The effect of greening the supplier and innovation on environmental performance and competitive advantage

Abstract

Companies in South Africa should realise the important influence of greening their suppliers and innovation to achieve environmental goals and competitive advantages. A questionnaire survey was conducted with 75 companies from 11 industries in Johannesburg. A confirmatory analysis was done followed by structural equation modelling to evaluate the theoretical causal relationships. Correlations between greening the supplier, innovation, environmental performance and competitive advantages were done. The research found that a green innovative process had a significant effect on environmental performance. Green product innovation further had a significant relation to environmental performance and competitive advantage. Green product innovation therefore creates a competitive advantage for a company and simultaneously addresses environmental aspects. The primary result of the study indicated that all the constructs positively related to each other, meaning that greening suppliers by means of green innovation leads to an enhanced environmental performance and competitive advantages.