Sustainable practices and firm competitiveness: an empirical analysis of the Saudi Arabian energy sector

Abstract

AbstractIn pursuit of reducing dependence on oil, the Kingdom of Saudi Arabia has made significant efforts to advance sustainability under the strategic framework known as Saudi Vision. This initiative encompasses a range of activities aimed at promoting sustainability within the energy sector. This paper aims to analyze the existing sustainable practices of companies, employees, and the broader community in the supply chain. The objective is to evaluate current progress toward the sustainability goals of the Kingdom and assess the competitiveness of firms in the energy sector based on the effectiveness of sustainability management in their supply chain. Based on data collected from Saudi energy companies, structural equation modeling (SEM) techniques are utilized to investigate sustainable supply chain management (SSCM) practices and their influence on CP in Saudi Arabian energy companies. This study examines the influence of several practices on competitiveness (CP), including environmental practices (EMPs), social practices for employees (SPEs), social practices for the community (SPCs), operational practices (OPs), and supply chain integration practices (SCIs). The study incorporates five distinct independent variables, namely, EMP, SPE, SPC, OP, and SCI, where the dependent variable under investigation is denoted as CP. The findings from the SEM analysis show that three variables—SPE, SPC, and OP—demonstrate statistical significance, while EMP and SCI do not. These findings enhance the continuing academic discussion about balancing economic growth and environmental preservation through sustainable practices in the energy sector.