A conceptual framework of environmental sustainability in the oil and gas supply chains: natural resource based view (NRBV) and institutional theory approaches

Purpose: The aim of this paper is to conceptualise a structural model of environmental sustainability for the O&G SC. Following the recommendation of Carters and Rodgers (2008) that a conceptual framework should be underpinned by strong theoretical foundation, we combined the relevant elements of the Institutional theory (Dimmagio and Powell 1983) with the Natural Resource Based View (NRBV) of Hart (1995) to depict the roles of regulatory pressures in driving supply chain innovations and environmental capabilities towards competitiveness of O&G firms. This research proposes structural model and relevant hypothesis to delineate the causal relationships among constructs. Design: This research adopts a theory building approach (Meredith 1983) to develop a conceptual framework of environmental sustainability for the O&G SC. The proposed model is based on a structured literature review which synthesised the extant into four clusters (coercive pressures, resources, strategic environmental capabilities and competitive advantage) that are considered relevant to the objectives of the study within the two theoretical lenses (Institutional theory and NRBV). These clusters were developed into various constructs that made up our model, based on hypothesis developed from the extant literature. Finally, the managerial implications, value and limitations of the study were highlighted. Findings: In line with Liang et al. (2007), we found that regulatory pressure is a critical factor in the O&G firm’s adoption of environmental practices, hence we depict this as the antecedent of resources and environmental capabilities in our proposed model. We also found that environmental capabilities can enhance the competitiveness of O&G firms. Based on the above, an overarching model of environmental sustainability of the O&G supply chain was developed. Value: In the first instance, this paper has contributed to theory building process in the field of GSCM/SSCM by developing a new theoretical model for the O&G SC. Unlike previous models on environmental sustainability in the O&G industry, our study utilised relevant components of existing theories propose a new model of environmental sustainability in the O&G SC. Besides, our model depiction of clean technology as one of the strategic environmental capabilities needed by O&G firms is very novel in the O&G industry considering the global drive towards clean energy and renewables. Academic limitations/ implications: Although the model is purely conceptual at this stage, its development have also contributed to theory-based research in the field of supply chain management. Practical implications: On empirical verification, this work can furnish the supply chain managers with validated measurement scales to evaluate the strengths and weakness in their supply chain innovation and the impacts on environmental capabilities and competitive advantage. It can also assist policy makers in the O&G industry to evaluate the impacts of sustainability policies on firms’ acquisition of strategic resources and capabilities.