External drivers

External drivers refer to pressures stemming from outside of the organization. Still, they significantly influence the organizations' internal actions (Alzawawi, 2014) and are often considered more influential than internal drivers (Saeed et al., 2017). As external pressures emerge, organizations will be inclined to initiate sustainability initiatives to avoid disadvantages or penalties (Saeed & Kersten, 2019). External drivers, such as pressure and expectations from various stakeholders and regulators, will also push organizations to display transparency in their operations (Alzawawi, 2014). The majority of drivers discussed in the SSCM literature can be classified as external drivers. These external pressures are made up of regulatory pressures (e.g., government regulations and legislation), societal pressures (e.g., NGOs and media), and market pressures (e.g., consumers and competitors) (Saeed &

Kersten, 2019; Sajjad et al., 2015).

Regulatory pressures

Regulatory pressures are one of the most frequently mentioned drivers in the literature, and they are a major driver for sustainability (Alzawawi, 2014; Saeed & Kersten, 2019; Sajjad et al., 2015; Somsuk &

Laosirihongthong, 2017). This category of drivers includes pressures from government, regional or international regulators, certifications, trade/professional associations, and financial incentives (Saeed

& Kersten, 2019; Saeed et al., 2017). These pressures are applied by national, regional, or international regulatory institutions, as well as trade associations and certification bodies through standards, laws, procedures, and incentives to encourage sustainable practices. Regulatory pressure significantly influences organizations' decisions to initiate sustainability practices, regulations and legislation act as a strong driver for adopting SSCM practices. Moreover, failure to fulfill these environmental regulations and laws can result in severe fines or legal penalties, which can harm the financial and social performance of the company (Emamisaleh & Rahmani, 2017; Sajjad et al., 2015).

Somsuk and Laosirihongthong (2017) stated that government regulations are an essential driver and described them as the most vital external driver of SSCM practices. Environmental regulations and subsequent actions taken by firms can, according to Porter (1991), lead to competitive advantage.

Thus, Somsuk and Laosirihongthong (2017) suggest that firms should adopt proactive management of these regulations and view them as an opportunity instead of a barrier to create a sustainable competitive advantage.

Nonetheless, some researchers such as Carter and Carter (1998), Agarwal, Giraud-Carrier, and Li (2018), and González-Benito and González-Benito (2006) have concluded that coercive pressures do not constitute a driver of sustainable supply chain activities. Companies driven by compliance to regulations are in a reactive mode and tend not to have thoroughly integrated environmental concerns

14 into their value chain compared to those who are otherwise motivated to do so (Walker et al., 2008).

Diabat, Kannan, and Mathiyazhagan (2014) experienced similar results in their study and concluded that government regulations play a minor role and do not severely impact the adoption of SSCM.

On the other hand, government pressure does not strictly have to be coercive in the form of regulations and legislation. Government support in the form of subsidiaries can also play a key role in adopting sustainable practices. For example, monetary support can provide workers with education and training about sustainable development, which can help eradicate potential barriers (Kausar et al., 2017). Data from Moktadir, Ali, et al. (2018) indicates that government legislation and especially support are a bigger driver for adopting sustainability practices for small-scale companies than for larger-scale companies. They partly contribute this to a lack of sufficient capital in smaller-scale companies. Thus, they will benefit more from government financial support (Moktadir, Rahman, et al., 2018). Lastly, certifications could potentially help promote SSCM practices. According to Alzawawi (2014), certified firms are more likely to adopt sustainable practices in their supply chain activities and engage their suppliers in environmentally friendly practices.

On the whole, regulations and legislation are portrayed as a strong driver of SSCM practices, especially if organizations see them as motivators to innovate and approach regulatory compliance proactively (Walker et al., 2008). Furthermore, (Kausar et al., 2017) found that government policies and supportive systems act as a significant driver to achieve sufficient top management support, which in its own right is a driver of SSCM (Kausar et al., 2017).

Societal pressures

Societal pressures are expectations or demands that different interest groups have from the organization to adopt sustainability practices in their operations. These pressures help increase public awareness around various sustainability issues, e.g., scarcity of resources, environmental damage, human rights, and much more. They also unite efforts to influence organizations and their supply chains to improve their sustainability performance. Drivers that are expected to influence societal pressure include expectations from NGOs, consumers, media/press, communities, and societal groups (e.g., environmental organizations) (Saeed & Kersten, 2019; Saeed et al., 2017).

Consumers, public pressure groups, and other community groups show an increasing interest in supporting responsible business practices. There is also a growing demand for transparency regarding how organizations handle sustainability-related issues and opportunities (Saeed & Kersten, 2019).

Rapid improvements in information and communication technology, such as the internet and social media, have also made it increasingly more difficult for organizations to keep the public in the dark about their ethical and moral misconduct (Sajjad et al., 2020). Organizations are also starting to show

15 a considerable amount of interest in blockchain technology, which is characterized as an open-source, decentralized, distributed database for storing transaction information (Francisco & Swanson, 2018).

