Drivers for adoption of sustainability initiatives in supply chains of large Russian firms under environmental uncertainty

• Pages: 322-338
• DOI: https://doi.org/10.1108/CG-02-2020-0048
• Date: 08 August 2020
• Published date: 08 August 2020
• Subject Matter: Corporate governance,Strategy
• Author: Yulia Aray,Anna Veselova,Dmitri Knatko,Anna Levchenko

Drivers for adoption of sustainability

initiatives in supply chains of

large Russian f‌irms under

environmental uncertainty

Yulia Aray, Anna Veselova, Dmitri Knatko and Anna Levchenko

Abstract

Purpose –In reaction to the environmental challenge, many fir ms are looking for the ways how to

integrate sustainabilityinto their operations, business models and strategies. Very often sustainable

initiatives go beyond the boundaries of a focal firm engaging a wide variety of partners within the

supply chain. In conditions of countries with institutional deficiencies and voids such as emerging

economies, the task of sustainability integr ation is challenging as many critical conditions needed

for sustainability development are missing . To understand how firms can integrate susta inability

initiatives in theirsupply chains under the conditions of environmental uncertainty, this paper aimsto

investigate firm-level and supply chain drivers that st imulate sustainability implementation in

Russian firms.

Design/methodology/approach –Using the sample of 273 largeRussian firms the paper explores how

firm-leveldrivers such as innovativeness, risk-takingand internationalization, as wellas collaboration and

integration in the supplychain are related to sustainability performance and sustainabilitytransformation

in supplychain. The hypotheses are tested usingregression analysis and the bootstrappingtechnique.

Findings –The study indicates the positive association between sustainability performance and

sustainability transformation of the firm and such strategic drivers as a firm’s innovativeness and

internationalization. The positive moderating effect of environmental uncertainty was found for

innovativeness indicatingthat innovative firms show better sustainable performancein the supply chain

under uncertain conditions. Also, the findings indicate that environmental uncertainty positively

moderates the relationshipsbetween a firm’s transformation forsustainability, its internationalizationand

supplychain integration and coordination.

Originality/value –The obtained resultscontribute to a better understanding of mechanismsthat drive

firms’ sustainability performance and transformation in conditions of emerging markets. The paper

provides an adaptation and empirical testing of Silvestre’s (2015) theoretical model for sustainable

supplychain management in emerging economies.

Keywords Sustainability, Supply chain management, Innovativeness, Environmental uncertainty,

Sustainable supply chain, Russian f‌irms

Paper type Research paper

1. Introduction

With the growth of social and environmental agenda globally, more firms are looking for

opportunities to adopt sustainability within and beyond firm’s boundaries into their supply

chains. To become high performers in the new landscape, companies are driven to come

up with new ways to demonstrate environmental and social responsibility bringing

innovation in business processes, management practices, products and services (Lacy

et al.,2009

). This trend is supported with a growing number of research on sustainable

Yulia Aray is based at the

Department of Strategic

and International

Management, Graduate

School of Management,

Saint Petersburg State

University, Saint

Petersburg, Russian

Federation. Anna Veselova

is based at the Department

of Strategic and

International Management,

National Research

University Higher School of

Economics, Moscow,

Russian Federation.

Dmitri Knatko is based at

the Department of Strategic

and International

Management, National

Research University Higher

School of Economics,

Moscow, Russian

Federation.

Anna Levchenko is based

at the Department of

Operations Management,

Graduate School of

Management, Saint

Petersburg State

University, Saint

Petersburg, Russian

Federation.

Received 1 February 2020

Revised 4 May 2020

16 June 2020

Accepted 22 July 2020

PAGE 322 jCORPORATE GOVERNANCE jVOL. 21 NO. 2 2021, pp. 322-338, ©EmeraldPublishing Limited, ISSN 1472-0701 DOI 10.1108/CG-02-2020-0048

supply chain (SSC) in recent decades (Beske-Janssen et al.,2015;Brandenburg et al.,

2014;Crum et al.,2011;Ghadimi et al.,2019;Ioannou and Serafeim, 2019;Seuring, 2013;

Seuring and Mu

¨ller, 2008). The transformation of supply chains towards sustainability in the

context of emerging markets has several distinctive features that relate to the specificity of

economic, political and social environment, as well as their institutional development. Along

with increasing research on SSCs, there is scarce theoretical studies and empirical

evidence of SSCs in developing and emerging economies (McCormack et al.,2008;

Silvestre, 2015;Sahay and Mohan, 2003). At the same time,emerging market firms actively

integrate into international operations, becoming new global leaders, that makes research

on SSC in emerging markets interestingand worth studying (Zhu et al., 2005).

One of the most relevant and promising research topics for SSC relates to the

understanding of factors and drivers that influence the adoption and integration of

sustainable initiatives within the supply chain, as it has a potential to influence business

performance (Bose and Pal, 2012). In emerging markets, where wide sustainability

adoption is still on the early rise, investigation of antecedents and drivers of sustainability

becomes a top priority researchquestion (Jin and Zailani, 2010).

Prior research has already investigated some factors that could affect the transformation of

supply chain for sustainability suchas risk management, corporate social responsibility and

adoption of green business activities (Jin and Zailani, 2010), stakeholder integration

capability (Carter and Rogers, 2008), organizational climate, firm’s entrepreneurial

orientation and individual values of managers on organizational commitment to

sustainability adoption in supply chains (Ciasullo and Troisi, 2013;Gattiker et al.,2014;

Marshall et al.,2015;Mariadoss et al.,2016).

In this paper, we base our arguments on the theoretical model proposed by Silvestre

(2015), which combines internal drivers, stimulating supply chain capacity and capabilities

for sustainability transformation, along with institutional barriers, hindering the

implementation of sustainable initiatives in emerging markets. The learning activities that

precede the adoption of sustainability rely heavily on collaborative, integrative and

innovative actions that are more difficultto implement in conditions of emerging markets.

The study aims to find internal drivers for the adoption of sustainability initiatives into supply

chains of emerging market firms under external constraints caused by environmental uncertainty.

We use the data from 273 large Russian firms. The choice of large firms as an object of research

is justified by the fact that the process of SSC integration may require significant resources (Wolf,

2011) that only large market leaders are capable to conform to and get benefit from Bose and Pal

(2012). Another reason for studying large firms stands for their existing adoption of supply chain

management, as some studies indicate that the lack of proper activities within the field of supply

chain management and the lack of supply chain orientation can be predictors of sustainable

development projects failure in emerging markets even if investments are at hand. Hence, large

Russian firms were chosen as they could have both the experience in supply chain management

and proper resource base for sustainable initiatives implementation.

This paper is organized as follows: in the next section we present a literature review, then,

we provide a brief overview of SSC practices and initiatives of the leading Russian firms. In

the following sections, we present arguments for our hypotheses and describe the sample,

data and methods of empirical analysis. Further, we report our results, followed by

discussion and conclusions.

2. Literature review

There have been many examplesin the past when environmental and social concerns were

initially over-hyped and, then,eventually either discounted or seen as a reduced threat after

collection of additional evidence and insights. However, recent concerns about sustainable

development, especially related to the increasing environmental concerns of product- and

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