Supplier Responses to Carbon Emissions Intensity Gaps: The Influence of Stakeholders on Environmental Sustainability

ABSTRACT There has been interest in improving supplier environmental performance, with past literature examining the influence of buyers and competitors on supplier environmental performance separately. However, examining the role of these two stakeholders in tandem remains underexplored, representing a critical shortcoming as it reflects contemporary competitive dynamics. Additionally, much past literature has used “shared industry” to identify competitors instead of directly identified relationships. Using a panel dataset of directly identified buyer and competitor relationships, this research employs a stakeholder theory perspective to examine how suppliers respond to underperforming (generating more) and overperforming (generating less) buyers and competitors in terms of carbon emissions intensity, an important dimension of environmental performance. The results suggest that suppliers are responsive to underperformance relative to buyers and competitors, but only until their carbon emissions intensity is below that of stakeholder organizations. While the response is stronger for underperformance relative to buyers, competitors still have influence. Similarly, suppliers have worse environmental performance the year after overperforming buyers or competitors, with buyers having a stronger influence. Furthermore, we find market competitiveness plays a moderating role, as suppliers are more responsive in competitive markets. Post hoc analyses extend these examinations using additional sustainability outcomes.