Impact of GSCM Practices on Financial Performance: Special Reference to Manufacturing Companies in Sri Lanka

Abstract

Within the context of Green Supply Chain Management (GSCM), firms are currently considering green supply chain practices as a concern not only for environment performance but also financial performance. Therefore this study aims to investigate the impact of GSCM practices on financial performance relating to manufacturing companies in Sri Lanka. For this purpose structured questionnaire was used to collect data from 25 manufacturing companies listed on Colombo Stock Exchange, Sri Lanka. Data were analyzed using Partial Least Square Structural Equation Modeling method. Green supply chain practices were categorized in to four basic practices as internal environmental management, green purchasing, customer cooperation with environmental considerations and eco design, and investment recovery. Financial performance was measured by using Return on Equity. The results showed that green purchasing and investment recovery significantly influence on financial performance and the other two green supply management practices do not significantly affect financial performance.