Environmental supply-chain innovation

This paper proposes a model describing why firms should invest in environmental supply-chain innovation or ‘green supply’ activities. It argues that large, high-profile companies are under pressure from a wide range of stakeholders to improve their environmental performance. In contrast, small supplier firms are under less pressure but are highly influenced by the demands of their customers. The model attempts to demonstrate that firms invest in environmental supply-chain innovation because suppliers with poor environmental practices can expose the customer firm to high levels of environmental risk. However, implementation is dependent on environmental pressure, firm capabilities and the degree to which customer firms are able to control their suppliers. The model is tested on UK supermarket retailer J. Sainsbury plc and five of its suppliers in a case study conducted over a four-year period in the late 1990s.