Sustainable Initiatives and Due Diligence in the EU Supply Chain

Table of Contents

1. INTRODUCTION

1.1 SUSTAINABILITY IN THE LEGAL ENVIRONMENT

1.2 SUSTAINABILITY AND SUPPLY CHAIN MANAGEMENT

1.3 STUDY SCOPE

2. STUDY CONTEXT

2.1 HISTORY OF SUSTAINABLE DEVELOPMENT AND DUE DILIGENCE

2.1.1 A Brief History of International Sustainable Development

2.1.2 History of Due Diligence

2.2 REGULATORY REVIEW OF DUE DILIGENCE

2.2.1 Voluntary Due Diligence Reporting

2.3 DUE DILIGENCE TRENDS AND UPCOMING LEGISLATION

2.4 DUE DILIGENCE REPORTING AT THE NATIONAL LEVEL IN EU MEMBER STATES

3. LITERATURE REVIEW AND THEORETICAL BASIS

3.1 SOCIO-ECOLOGICAL SYSTEMS

3.1.1 Panarchy Theory and Adaptive Cycles

3.1.2 What is Resilience? The difference between Ecological and Socio-Ecological Systems

3.2 ADAPTIVE AND TRANSFORMATIVE GOVERNANCE OF SYSTEMS

3.3 THE INDUSTRY STRUCTURE VIEW, RESOURCE-BASED VIEW, AND RELATIONAL VIEW OF THE FIRM

3.4 AN ANALYSIS OF SUSTAINABILITY AND ITS EFFECT ON FIRM PERFORMANCE

3.4.1 Sustainability in the Research Environment

3.4.2 Effects of Sustainability on firm performance

3.5. SUSTAINABILITY REPORTING

3.5.1 CSR Reporting and Due Diligence

3.5.2 Greenwashing

3.6 SUSTAINABLE PROCUREMENT

4. PROBLEM ANALYSIS

5. RESEARCH METHODOLOGY

5.1 METHODOLOGICAL APPROACH

5.1.1 Primary data collection

5.1.2 Triangular approach

5.1.3 Qualitative Semi-structured Interviews

5.1.4 Quantitative Survey

5.1.5 Ethical issues in research – anonymity and privacy

5.2 METHODS OF DATA COLLECTION AND TARGET GROUP

5.3 METHODS OF ANALYSIS

5.3.1 Qualitative: Thematic analysis

5.3.2 Quantitative: Descriptive statistics

5.3.3 Content and keyword analysis

5.3.4 Case selection

5.3.5 Designing propositions

6. RESULTS

6.1 COMMON INTERVIEW THEMES

6.1.1 Global Concerns: Margins, Logistics, and Asia

6.1.2 Supplier Relationships: Upgrading, Visibility, and Leverage

6.1.3 Information Exchange

6.1.4 A message to the Legal Environment

6.2 SURVEY RESULTS

6.3. MINI-CASES

7. DISCUSSION

7.1 SCM AND SUSTAINABILITY PATTERNS (RESEARCH PROPOSITIONS)

7.1.1 Leverage

7.1.2 Information Exchange

7.1.3 Visibility

7.1.4 Supplier Relationships and Upgrading

7.1.5 Summary of Propositions and Findings

7.2 SUSTAINABLE SCM WITH AN EYE TOWARDS THE FUTURE

7.2.1 A message to the legal environment

7.2.2 Sustainable procurement and supply chain management: application and benefits

8. CONCLUSION AND RECOMMENDATIONS FOR FUTURE RESEARCH IN THE FIELD

Research Objectives and Themes

The research investigates how firms manage sustainability initiatives within their supply chains amidst evolving EU due diligence regulations, aiming to develop propositions that guide managers in implementing these requirements effectively.

• The impact of shifting legal requirements (EU MHRDD) on supply chain operations.
• Core interlinked themes: leverage, information exchange, visibility, and supplier upgrading.
• Challenges associated with monitoring lower-tiered suppliers and managing audit-fatigue.
• The integration of sustainability into procurement strategies and its correlation with firm performance.

Excerpt from the Book

Summary of Chapters

1. INTRODUCTION: Outlines the growth of global supply chains and the rise of negative externalities, establishing the need for mandatory due diligence and systems thinking.

2. STUDY CONTEXT: Reviews the history of sustainable development and due diligence, analyzing the regulatory landscape within the EU and individual member states.

3. LITERATURE REVIEW AND THEORETICAL BASIS: Examines theories on socio-ecological systems, resilience, strategic management views of the firm, and sustainability's impact on firm performance.

4. PROBLEM ANALYSIS: Defines the research objectives, focusing on how companies adapt their due diligence activities to comply with emerging sustainability legislation.

5. RESEARCH METHODOLOGY: Details the triangular approach using semi-structured interviews and quantitative surveys to investigate firm initiatives in supply chains.

6. RESULTS: Presents field findings, highlighting themes such as global concerns, supplier relationships, information exchange, and feedback for the legal environment.

7. DISCUSSION: Synthesizes research findings into distinct propositions based on leverage, information exchange, visibility, and supplier upgrading to guide business managers.

8. CONCLUSION AND RECOMMENDATIONS FOR FUTURE RESEARCH IN THE FIELD: Provides final reflections and suggests directions for future research, emphasizing the need for larger-scale and cross-industry studies.

Keywords

Due Diligence, Sustainable Supply Chain Management, Corporate Social Responsibility, CSR, MHRDD, Global Value Chains, Supplier Upgrading, Transparency, Greenwashing, Resilience, Socio-Ecological Systems, Stakeholder Management, Regulatory Compliance.

Frequently Asked Questions

What is the core focus of this Master's Thesis?

The research explores the impact of increasing EU-mandated sustainability and due diligence requirements on global supply chains, investigating how firms identify, integrate, and manage these responsibilities.

What are the primary themes discussed in the study?

The study centers onfour interlinked themes: leveraging supplier relationships, effective information exchange, increasing supply chain visibility, and strategic supplier upgrading.

What is the primary goal of the research?

The thesis aims to provide an overview of current and upcoming regulations related to due diligence and to determine how firms can effectively manage the resulting challenges in their value chains.

How was the research data collected and analyzed?

The researchers utilized a triangular methodology, combining quantitative data from 102 survey responses with qualitative insights gathered from 30 semi-structured virtual interviews.

What topics does the main body address?

The main sections cover the history of due diligence, theoretical frameworks like panarchy and relational view, legislative trends, and empirical results regarding how companies are reacting to new sustainability pressures.

Which keywords best describe the paper?

Key terms include Corporate Social Responsibility (CSR), Due Diligence, Supply Chain Management, Greenwashing, Value Chains, and Regulatory Compliance.

How do market dynamics influence a firm's leverage within its supply chain?

The research concludes that market shocks, such as pandemics or logistics crises, can dramatically shift bargaining power, often forcing lead firms to rely on trust and existing partnerships rather than strict contractual enforcement.

Why is "visibility beyond Tier 1" considered a major challenge?

The study highlights that most companies lack transparency regarding their sub-suppliers, making it difficult to audit and manage social or environmental risks that occur deep within the global value chain.

What role do memberships and associations play for firms?

Memberships, associations, and certifications serve as critical tools for SMEs and large companies alike to share information, mitigate knowledge deficiencies, and standardize sustainability metrics across fragmented industries.