Study shows that customers positively influence corporate environmental practices

This production is vital for riverside communities, directly supporting 300,000 people and involving 54 municipalities in the supply chain.
Energy
06 May 2024
Study shows that customers positively influence corporate environmental practices

The production of açaí berries in the Brazilian Amazon poses some significant social and environmental challenges. The expansion of its cultivation in elevated areas has resulted in environmental impacts such as deforestation and the abstraction of water from rivers. In addition, açaí harvesting is a dangerous activity, often involving child labor and health risks for the harvesters. However, this production is vital for riverside communities, directly supporting 300,000 people and involving 54 municipalities in the supply chain.

In order to analyze the impact of consumer pressure and government regulations on the implementation of social and environmental practices involving the certification of organic agricultural products, two researchers at Fundação Getulio Vargas’ Sao Paulo School of Business Administration (FGV EAESP), Susana Pereira and Maciel M. Queiroz, together with Cyntia Martins, Marcia Santiago Scarpin and Mariana Cavalcante, carried out a study, which was published in Benchmarking: An International Journal.

To address these challenges, companies are working with suppliers to implement social and environmental practices and ensure compliance with government regulations. Sustainable supply chain management is essential, encompassing social, environmental and financial performance. Certification is an important tool in this process, guiding companies toward sustainable practices and giving consumers confidence that suppliers are adhering to them. In this context, customer pressure ends up playing a crucial role, influencing companies’ choices and contributing to the better operational performance of those that implement appropriate environmental practices.

The study was based on a multiple-choice questionnaire, taken by 206 açaí suppliers in the Brazilian Amazon who were certified or in the certification process. A five-point scale ranging from 1 (“strongly disagree”) to 5 (“strongly agree”) was used and the questionnaire covered environmental and social practices, customer pressure, government regulations and operational performance. The questionnaire was filled out in face-to-face interviews, due to the respondents’ low level of education and the fact that they were located in riverside communities far from big cities. The respondents in this survey were mainly small agricultural-extractive producers over the age of 50. It should be noted that the supply chain in question involves more experienced producers with a low level of education.

The study identified that government regulations and certification play crucial roles in promoting social and environmental practices among companies. In emerging economies like Brazil, when the government does not support sustainable policies, companies take on this role, integrating sustainable practices into their supply chains. Certification not only contributes to agricultural sustainability and fair trade, but also reflects companies’ values regarding sustainability.

It was concluded that focal companies play a key role as financiers and collaborators, establishing close relationships with producers and facilitating access to niche markets. The study also showed that consumer pressure has a positive influence on companies’ social and environmental practices. In addition, organic certification acts as a moderator, strengthening the relationship between customer pressure and the implementation of environmental practices. These findings underline the importance of government policies and incentives that promote organic certification and sustainability practices.

Read the full article here.

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