Decarbonisation and firm financial performance: the roles of supply chain transparency and resilience

The main purpose of this study is to examine how decarbonisation affects a firm's financial performance through sustainable supply chain practices, focusing on the role of supply chain transparency and supply chain resilience. While opinions differ on the relationship between firm's environmental performance, sustainable business practices, and financial performance, empirical research has not yet reached a consensus. In this research, we adopted the institutional theory (INT), transaction cost economics (TCE), and the practice-based view (PBV) to develop our conceptual model and attempt to decipher the relationship. The empirical data was collected from 264 UK manufacturing companies and was analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The findings reveal that decarbonisation efforts positively and significantly influence financial performance. More importantly, the impact of decarbonisation is mediated sequentially through both supply chain transparency and supply chain resilience. The study highlights the dual benefits of integrating decarbonisation strategies with transparent and resilient supply chain practices, which not only support environmental sustainability but also drive financial success in organisations.