Logistics social responsibility: Standard adoption and practices in Italian companies

Abstract

This paper deals with Logistics Social Responsibility (LSR), i.e. the socially responsible management of the supply chain under a cross-functional perspective. In particular, the goal of the paper is to develop a taxonomy of the LSR practices adopted by firms. The taxonomy is built based on a literature review and an empirical analysis. In particular, the empirical analysis deals with the analysis of the non-financial reports (i.e. social, environmental, sustainability report, environmental statement, and/or SA8000 report) published by a sample of Italian companies.

The taxonomy involves 47 different LSR practices classified based on five areas, namely Purchasing Social Responsibility, Sustainable Transportation, Sustainable Packaging, Sustainable Warehousing, and Reverse Logistics. The practices are further investigated to assess which and to what extent they are adopted by different categories of companies. To this aim, we use an ad hoc-defined metric, the Adoption Index, and carry out a cross-analysis. By providing an encompassing view of all the LSR issues and practices, our paper represents an initial attempt to fill a gap in the literature on LSR.

Introduction

The theme of Corporate Social Responsibility (CSR) has a long history. In 1953, Bowen claimed that companies have the obligation to “pursue those policies, to make those decisions, or to follow those lines of action that are desirable in terms of the objectives and values of our society” (Bowen, 1953, p. 6). Davis (1973, p. 312) defined CSR as “the firm's consideration of, and response to, issues beyond the narrow economic, technical, and legal requirements of the firm”. According to Carroll (1979, p. 500), CSR encompasses “the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time”. In the 1980s, the stakeholder theory acquired a strong relevance in the academic world; stakeholders are “those groups who can affect and/or are affected by the achievement of an organization's purpose” (Freeman, 1984, p. 49). The concept of stakeholder personalizes social responsibilities by delineating the specific groups or persons that should be considered when adopting a CSR orientation (Carroll, 1991).

At the end of the 1980s, the expression sustainable development was introduced to mean the economic, social, and environmental issues to take into account to foster permanent development in the world (World Commission on Environment and Development, 1987). During the 1990s, a link between the concepts of CSR and sustainable development began to be established (DesJardins, 1998). Keijzers (2002) has observed that the notions of CSR and corporate sustainability have followed separate evolution paths and only recently have grown into convergence. In the past, the theme of sustainability was referred only to environmental issues whereas CSR to social aspects, such as human rights (e.g. Robinson, 2004). Nowadays, many scholars consider corporate sustainability and CSR as synonyms (Lehtonen, 2004). Moreover, an extensive part of the CSR literature deals with environmental problems and issues (see for example Preston, 1985; Frederick, 1986; Hoffman et al., 1990; Sethi and Steidelmeir, 1991). However, according to van Marrewijk (2003), a small but essential distinction should still be considered among the two themes: CSR relates to phenomena such as stakeholder dialogue and sustainability reporting, whereas corporate sustainability focuses on value creation and environmental management.

In the paper, we adopt the definition of CSR provided by the European Union (EU) Green Paper (Commission of the European Communities, 2001, p. 6), namely “the integration by companies of social and environmental concerns in their business operations and in their interaction with stakeholders on a voluntary basis”. Based on that definition and the above considerations, in our paper the term social and, in general, the expression social responsibility is used to refer to the social, environmental and economic attitudes, behaviors and practices adopted by firms.

In the last years, the importance of CSR has rapidly increased (Beda and Bodo, 2004). One of the motivations is the change in consumers’ attitudes. Research shows that many consumers prefer to purchase products from and invest in shares of those companies that care for the environment and maintain good citizenship behavior (Gildia, 1995; Maignan, 2001; Bhattacharya and Sen, 2004). Hence, for socially responsible firms one of the most relevant benefits is the enhancement of corporate image and the possibility to gain a focused and/or differentiated competitive advantage (Miles and Munilla, 2004).

Companies can adopt CSR practices in several fields: since total logistics costs account for over 50% of the industrial added value (McCann, 1996), investigating the impact of CSR on logistics management is a relevant issue.

In this paper, we investigate the theme of Logistics Social Responsibility (LSR), i.e. the socially responsible management of the supply chain (SC) under a cross-functional perspective (Carter and Jennings, 2000). In particular, the goal of the paper is to develop a taxonomy of the LSR practices adopted by firms. The taxonomy is built based on a literature review and an empirical analysis. The literature review is carried out so as to identify the main research streams and LSR practices. The empirical analysis, which dealt with the analysis of the environmental statements and/or social, environmental, sustainability, and/or SA8000 reports (such reports hereafter are briefly defined as non-financial reports) published by a sample of Italian companies, is carried out so as to identify the LSR practices really adopted by firms. The taxonomy involves 47 different LSR practices classified based on five areas, namely Purchasing Social Responsibility, Sustainable Transportation, Sustainable Packaging, Sustainable Warehousing, and Reverse Logistics. The practices are further investigated to assess which and to what extent they are adopted by different categories of companies. To this aim, we use an ad hoc-defined metric, the adoption index (AI), and carry out a cross-analysis. By such analyses, we are able to identify the categories of firms that ‘play best’ in reporting LSR practices (such categories could be used as a reference for managers) and the trends in reporting LSR practices.

The literature on LSR is recent and not wide (Carter and Jennings, 2000, Carter and Jennings, 2002a; Murphy and Poist, 2002). Moreover, most of the existing studies examine specific LSR aspects (e.g. purchasing or transportation). By providing an encompassing view of all the LSR issues and practices, this paper represents an initial attempt to fill a gap in the literature. We also provide the results of a study in the field aimed to identify the practices really adopted by firms. The description of the most adopted LSR practices can be useful to firms, in particular to small and medium-sized enterprises (SMEs), that are interested in LSR but have no sufficient resources to study LSR and the practices to be implemented.

The paper is organized as follows. Section 2 reviews the relevant literature on LSR. Section 3 discusses the research design and the activities carried out. Section 4 describes the taxonomy of the LSR practices. The practice adoption is further examined in Section 5. Finally, Section 6 draws some conclusions and provides some insights for future research.