The Impact of Green Supply Chain Management Practices on Green Performance among Manufacturing Companies in Klang Valley

International Postgraduate Conference on Accounting and Finance (IPCAF 2025) 2 May 2025 Kuala Lumpur e-ISBN: 978-967-0760-39-1 Publish Date: 14 October 2025 1 Paper ID: IPCAF202513 DOI: THE IMPACT OF GREEN SUPPLY CHAIN MANAGEMENT PRACTICES ON GREEN PERFORMANCE AMONG Leelawathy Subramaniam1, Hazlina Abd-Kadir 1*, Aza Azlina Md Kassim1, Roshni Anne George2 1 Graduate School of Management, Management and Science University, Selangor 2Department of Accounting, Faculty of Business and Economics, University of Malaya *Corresponding author: hazlina_abdk[email protected]du.my ABSTRACT This study explores how Green Supply Chain Management (GSCM) practices can improve environmental performance among manufacturing firms in the Klang Valley, Malaysia. As sustainability becomes more central to business strategy, the research looks at four key areas: working with eco-conscious suppliers and customers, adopting green manufacturing processes, and making environmentally responsible purchasing decisions. Using a survey distributed to key personnel in these firms, 119 valid responses were collected and analyzed through SPSS software. The results show a clear positive link between all four GSCM practices and better green performance. These findings suggest that when companies collaborate closely with stakeholders and integrate sustainability into daily operations, they’re more likely to achieve meaningful environmental improvements. Beyond contributing to academic knowledge, the study provides practical insights for businesses aiming to meet growing environmental expectations while staying competitive. It encourages firms to see green practices not as a burden, but as a strategic path toward long-term success. Keywords: Green Supply Chain Management, Green Performance, Green Supplier Relationships, Green Purchasing, Sustainable Manufacturing 1. INTRODUCTION In an era where environmental stewardship is increasingly critical, manufacturing companies in Malaysia, particularly those in Klang Valley, are under immense pressure to integrate sustainability into their operations. While Green Supply Chain Management (GSCM) practices have gained global attention for promoting eco-friendly operations, the degree to which they enhance green performance locally remains underexplored. Despite awareness of sustainability's benefits, manufacturing firms often struggle with adopting GSCM due to financial constraints, operational limitations, and lack of expertise. These challenges not International Postgraduate Conference on Accounting and Finance (IPCAF 2025) 2 May 2025 Kuala Lumpur e-ISBN: 978-967-0760-39-1 Publish Date: 14 October 2025 2 only hinder environmental initiatives but also expose firms to regulatory risks and missed market opportunities. This study addresses this gap by investigating how specific GSCM practices—green supplier relationships, green customer relationships, green manufacturing, and green purchasing— impact the green performance of manufacturing firms in Klang Valley. Across industries worldwide, sustainability is no longer just a trend — it has become a core expectation. Businesses are under growing pressure not only to perform financially but also to show real commitment to protecting the environment. For manufacturing companies in Malaysia’s Klang Valley — the country's vibrant economic hub — this challenge is especially urgent. As regulations tighten and customers become more environmentally conscious, companies are realizing that Green Supply Chain Management (GSCM) isn’t just “nice to have” anymore — it’s essential for long-term success. Yet, while many companies acknowledge the importance of going green, turning intention into action isn’t always straightforward. Financial pressures, operational hurdles, and a lack of sustainability know-how often get in the way. For many firms, especially smaller manufacturers, adopting green practices can feel overwhelming or out of reach. As a result, their environmental performance — measured by reductions in waste, emissions, and resource use — often falls short of expectations. This ongoing struggle points to a deeper problem: simply knowing the benefits of sustainability does not guarantee real change on the ground. Although past studies have widely praised the benefits of GSCM — from building stronger brands to unlocking new markets (Carter & Rogers, 2008; Zhu & Sarkis, 2004) — we still don’t have enough detailed understanding of how specific green practices work in specific settings. Particularly in Klang Valley, little research has zoomed in on how different GSCM practices — like green supplier partnerships, green customer engagement, green manufacturing, or green purchasing — actually move the needle on green performance. Without this knowledge, companies risk investing time and resources into initiatives that may not deliver the impact they hope for. This study aims to fill that gap. Focusing on manufacturing companies in Klang Valley, it explores how different GSCM practices influence green performance. By doing so, it offers not just theoretical insights into sustainability through the lens of the Resource-Based View (RBV) but also practical guidance for companies that are serious about making real environmental progress. In short, this research hopes to empower firms — both big and small — to adopt green strategies that are not just good for the planet, but also good for business. 