Under increased pressure for supply chain transparency, suppliers are making different choices in terms of publicly disclosing their environmental, social, and governance (ESG) practices and performance.
Assistant Professor Jury Gualandris examined this effect through an extensive mapping of global supply chains, in research presented in November at the Institute for Operations Research and the Management Sciences Annual Conference. The analysis identifies ESG disclosure patterns across 189 supply chains, involving 3,114 suppliers and 20,504 supply relationships.
Gualandris and his co-authors, Annachira Longoni (ESADE Business School) and Davide Luzzini (EADA Business School), found that when suppliers in the chain operate in close clusters (for example, in the electronics industries), they experience competitive tensions that limit ESG disclosure. Co-opetition’ within and between clusters increases the threats of competence spill-overs and competitors’ imitation, limiting suppliers’ willingness to share with the public relevant information about ESG practices and performance. Similarly, it is more difficult to develop shared norms and expectations around ESG disclosure in supply chains that comprise firms from different industrial sectors. Insights from his analysis reveal how to structure and regulate complex multi-tier supply chains to support transparency.