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Indore (Madhya Pradesh): A new study from the Indian Institute of Management-Indore has found that companies adopting proactive environmental strategies can significantly enhance both their sustainability performance and market competitiveness.
Published in The International Journal of Logistics Management (2025), the study, titled “The Role of Environment Proactivity and Integration for Closed-Loop Supply Chain: A Strategy-Structure-Capabilities-Performance Perspective”, co-authored by Prof Saurabh Kumar explored how forward-looking environmental management practices could strengthen supply chain integration and lead to tangible business gains.
Drawing on survey data from 119 US manufacturing firms, the researchers applied the Strategy-Structure-Capabilities-Performance (SSCP) framework and used structural equation modelling (SEM) to analyze the relationships between environmental proactivity, supply chain integration and performance outcomes.
The findings revealed that environmental proactivity (ENPR) , a company’s willingness to go beyond compliance and adopt green initiatives, had a strong positive impact on internal integration, fostering greater collaboration within organizations.
Furthermore, supplier integration emerged as a critical link between internal coordination and the implementation of Closed-Loop Supply Chains (CLSC), where products and materials were reused, remanufactured or recycled to minimize waste.
Interestingly, while supplier collaboration played a pivotal mediating role, customer integration did not show a significant effect, suggesting that partnerships with suppliers may be more crucial during the early stages of circular supply chain development.
The study also confirmed that CLSC practices contributed positively to both environmental and market performance, proving that sustainability initiatives could enhance profitability rather than hinder it.
The study provides actionable insights for managers, policymakers and sustainability practitioners aiming to transition towards a circular economy. It underscores that achieving circularity requires not just individual firm initiatives, but strong internal and external integration across supply chain partners.
“Firms cannot achieve circularity in isolation,” Kumar said. “Internal collaboration and supplier partnerships form the backbone of an effective closed-loop supply chain,” he added.
By highlighting how proactive environmental management enhances integration and performance, the IIM-Indore study offers a roadmap for organizations seeking to align sustainability goals with strategic and operational outcomes.
Prof Saurabh Kumar said,”Our research demonstrates that proactive environmental strategies don’t just benefit the planet, they also make good business sense. Firms that embed sustainability into their core structures and collaborate closely with suppliers are better positioned to achieve both ecological and competitive success.”
