Environmental Management Strategy: The Impact of Green Logistic Practices and Green Supply Chain Management on Environmental and Economic Performance
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Environmental management strategies and green logistics are the main forces driving sustainability and financial performance. Green supply chain management shows uncertain results, highlighting the need for stronger coordination across supply chain levels. To stay competitive and compliant, firms must integrate environmental goals into core business strategies.
Summary
- EMS and GL are key drivers of environmental and economic outcomes.
- GSCM’s contribution remains inconclusive in this setting, calling for deeper integration across supply chain tiers.
- For Malaysia’s logistics and manufacturing sectors, aligning business strategy with environmental objectives is crucial to achieving both competitiveness and compliance.
- Future studies should adopt qualitative approaches to explore why GSCM effects are limited, focusing on leadership commitment, organizational culture, and regulatory influence.
Aim & Context
This study investigates how environmental management strategies (EMS), green logistics (GL), and green supply chain management (GSCM) influence both environmental and economic performance in ISO 14001–certified Malaysian manufacturing firms.
It responds to growing global and national demands for sustainable industrial practices, exploring whether green initiatives can simultaneously improve ecological outcomes and profitability.
Methodology
- Design: Quantitative, cross-sectional study.
- Sample: 102 Malaysian manufacturing firms certified under ISO 14001.
- Data collection: Structured questionnaire distributed to supply chain professionals.
- Analysis: SPSS and Partial Least Squares Structural Equation Modeling (PLS-SEM) used to test hypotheses and model relationships among EMS, GL, GSCM, and performance indicators.
Key Findings
1. Environmental Management Strategy (EMS)
- Positively affects environmental performance and drives both green logistics and green supply chain practices.
- No significant relationship found between EMS and economic performance, suggesting environmental gains may not immediately translate into financial returns.
2. Green Logistics (GL)
- Shows strong positive effects on both environmental and economic performance.
- Demonstrates that logistics innovations—such as optimizing transport routes, using recyclable packaging, and adopting eco-efficient warehouse systems—directly enhance sustainability and cost efficiency.
3. Green Supply Chain Management (GSCM)
- Did not show significant influence on environmental or economic performance within this context.
- Indicates possible implementation gaps or short-term cost pressures limiting visible financial benefits.
4. Mediating Relationships
- EMS improves performance largely through its impact on green logistics, not via supply chain management alone.
- Together, EMS and GL explain over 65% of the variance in environmental performance.
5. Discussion & Implications
- Strategic environmental management remains a key determinant of firm sustainability.
- Manufacturers are progressing in green logistics, but full supply chain integration remains inconsistent.
- Policymakers and industry leaders should focus on; Incentivizing green logistics technologies (e.g., tax relief, grants). Strengthening infrastructure and regulatory frameworks for sustainable transport and warehousing.Encouraging cross-functional collaboration and supplier partnerships for integrated green practices.
- While firms recognize environmental responsibility as a strategic need, the economic payoff is still evolving, emphasizing the importance of long-term commitment and continuous improvement.
Takeaways for Practice
- Strengthen Environmental Strategy and Logistics. EMS and Green Logistics are the main drivers of better environmental and economic performance.
- Integrate the Whole Supply Chain. Expanding green practices to suppliers and partners to close implementation gaps.
- Commit for the Long Term. Sustainability delivers lasting value with continued investment, innovation, and policy support.
Read the full research study here;
Environmental Management Strategy: The Impact of Green Logistic Practices and Green Supply Chain Management on Environmental and Economic Performance. Advanced International Journal of Business, Entrepreneurship and SMEs, 7(24), 16–40. https://doi.org/10.35631/AIJBES.724002