediating role of
a certified EMS (in the
relationship between GSCM
and financial performance.
Positive impact on accounting-
based financial performance.
Companies implementing both
GSCM practices and a certified
EMS achieve even greater
benefits.
The certified EMS acts as a
mediator, amplifying the value
creation potential of GSCM
practices.
Green supply chain practices.
Having a certified
environmental management
system.
Gain a competitive edge by
adopting GSCM practices
and implementing an EMS.
Investors may favor
companies demonstrating
environmental responsibility.
 QUỲNH NHƯ

INTRODUCTION
1
Clarify previous ambiguous findings about the
relationship between GSCM practices and CFP
This Study
2
Generalize the results of quantitative studies on
the relationship between GSCM practices and CFP

3
Enhances understanding of how valuable environmental
practices are formed within SCM, (resource-based view)

Our findings support the resource-based view that a steady increase in GSCM
practices improves efficiency in the food, textile, and apparel industries, evident
in a better ROA and ROE.
 QUỲNH NHƯ

GREEN SUPPLY CHAIN MANAGEMENT (GSCM)

green design
GSCM activities reverse logistics
Effective GSCM
waste management
GSCM operations/ manufacturing Addressing both
Internal internal and
Is regarded as a external GSCM
Employee training, waste/emission reduction, eco-
fundamental subset initiatives
design (managed independently within the firm)
of SCM
to reduce environmentally harmful practice
Aligning practices
Aims to minimize with stakeholder
External
adverse expectations and
environmental Green purchasing, customer cooperation industry concerns
impacts and have environmental concerns, investment recovery (e.g., pollution for
long-term effects on chemical/heavy
require effort from external parties
future generations manufacturing)
(suppliers/customers)
 QUỲNH NHƯ

THE RELATIONSHIP BETWEEN GSCM AND CFP

Overall
Studies have shown conflicting results on the relationship between
GSCM practices and corporate financial performance (CFP)

No Relationship Positive Negative

No significant impact of GSCM practices Compliance-based
GSCM practices on the boost CFP through environmental practices
economic performance environmental negatively impact
of companies improvements. future profitability
Watson et al. (2004), Zhu et al. (2007), Rao & Holt (2005), Green et al.(2012), Zhu et al. (2005), Montabon et al.
Esfahbodi et al. (2016), and Pinto (2020) Chan et al. (2012), Younis et al. (2016) (2007), Walls et al. (2011), etc.

Implementing a certified environmental management system (EMS) can

mediate the relationship between GSCM practices and CFP.
 KHÁNH LINH

A RESOURCE-BASED VIEW OF STRATEGIC

GSCM PRACTICES
Green Supply Chain Management (GSCM)
Practices
Proactive environmental initiatives a
firm takes throughout its supply chain.

Financial Performance (CFP)

Refers to how well a firm is performing
financially.

Figure 1: Environmental management- Environmental Management Strategy (EMS)

embedded GSCM practices and CFP Helps a firm manage its environmental
impact
Strengthening the relationship between
GSCM practices and CFP
 KHÁNH LINH

A RESOURCE-BASED VIEW OF STRATEGIC

GSCM PRACTICES
GSCM as a Competitive Advantage The Mediating Role of Environmental
Management Systems (EMS)
Green Supply Chain Management
(GSCM) EMS strengthens the link between GSCM
Manage a company's supply chain in an practices and financial
environmentally friendly way.
Improving communication and
pollution prevention and product collaboration within the supply chain
stewardship.
Demonstrating a commitment to
environmental responsibility
help a company differentiate itself from
competitors

Hypothesis 2: An EMS mediates the

Hypothesis 1: The implementation of GSCM
relationship between implementing GSCM
practices will have a positive effect on CFP.
practices and CFP.
 KHÁNH LINH

RESEARCH METHODOLOGY
Target Population: The study focuses on the manufacturing sector because it's
known to have a significant environmental impact (air, water, land contamination)

Sample
Final Sample
MSCI ESG RATINGS

2536 observations (data points)

MSCI ESG STAT
Databases
COMPUSTAT North Representing 317 US
American Database manufacturing firms
Sample Criteria
Covering an 8-year period
US manufacturing firms with
(2013-2020)
subsidiaries in multiple countries
Balanced panel data

RESEARCH METHODOLOGY
Dependent Variable (CFP)
Measure Corporate Financial
Performance (CFP):
Return on Assets (ROA)
Return on Equity (ROE) -
financial performance
Tobin's Q - market
valuation
Mediating Variable (EMS)
Indicates the presence of
(EMS) (ISO 14001).
Scored 1 if a certified EMS is
in place, 0 otherwise (data
from MSCI ESG STAT).
KHÁNH LINH
Independent Variable
Statistical Methods
(GSCM Practices)
Pollution and waste
Natural capital 1.Addressing Time Lags and
Environmental opportunities Unobserved Effects:
Climate change Lagged variables
Higher total score indicates Random effects model.
greater GSCM adoption. 2. Testing the Mediating Effect
of EMS:
Regression analysis.
Control Variables
Bootstrapping
Firm size (total assets)
3. Data Treatment for
Profitability (ROA) - to control
Accuracy:
its effect on Tobin's Q
Winsorizing
Industry type (dummies for
different industries)
Year dummies (to account
for economic changes)
 PHƯƠNG TRANG

