Impact of Environmental Practices on Triple Bottom Line: Insights from Vertically Integrated Textile Units in Pakistan

Abstract

Businesses no longer consider themselves as only profit-bearing entities but also as systems responsible for incorporating stakeholders’ view of sustainability, accounting for the influence of their operations on the society and the planet. Organizations are becoming actively involved in mitigating adverse environmental and societal impacts of their supply chain activities. Although the initial focus of global expansion was only towards improving the economic performance of organizations through lower cost of production and access to “economical” labor recent years have seen a collective interest of industry specialists towards three-fold dimensions of sustainable performance. These dimensions are the environment, society, and economy. The presented research addresses the effects on firm performance in all three dimensions of sustainability. It will assist corporations in designing eco-friendly supply chains, with lower negative social and economic impacts, hence, moving towards sustainable development. The study employs a cross-sectional approach by surveying vertically integrated textile units operating in Pakistan. Apart from three performance-related variables, four constructs were included in the theoretical framework. These were environmental management practices, sustainable design for products & processes, sustainable distribution initiatives, and resource and emissions control initiatives. “The research reports that collective adoption of environmental practices directly or indirectly has a significant impact on firm performance.” Analysis of collected data through SEM reveals thatΩadoptionΩof environmentalΩmanagementΩpractices positively impacts environmental and social performance of firms while there is no significant influence on economic performance. Further to this, it has been found that the resource & emission control initiatives can significantly improve the environmental performance, however; they have no significant potential to enhance the social and economic performance. Research limitations, areas for future research,ΩandΩimplicationsΩfor practitioners are also discussed in the final chapter”.