Carbon neutrality drivers and implications for firm performance and supply chain management

Many nations have committed to achieving carbon neutrality to combat climate change, but little is known about its drivers at the micro level and implications for firm performance and supply chain management. To address the knowledge gap, this research conducts case studies of seven early movers in...

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Bibliographic Details
Published in:Business strategy and the environment 2023-05, Vol.32 (4), p.1966-1980
Main Authors: Zhang, Abraham, Tay, Huay Ling, Alvi, Muhammad Faizan, Wang, Jason X., Gong, Yu
Format: Article
Language:English
Subjects:
Business competition
Carbon
Carbon neutrality
case study
Climate change
Competitors
Customers
drivers
Enforcement
Environmental management
External pressure
Legitimacy
multi‐tier supply chain
Neutrality
Organizational performance
Stakeholders
Stockholders
Supply
supply chain decarbonisation
Supply chain management
Supply chains
Top management
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Summary:Many nations have committed to achieving carbon neutrality to combat climate change, but little is known about its drivers at the micro level and implications for firm performance and supply chain management. To address the knowledge gap, this research conducts case studies of seven early movers in the initiative by exploring the key drivers, influential stakeholders and effects of institutional pressures. We find four major drivers: ‘customer enforcement’, ‘sustainable business value’, ‘environmental legitimacy’ and ‘competitive pressures’. Customers and competitors were the most influential external stakeholders. Shareholders and top management with intrinsic environmental values, being internal stakeholders, played pivotal roles in a proactive move to carbon neutrality when there was limited regulatory pressure. The early movers believed in the long‐term economic benefits of transitioning to carbon neutrality. We also identify the implications of carbon neutrality initiatives for supply chain management. Based on the research findings, we develop a decision support framework to guide firms in transitioning towards carbon neutrality in a multi‐tier supply chain context.
ISSN:0964-4733
1099-0836
DOI:10.1002/bse.3230