RESULTS
Hypothesis 1 & 2: CONFIRMED

The mere investment in GSCM practices

a firm's accounting-based financial

performance
the next year's ROA and ROE

positive impact

better market-
EMS GSCM
based performance
 PHƯƠNG TRANG

DISCUSSION
Question Result Discussion

Manufacturing firms can leverage their

Whether international
manufacturing firms cost saving sand/or differentiation
GSCM practices have a
can achieve a advantages resulting from their
positive impact on CFP
competitive advantage investment in GSCM practice
by implementing GSCM (next year ROA & ROE) Efficient consumption of energy and materials (Zhu et al.,2007)
practices? New market opportunities from environmental product innovations
(Rao & Holt,2005)

A positive relationship The firm has integrated environmental

How or under which between implementing sustainability practices into its strategy and
conditions international GSCM practices and an structure through the adoption of an ISO-
manufacturing firms certified Environmental Management System
can sustain this increase in Tobin's Q was
positive relationship? evident only among (EMS).
coordinating, exchanging, monitoring, evaluating, and documenting
certified EMS adopters internal and external GSCM practices

Importance of considering both

complexity of GSCM practices and the challenges of
internal and external initiatives in the
managing and implementing environmental practices
implementation of GSCM practices
 PHƯƠNG TRANG

DISCUSSION
Internal Initiatives
employee training, waste and toxic emission
reductions, and eco-design management
can be managed independently within the
organization to reduce environmentally
harmful practices
External Initiatives
green purchasing, customer cooperation
with environmental concerns, and
investment recovery
require mutual effort from external parties
such as suppliers and customers

focus on improving processes and practices involve collaboration with external stakeholders
within the organization to achieve sustainability goals

perational efficiency and waste reduction enhance the firm's reputation and customer loyalty

a holistic approach to GSCM, addressing both internal operations and external relationships

The integration of both internal and external initiatives in GSCM practices leads to long-term financial
benefits and the creation of intangible assets

MANAGERIAL IMPLICATIONS
align corporate strategy with an
environmental sustainability strategy that
makes mitigating the firm's effect on the
environment part of its core business
A PRACTICAL (Shireman, 2003)
POINT OF VIEW
adopting an ISO-certified EMS is oneway to
integrate environmental sustainability into
the firm's strategyand structure
AN ACCOUNTING-
implement GSCM practices to become
BASED FINANCIAL more efficient and/or differentiate
PERFORMANCE themselves through their environmental
PERSPECTIVE
sustainability strategy, with a certified EMS
A MARKET-BASED firms receive a higher market valuation
FINANCIAL
PERFORMANCE
when they simultaneously implement
PERSPECTIVE GSCM practices and adopt an EMS
PHƯƠNG TRANG
employees will be more motivated to internalize
sustainable thinking into their daily processes
firms will develop valuable environmental resources
and capabilities that can distinguish them from their
competitors
offer the most potential to a firm's specific operations
throughout the organization
a source of opportunity andtranslate into a competitive
advantage
lever-age complementary capabilities and skill sets that
both simplify the adoption of additional environmental
practices and reduce the initial investment costs
(Darnall et al.,2008)
increased satisfaction of employees and supplier
networks, more customer loyalty and investor
participation, and other forms of stakeholder approval
from integrated GSCM practices

RECOMMENDATION
RECOMMENDATION
Implement a certified EMS like
ISO 14001 to integrate GSCM
practices into the core business
ACTIONS
Conduct a gap analysis to identify
gaps between current practices and
ISO 14001 requirements.
Appoint a senior management
representative and cross-functional
team to lead the EMS
implementation.
Conduct EMS awareness and auditor
training programs for employees
across all functions and sites.
Quân & Tâm
FOR MNCs
EXAMPLE
As a leading automotive
manufacturer, Toyota has
implemented ISO 14001 across its
global operations. They collaborated
with external experts to conduct gap
analyses and ensure alignment with
environmental standards
(Waterworth & Luther , 2018)
Unilever actively trains its workforce
on environmental management.
Their comprehensive programs
cover ISO 14001 principles, ensuring
employees across functions and
sites are aware of their
environmental responsibilities
(Waterworth & Luther , 2018).

RECOMMENDATION
RECOMMENDATION
Focus on internal (waste
reduction, eco-design) and
external (green purchasing
investment recovery) GSCM.
ACTIONS
Implement a green office program
covering energy/water conservation,
recycling, green procurement.
Collaborate with a major logistics
provider to set up a reverse logistics
program for product take-back and
recycling.
Incorporate environmental criteria
like emissions, water use, chemicals
into new product design processes.
Quân & Tâm
FOR MNCs
EXAMPLE
Amazon collaborates with
logistics providers to set up
efficient reverse logistics
systems. Their “Frustration-Free
Packaging” initiative encourages
recyclable packaging and facilitates
product returns. They also partner
with organizations for product
take-back and recycling (Nolan,
2022).
Patagonia, an outdoor
clothing company,
emphasizes sustainable
product design. Their “Worn
Wear” program encourages
customers to return used
clothing for repair, resale, or
recycling (Becker-Ritterspach
et al., 2019).

