Sustainable Supply Chain Management under Climate Risk and Regulatory Pressures

Abstract

Sustainable Supply Chain Management has become a strategic imperative in the context of escalating climate risks and intensifying regulatory pressures. Organizations across industries are increasingly exposed to physical climate disruptions such as floods, heatwaves, and resource scarcity, as well as transition risks arising from carbon pricing, environmental regulations, and disclosure mandates. This study investigates how climate risk and regulatory pressures influence the adoption of Sustainable Supply Chain Management practices and how these practices enhance environmental performance and supply chain resilience. Drawing upon stakeholder theory, institutional theory, and the resource-based view, a conceptual model is developed linking climate risk and regulatory pressures to Sustainable Supply Chain Management practices, which in turn affect environmental performance and supply chain resilience. The study further examines the mediating role of Sustainable Supply Chain Management in these relationships. A quantitative research design was employed using survey data collected from 312 supply chain managers in manufacturing and logistics firms. Structural equation modeling using SmartPLS was applied to assess the measurement and structural models. The results demonstrate that climate risk significantly influences the adoption of Sustainable Supply Chain Management practices, while regulatory pressures exert an even stronger effect. Sustainable Supply Chain Management practices show a positive and significant impact on both environmental performance and supply chain resilience. Mediation analysis confirms that Sustainable Supply Chain Management partially mediates the relationship between climate risk and performance outcomes and fully mediates the effect of regulatory pressures on environmental performance. The findings highlight that firms responding proactively to climate risk and regulatory demands through strategic integration of sustainability into procurement, logistics, and supplier collaboration achieve improved environmental and operational outcomes. This study contributes to the literature by integrating climate risk considerations into Sustainable Supply Chain Management theory and providing empirical evidence from an emerging economy context. The research offers managerial implications for enhancing supply chain adaptability and regulatory compliance while supporting global climate mitigation efforts.