infonet-economy

Public interest on firms' business practices in respect to society and the environment has motivated firms to develop individual statements about their corporate sustainability standards. These statements communicate to the firm's stakeholders that the creation of its products and services remained within the limits of its self-defined sustainability standards.
Most firms procure a substantial portion of their value added from third parties, like suppliers, sub-suppliers, or logistics service providers, which are out of the firm's direct control. Nevertheless, external stakeholders such as NGOs, media and consumers hold the focal firm responsible for all practices involved in the making of the product. Suppliers and sub-suppliers not complying with the firm's sustainability standards may damage the firm's reputation, causing considerable revenue losses. However, firm's resources to control their (sub-)suppliers' sustainability compliance are limited.
Recent research highlighted the importance of a 'sustainable supplier risk management capability' to enable efficient usage of limited resources by means of identifying, assessing, and controlling sustainability-related risks within the value chain - and the corresponding alignment of compliance management activities such as supplier assessment, development and monitoring.
In this paper, we propose a measurement instrument for firm's 'sustainable supplier risk management' capability. It combines the results from a literature review, semi-structured interviews, and two roundtable discussions with academic and industry experts. The proposed items may be tested statistically in the future to serve as basis for quantitative research.