RECOMMENDATION
RECOMMENDATION
Develop firm-specific GSCM
capabilities that are hard to
imitate, leading to sustained
competitive advantage.
ACTIONS
Invest in R&D for sustainable
packaging solutions that use
recycled/renewable materials and are
recyclable after use.
Develop an environmental scorecard
system to evaluate and improve the
performance of suppliers.
Implement an environmental profit &
loss accounting system to quantify
the environmental impacts and costs.
Quân & Tâm
FOR MNCs
EXAMPLE
Puma introduced the “Clever
Little Bag,” significantly
reducing materials and supply
chain logistics. This packaging
reduced cardboard use by
65% compared to traditional
red-box packaging (Bizongo,
2023). The Lego Group focuses on
recyclable packaging. About 75% of
their packaging cardboard comes
from recycled materials. They also
reduce box sizes, saving packaging
material and logistics (Bizongo, 2023).
Siemens integrates environmental
profit & loss accounting. They
assess the environmental impact of
their activities, including emissions,
water use, and resource
consumption (Siemens, 2024).

RECOMMENDATION
RECOMMENDATION
Adopt basic GSCM practices like
waste minimization and green
procurement
ACTIONS
Replace conventional lights with LED
lights and optimize heating/cooling
to reduce energy consumption.
Give preference to local suppliers
when making purchases to reduce
transportation emissions.
Perform a waste audit and segregate
different waste streams for
recycling/proper disposal.
Quân & Tâm
FOR SMEs
EXAMPLE
Greener Printer, a small commercial printing company in
London, UK, conducted a comprehensive waste audit and
implemented a waste segregation system (GreenerPrinter, n.d).
They now recycle paper, plastics, and other materials, and
have reduced their overall waste generation by 45%.
Noodles & Company, a fast-casual restaurant chain
with over 450 locations, conducted waste audits at
their restaurants and implemented waste
segregation practices (Noodles & Company, n.d).
They now recycle food waste, cardboard,
plastics, and cooking oil, diverting over 70% of
their waste from landfills.

RECOMMENDATION
RECOMMENDATION
Implement a simple EMS
framework to manage and
monitor the environmental impact
of operations
ACTIONS
Define measurable targets like "25%
reduction in waste generated per unit
of production by 2025".
Conduct periodic environmental
audits and management reviews of
EMS performance.
Designate an executive responsible
for overseeing the EMS and
environmental performance.
Quân & Tâm
FOR SMEs
EXAMPLE
Bamboo Sushi, a small restaurant
chain based in Portland, Oregon, set a
target to reduce their food waste by
25% per unit of revenue by 2025. They
implemented various initiatives like
portion control, menu planning, and
composting to achieve this goal
(Bamboo Sushi, n.d).
Squam Lakes Natural Science Center, a
small non-profit organization in New
Hampshire, conducts annual
environmental audits and reviews the
performance of their EMS, which covers
aspects like energy use, waste
management, and conservation efforts
(Green Energy Times, 2019).

RECOMMENDATION
RECOMMENDATION
Collaborate with larger
customers/suppliers who are
implementing GSCM to learn and
meet environmental requirements
ACTIONS
If a supplier to a large manufacturing
company, participate in their
supplier sustainability
audits/surveys.
If a large company is a key customer,
adopt their green packaging/logistics
requirements for products supplied.
Quân & Tâm
FOR SMEs
EXAMPLE
Highlands Plastics, a small plastic component manufacturer
based in Louisville, Kentucky, participates in sustainability
audits and surveys conducted by their larger customers,
including Ford Motor Company and Toyota (Highland
Packaging, 2018).
Bella+Canvas, a small apparel manufacturer in Los Angeles, is
a member of the Sustainable Apparel Coalition, which
provides training, tools, and resources for implementing
sustainable practices across the supply chain (Bella+Canvas,
n.d).
Present Slide

Thank you
Presented by Date:
Group 4 March, 2024
REFERENCE

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Bizongo. (2023). Sustainable Packaging Solutions by 5 leading mncs [part 1]. https://www.bizongo.com/blog/mncs-sustainable-packaging-solutions
Green Energy Times. (2019, May 28). New Green Initiatives at Squam Lakes Natural Science Center. https://www.greenenergytimes.org/2019/05/new-green-
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https://advisera.com/14001academy/blog/2019/10/22/iso-14001-objectives-examples-for-different-company-sizes/
Noodles & Company. (n.d.). We care. We Care | Noodles & Company. https://www.noodles.com/wecare
Siemens. (2024). Sustainability report 2023 - Siemens - Digital Asset Management. https://assets.new.siemens.com/siemens/assets/api/uuid:00095b96-
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Waterworth, D., & Luther , E. (2018). A step-by-step guide to implementing an ISO 14001 ...
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