Supply risks as drivers of green supply management adoption

The focus of this paper is on supply risks and green supply management. In particular, the study investigates whether the ability of the focal firm's purchasing function to mitigate different types of supply risks is related to the company's adoption of green supply management. The supply risk types include both direct risks – quality and price of the product/service and indirect risks – property rights, brand and image and outsourcing. Empirical data collected from 165 Finnish companies was used to examine the linkages of a firm's risk management abilities to the adoption of green supply management practices. Based on regression analysis it was found that quality and brand risk management ability are positively related to the adoption of green supply management, whereas price and cost risk management ability have the reverse effect. Thus, the strong cost and price risk management of a company may hinder the adoption of green supply management and companies with high spend are less interested in to adopt green supply management. Furthermore, firm's ability to manage the quality and brand risk in its supply chain drives it towards green supply management adoption.