Examining the Interconnections Between Sustainable Logistics Practices, Environmental Reputation and Financial Performance: A Mediation Approach

Abstract

As environmental awareness and the patronage of logistics services grow, there is a growing demand for the logistics sector to provide more sustainable environmental services, and although the logistics sector performs functions such as reverse logistics, packaging, inventory management, transportation, warehousing, waste management, distribution, etc., which are very core to economic growth, they also significantly contribute to greenhouse effect and consume huge amounts of resources. This study, drawing on the institutional theory and the natural resource-based view, explores the framework through which sustainable logistics practices such as sustainable transportation, reverse logistics and management of waste, sustainable packaging and distribution, green monitoring and evaluation, and sustainable information sharing influence environmental reputation and financial performance. The study adopted partial least square structural equation modelling technique in analysing data due to it having more statistical power. The findings of the study showed that sustainable logistics practices had enormous influence on environmental reputation and financial performance. In terms of mediation, environmental reputation had no mediation effect between waste management and financial performance but partially mediated the relationships between sustainable transportation, sustainable information sharing and financial performance, while fully mediating the relationships between reverse logistics, sustainable packaging and distribution, green monitoring and evaluation, and financial performance. This study concentrated on the logistics sector; thus, this study results will provide vital data to both scholars and practitioners in comprehending the call and need to integrate sustainable policies and strategies into business and industrial operations to ensure environmental preservation.