Epsilon Archive for Student Projects

Abstract

Climate change is an ongoing global issue that has severe effects on health, economy and nature. Climate change is mainly caused by human-induced GHG emissions. Companies have a fundamental role in transforming natural resources into items and services that enable the level and quality of life in today’s society (Benn et al., 2014). Therefore, companies are the fundamental part of the problem, and they have a vital role in finding the solution (Boiral et al., 2012). The potential competitive advantage that companies can gain by implementing corporate social responsibility (CSR) has changed the question from whether to how companies can integrate sustainability into their practices (Wu & Pagell, 2011). Thus, companies are now facing the need to assess and evaluate the most material actions to be employed. Research has revealed that a substantial part of companies’ climate impact comes from scope 3 emissions (Downie & Stubbs, 2013). Scope 3 emissions are generated in companies’ supply chains, outside of companies’ operations and direct control. Therefore, companies are forced to rethink their climate strategies and to widen their consideration to include scope 3 emissions. Recently, the procurement function has been recognized to be essential for the overall sustainability of the material flows entering a company (Porter & Van der Linde, 1995; Schneider & Wallenburg, 2012). As most of scope 3 emissions are generated through non-product related (NPR) procurement activities, this study focuses on the procurement of less strategic items and services.
The aim of this study is to investigate the complexity and challenges in the implementation of low carbon procurement (LCP) in the context of NPR procurement. The aim is expected to be achieved by exploring the influence of external and internal factors for the implementation of the procurement process. Another means to achieve the aim is to study what category managers perceive as challenges in the implementation of low carbon NPR procurement. How to implement low carbon initiative by employing the change management model is also analyzed in this study. A qualitative single case study design with three research units is employed. The selected case company, Novo Nordisk A/S, is a well-known pharmaceutical company with a pro-active environmental profile. The company has identified that a significant climate impact comes from the company’s supply chain (Novo Nordisk, 2014), and the company has challenged itself to reduce its overall climate impact through NPR procurement activities. The empirical data in this study was acquired by using a two-step approach, implemented through semi-structured interviews and validated by triangulation with documented materials. The findings of this study were analyzed using a conceptual framework that was developed based on the literature review that was conducted for this study. The conceptual framework consists of internal and external factors (drivers/barriers) for the implementation of LCP and an illustration of the integration of CM into NPR procurement processes. Finally, two change models were combined and used for further analysis of the topic and shed light for the challenges.
The findings in this study show that external and internal factors may have a different influence in each of the categories studied, and factors can mirror to same aspects. The key challenges can be divided into three interrelated dimensions: the lack of top management interest, methodological difficulties, and regional differences in capacity, motivation and resources. The challenges perceived were quite similar in each category. Finally, using change management models, the steps to overcome the key obstacles in the implementation process were identified to be creating a strong coalition to drive the change mandated by top management and anchored in affiliates, designing integrated climate strategies with clear targets and strong communication and stakeholder collaboration.