The Effect of Company Ownership on the Environmental Practices in the Supply Chain: An Empirical Approach

Liliana Rivera, Norma Ortiz (), Gabriel Moreno and Iliana Páez-Gabriunas
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Liliana Rivera: School of Management, Universidad de los Andes, Bogotá 111711, Colombia
Norma Ortiz: School of Management, Universidad de los Andes, Bogotá 111711, Colombia
Gabriel Moreno: School of Management, Universidad de los Andes, Bogotá 111711, Colombia
Iliana Páez-Gabriunas: School of Administration, Universidad del Rosario, Bogotá 110111, Colombia

Sustainability, 2023, vol. 15, issue 16, 1-24

Abstract: Investors are increasingly drawn to ESG-based investing because they seek well-run businesses, believing that companies integrating ESG factors are better managed. However, the impact of company ownership on environmental performance remains unclear. This study aims to address this gap by examining the relationship between company ownership and company interest in measuring the environmental impact of its supply chains, as the environmental aspect is directly linked to supply chain activities and has quantifiable measures. Using random effects ordered logistic regression on panel data from 2017 to 2022 for 2811 companies, we show that companies with long-term investment sources demonstrate a greater interest in measuring environmental variables in their supply chain compared to those financed with short-term investments. Sovereign wealth funds and other long-term investment sources exhibit a positive and significant correlation with higher utilization of ESG indicators in the supply chain. These findings suggest that policymakers and private companies aiming to enhance sustainability should prioritize longer-term investment sources, which display stronger commitments to sustainability and ESG practices and are more likely to use environmental initiatives in their supply chains.

Keywords: sustainability; environmental supply chain management; green supply chain; ESG; ownership; financial performance; principles for responsible investment; corporate social responsibility (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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