Green Procurement Practices And Supply Chain Performance Of Companies Listed At The Nairobi Securities Exchange

Abstract

Environmental awareness has gained global prominence in tandem with the escalating challenges emerging from the environment that impacts the way of life (Wang, 2009). Now, more than ever, the world population is aware of the negative effects caused by environmental degradation. Key environmental concerns are dumping of hazardous wastes, the depletion of the ozone layer, and global warming. This study purposed to establish the green procurement practices and supply chain performance of companies listed at the Nairobi Securities Exchange (NSE). It was based on the following objectives: To determine the extent to which green procurement is practiced by companies listed at the NSE, to determine the relationship between green procurement practices and supply chain performance, and to establish factors that affect the implementation of green procurement practices. To meet the research objectives, the study targeted the entire population of 64 respondents from which 47 completed and returned the questionnaires thus a response rate of 73.4%. The target respondents were the Procurement/Supply Chain managers or their equivalents of each listed company. The study used primary data. Data was collected through a self-administered questionnaire that had both open and closed ended questions, designed to obtain definite responses. Statistical Package for the Social Sciences (SPSS) was used to analyze the data and presented the specific issues through coding and summarizing the responses of all the respondents. Regression analysis was also performed in establishing the relationship between green procurement practices and supply chain performance of companies listed at the Nairobi Securities Exchange. The findings indicates that adoption of green procurement practices improves the supply chain performance. The improved performance is reflected through improved customer service, minimized ordering costs, and reduced inventory stock. This shows that green procurement is a well customized process to suit the organization’s changing needs as companies had very well defined green procurement strategies. Implementation of green procurement helps organization achieve a competitive advantage however, emphasis should also be in addressing the challenges arising from a dynamic business environment such as lack of employee training and motivation, limited resources, absence of support from the organization leadership and opposition to change by suppliers. The researcher therefore recommends that the management teams of listed companies at the NSE need to embrace green procurement initiatives to help them appreciate the direct impact on supply chain performance. These initiatives should be integrated in the wider organization strategy to achieve the company’s goal. The limitation of the study is that it focused on companies listed at the NSE therefore, the results might not be conclusive for companies not listed at the NSE. More research can be undertaken on factors affecting implementation of green procurement of companies listed at the NSE. The study proposes that comparable studies should be done in other areas of the Kenyan economy.