More widespread use of communication technologies and informational systems such as blockchain technology can therefore help increase transparency and help push organizations to implement SSCM (Kouhizadeh, Saberi, & Sarkis, 2021)

Organizations cannot afford to ignore public pressure groups such as NGOs and green activist groups as they now have the power to reach countless people and seriously damage the organizations’

reputation (Walker et al., 2008). Increasing consumer awareness and their association with societal groups and NGOs have led to a more enlightened society that places greater demand on the organization's reputation regarding sustainable practices (Alzawawi, 2014; Saeed & Kersten, 2019).

Consumers are increasingly influenced by an organization's reputation when making decisions, and society is now demanding more and more environmentally friendly products (Walker et al., 2008).

Additionally, NGOs can also establish partnerships with firms to help them overcome potential barriers (Devaux, Agrell, & Chatelain, 2019).

It is evident from the current literature on SSCM that society is influenced by reputation and constantly increases their expectations from organizations regarding sustainable products and transparency.

Thus, society creates significant pressure for organizations to implement SSCM practices and demonstrate a sense of social responsibility (Alzawawi, 2014; Saeed & Kersten, 2019).

Market pressures

To gain a competitive advantage and develop sustainable technologies, organizations and their supply chains experience pressure from various market factors. Market-related drivers primarily deal with sustainability issues related to organizations' business performance and relationship improvement (Saeed & Kersten, 2019). Drivers expected to influence market pressure include expectations and demands from various stakeholders such as shareholders, customers/consumers, competitors, suppliers, etc. (Saeed & Kersten, 2019; Saeed et al., 2017).

Customers are becoming more aware and knowledgeable about environmental issues, and many expect to be able to buy environmentally friendly products (Shohan et al., 2019). Data shows that about 75% of customers are attracted to a product based on the company’s reputation, and 80% will choose environmentally friendly products when presented with the option. Organizations emphasize the fulfillment of customer demands to achieve customer satisfaction. These expectations from customers will motivate organizations to emphasize sustainability practices to retain and attract customers and present new possibilities to those who can fulfill customer expectations. Hence, increasing customer demand for sustainable products places considerable pressure on organizations

16 to adopt sustainability practices throughout their supply chain (Gualandris & Kalchschmidt, 2014;

Saeed & Kersten, 2019), especially environmental practices (Walker et al., 2008). The expectations placed upon the company by customers depend on company size and market reputation. Highly reputed organizations are generally more conscious of their sustainability approach than less reputed organizations due to higher expectations from customers (Kausar et al., 2017). Moktadir, Ali, et al.

(2018) also found evidence indicating that customer awareness is more influential for large-scale companies.

Smaller companies are also feeling pressure from their customers. However, it has also been demonstrated that being a large retailer has both advantages and disadvantages. Large retailers have the power to influence control over their suppliers, with the disadvantage being that they must also take responsibility for their suppliers’ actions, and they are often more prone to media attention. Non-organizational stakeholders can use this to pressure the retailer to act instead of going through numerous individual suppliers. When looking at the role of purchasing in environmental management, it has been shown that customer demands with a long-term supply chain perspective influence environmental management more positively compared to short-term requests by customers. These demands from customers can be driven by the end-consumers. There is also a trend towards increasingly higher demands or expectations from investors in the development of environmental policies (Walker et al., 2008).

Competition can also act as a direct driver for SSCM (Alzawawi, 2014). This type of pressure from sustainability initiatives undertaken by competitors is often referred to as memetic pressure. When competitors engage in sustainability initiatives, it creates pressure for organizations to adopt sustainable practices to match the competition on sustainability-related performance. The degree of pressure created by competitors can depend on the organization’s size, and small firms generally feel more pressure from competitors (Saeed & Kersten, 2019). Certain sustainability initiatives may not be undertaken due to ethical or moral reasons. Instead, they are initiated since they can lead to competitive advantage and improved financial performance for the organization (Alzawawi, 2014).

Suppliers are considered a minor driver, and they can provide valuable ideas for the implementation of sustainability initiatives but do not usually act as a direct driving force. However, they do play an essential role in implementing sustainability in supply chain systems, as they can make this process more beneficial and efficient, and are crucial for SSCM success (Alzawawi, 2014). Strong relationships and collaboration with supply chain partners can help organizations develop and adopt technologies and practices that are environmentally friendly. Thus, increasing cooperation within supply chain

17 management should be reflected in the organization’s strategy to achieve sustainability-related goals (Thaba, 2017).

The systematic review of the literature done by Saeed and Kersten (2019) revealed that a combination of market pressure and regulatory pressures constitutes the strongest driver for the implementation of sustainability practices, which is also supported by other studies (Alzawawi, 2014; Sajjad et al., 2020). From the literature identified in this chapter we see that regulatory pressure will act as a strong driver of SSCM when approached proactively and top management has the right mindset. Society places higher and higher demands on organizations concerning transparency and reputation and can therefore create significant pressure for organizations to emphasize SSCM. In general, market pressure is portrayed as a strong driver of SSCM practices in the existing literature and is expected to influence the implementation of SSCM positively. Customer and competitor pressure are for the most part described as a strong driver for SSCM, while suppliers play a minor role.

The literature presented in this chapter shows that previous research has identified several factors expected to influence SSCM implementation positively. On the other hand, prior research has also identified numerous factors that deter organizations from adopting SSCM practices and will be addressed in the following sub-chapter.