Thesis Format
Integrated Article
Degree
Doctor of Philosophy
Program
Business
Supervisor
Gualandris, Jury
2nd Supervisor
Klassen, Robert D.
Co-Supervisor
Abstract
The imperative to address climate crises coincides with the understanding that over 90% of corporate environmental impacts reside in suppliers’ operations, which are often globally dispersed and difficult to regulate. Against this backdrop, environmental supply chain transparency – the voluntary public disclosure of suppliers’ environmental impacts and risks – is regarded by scholars, practitioners, and policymakers as a bedrock component of corporate sustainability. Despite this consensus, most suppliers remain opaque, hampering the transition to a more sustainable global economy.
While initial evidence indicates that buying firms can engage their suppliers in environmental transparency through coercion or collaboration, most suppliers maintain contractual relationships with diverse, potentially influential buying firms. There is a paucity of theoretical or empirical evidence to indicate how suppliers sort through this complexity and how such behavior affects their environmental transparency decisions (causes). Even less is known about the efficacy of such transparency towards reducing firms’ exposure to climate risks and enabling significant impact mitigation (consequences), as evidence remains conceptual and anecdotal. In this thesis, I aim to address this need for knowledge by asking what are the causes and consequences of environmental transparency in supply chains?
Towards answering this question, I conduct three empirical research studies, providing several interrelated, yet distinct, contributions. In Essay 1, I examine how suppliers respond to institutional complexity by selectively mimicking the environmental disclosures of their buyers, ultimately revealing the logics underpinning suppliers’ transparency. In Essay 2, I identify the relationship between environmental supply chain transparency and reported environmental supply chain incidents, providing support for a dominant spotlight mechanism. In Essay 3, I reveal how environmental supply chain transparency provides firms with the necessary motivations to make science-based carbon abatement commitments. Across my three essays, I construct unique panel datasets and conduct statistical analyses including regression difference-in-differences, regression with fixed effects, and linear probability models.
My findings contribute to prior research on sustainable supply chain management, the institutional logics perspective, environmental transparency, media scrutiny, and carbon target setting. Furthermore, I detail the implications of my findings for firms, policymakers, and other stakeholders with an interest in advancing environmental transparency in supply chains.
Summary for Lay Audience
To successfully confront the environmental crises of our time, corporations must participate in both climate change mitigation and adaptation efforts. Such efforts entail the reduction of corporate carbon emissions (mitigation) and adjustments to the effects of climate change (adaptation). Towards these objectives, many large and well-known firms have taken initial steps to decarbonize their own operations and explore new business models and processes. However, the most significant and pressing corporate environmental impacts remain invisible, hidden in global supply chains comprised of opaque and unknown suppliers.
To address these hidden impacts and make meaningful progress towards our collective climate goals, many experts across academic, corporate, and political landscapes have advocated for more environmental transparency in supply chains as a foundation for engaging suppliers in climate change mitigation and adaptation efforts. Supply chains are regarded as being environmentally transparent when the suppliers comprising such supply chains are publicly known, and their environmental impacts, such as carbon emissions, are publicly disclosed.
In response to pressures from consumers and other stakeholders including the media, non-governmental organizations, and activists, many consumer-facing firms are now attempting to engage their suppliers in environmental transparency practices. Yet, there is still much to learn about how firms can generate more transparency (causes) and how effective such transparency is at delivering the transformational change its proponents argue for (consequences).
In this thesis, I attempt to contribute to this pressing need for knowledge by conducting three interrelated research studies with data on thousands of companies and their suppliers. My findings reveal that firms with specific exemplary characteristics – high profitability and high transparency – can effectively influence their suppliers’ environmental disclosures through leading by example, contributing to our knowledge on the causes of environmental transparency in supply chains. Furthermore, my analyses provide support for the theory that transparency can attract unwanted attention from the media, leading to reputational risks. Finally, my work suggests that despite such reputational fallout, transparency helps firms mitigate their emissions and prepare to make long-term science-based carbon abatement commitments, contributing important evidence to discourse on the consequences of environmental transparency in supply chains.
Recommended Citation
Diebel, William, "The Causes and Consequences of Environmental Transparency in Supply Chains" (2024). Electronic Thesis and Dissertation Repository. 10066.
https://ir.lib.uwo.ca/etd/10066
Creative Commons License
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