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Engaging customers and suppliers for environmental sustainability: Investigating the drivers and the effects on firm performance

  • Original Empirical Research
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Abstract

While firms engage stakeholders in their sustainability practices to contribute to a better world resiliently and responsibly, little is known about what drives their ability to generate customer engagement (CE) and supplier engagement (SE) for sustainability purposes. This paper identifies, theorizes, and empirically validates the differential roles of board oversight and incentivization, along with contingencies (a chief marketing officer’s (CMO) presence and governance disclosure), in driving CE and SE. Using data from 308 firms, the paper finds that while board oversight and incentivization positively affect CE, only incentivization positively affects SE. The paper also finds significant moderation effects of CMO presence and governance disclosure. Through multiple post hoc analyses, the paper explores how CE and SE influence firm performance. The paper provides a nuanced understanding of incentive types’ effects and contributes to the literature on grand challenges connecting firms’ strategies and sustainability objectives to customer and supplier engagement.

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The authors have no relevant financial or non-financial interests to disclose.

Notes

  1. https://www.bbc.com/news/technology-54141899

  2. https://www.forbes.com/sites/arielcohen/2020/09/30/walmart-pledges-zero-emissions-by-2040/?sh=1feb2e533aee

  3. https://www.cnbc.com/2021/08/18/apple-amazon-exxon-and-the-toughest-carbon-emissions-to-capture.html

  4. In this paper, we use the terms sustainability and environmental sustainability interchangeably.

  5. https://www.airliquide.com/sustainable-development/act-sustainable-future/abatement-co2-emissions-low-carbon-society

  6. https://www.usa.philips.com/a-w/about/news/archive/standard/news/articles/2023/20230112-philips-becomes-the-first-health-technology-company-to-have-its-entire-value-chain-co2-emissions-reduction-targets-approved-by-the-science-based-targets-initiative.html

  7. https://www.maersk.com/news/articles/2019/03/22/dutch-sustainable-growth-coalition-partners-with-maersk-in-world-s-largest-maritime-biofuel-pilot

  8. https://www.unilever.com/planet-and-society/climate-action/partnering-with-suppliers-to-deliver-net-zero/

  9. https://medium.com/mitsupplychain/barriers-to-sustainability-why-suppliers-are-part-of-the-problem-and-the-solution-8a9c915996ea

  10. https://www2.deloitte.com/content/dam/Deloitte/fr/Documents/sustainability-services/deloitte_make-it-maerkbar_juin-15.pdf

  11. https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/consumers-care-about-sustainability-and-back-it-up-with-their-wallets

  12. https://www.sdcexec.com/sustainability/article/22766464/gartner-inc-visibility-in-supplier-sustainability-is-key-to-progressing-esg

  13. https://www.mckinsey.com/business-functions/sustainability/our-insights/organizing-for-sustainability-success-where-and-how-leaders-can-start

  14. https://www.nytco.com/environmental-social-and-governance/

  15. https://blog.tranetechnologies.com/en/home/sustainable-investing/transforming-board-oversight-sustainability-is-the-strategy.html

  16. https://blackhawknetwork.com/uk-en/resources/best-channel-incentives-for-rewarding-partner-sustainability

  17. https://www.gresb.com/nl-en/leveraging-stakeholder-engagement-to-develop-sustainability-strategies/

  18. Conagra Brands CDP Climate Change 2020 Report. Retrieved June 18, 2023, from https://www.conagrabrands.com/files/cag-cdp-climate-change-2020

  19. https://www.ezconn.com/csr/ESG_2021_en.pdf

  20. https://annual-report.puma.com/2022/en/sustainability/climate/index.html

  21. https://www.capgemini.com/news/capgemini-recognized-for-its-leadership-in-corporate-transparency-and-performance-on-climate-change-on-cpds-a-list/

  22. https://www.cdp.net/en/articles/media/cdp-reports-record-number-of-disclosures-and-unveils-new-strategy-to-help-further-tackle-climate-and-ecological-emergency

  23. https://assets.bbhub.io/professional/sites/10/Governance-Scores-Fact-sheet.pdf

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Acknowledgments

Authors thank the participants of the exploratory investigation.

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Authors and Affiliations

  1. Mays Business School, Texas A&M University, College Station, TX, USA

    Amalesh Sharma

  2. Indian Institute of Management Ahmedabad, Ahmedabad, India

    Sourav Bikash Borah & Tanjum Haque

  3. Operations Management, Quantitative Methods and Information Systems, Indian Institute of Management Udaipur, Udaipur, India

    Anirban Adhikary

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Sharma, A., Borah, S.B., Haque, T. et al. Engaging customers and suppliers for environmental sustainability: Investigating the drivers and the effects on firm performance. J. of the Acad. Mark. Sci. (2024). https://doi.org/10.1007/s11747-023-00995-7

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  • DOI: https://doi.org/10.1007/s11747-023-00995-7

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