2. LITERATURE REVIEW GSCM practices are rooted in the principle of integrating environmental thinking into supply chain management, covering product design, material sourcing, manufacturing, and end-of-life management (Srivastava, 2007). The Resource-Based View (RBV) theory underpins this study, proposing that firms can achieve a sustainable competitive advantage by utilizing unique, valuable, and inimitable resources (Barney, 1991). Prior research affirms that green supplier collaboration enhances environmental outcomes and operational efficiency (Sarkis et al., 2011). Similarly, maintaining strong green customer relationships fosters brand loyalty and demand for eco-friendly products (Dangelico & Pujari, 2020). Green manufacturing, emphasising the “Six-R” principles—reduce, reuse, recycle, recover, redesign, and remanufacture—significantly improves sustainability performance (Jayal et al., 2010). Green purchasing, meanwhile, ensures that environmentally responsible sourcing practices lead to resource efficiency and regulatory compliance (Min & Galle, 2001). However, localised studies on these practices within the Malaysian manufacturing sector, particularly Klang Valley, are limited, warranting this research. 3. METHODOLOGY A quantitative research design was employed, adopting a positivist approach to objectively measure relationships between variables. Data was collected via structured online questionnaires distributed to manufacturing firms across Klang Valley. Using G*Power analysis, a minimum sample size of 85 was determined, but 119 valid responses were collected, ensuring sufficient statistical power. Variables were measured using established scales from prior studies. Green supplier relationship, green customer relationship, green manufacturing, and green purchasing served as independent International Postgraduate Conference on Accounting and Finance (IPCAF 2025) 2 May 2025 Kuala Lumpur e-ISBN: 978-967-0760-39-1 Publish Date: 14 October 2025 3 variables, while green performance was the dependent variable. Data analysis involved descriptive statistics, correlation analysis, and multiple linear regression using SPSS Version 22 to test the hypothesized relationships. 4. DISCUSSION AND CONCLUSION The findings revealed significant positive relationships between all four GSCM practices and green performance. Green supplier relationships (β = 0.312, p < 0.05) and green manufacturing practices (β = 0.427, p < 0.01) emerged as the strongest predictors, highlighting the importance of collaboration and internal process innovations in driving sustainability outcomes. Green customer relationships and green purchasing also significantly impacted green performance, albeit to a slightly lesser extent. These results affirm the RBV theory, suggesting that firms leveraging environmental capabilities can indeed achieve superior operational and environmental outcomes. From a practical perspective, these insights suggest that manufacturers seeking to improve their sustainability performance must not only focus internally but also nurture their external networks— suppliers and customers alike. Policymakers and industry associations in Malaysia should also provide more support to overcome financial and resource barriers, enabling broader adoption of green supply chain initiatives. 5. ACKNOWLEDGMENT The authors gratefully acknowledge the support and encouragement provided by Management and Science University in facilitating this research. 6. REFERENCES Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108 Jayal, A. D., Badurdeen, F., Dillon, O. W., & Jawahir, I. S. (2010). Sustainable manufacturing: Modeling and optimization challenges at the product, process and system levels. CIRP Journal of Manufacturing Science and Technology, 2(3), 144–152. https://doi.org/10.1016/j.cirpj.2010.03.006 Laura, V. L. (2022). Smart green supply chain management: A configurational approach to enhance green performance through digital transformation. Journal of Cleaner Production, 370, 133348. https://doi.org/10.1016/j.jclepro.2022.133348 Sarkis, J., Zhu, Q., & Lai, K.-H. (2011). An organizational theoretic review of green supply chain management literature. International Journal of Production Economics, 130(1), 1–15. https://doi.org/10.1016/j.ijpe.2010.11.010 Srivastava, S. K. (2007). Green supply‐chain management: A state‐of‐the‐art literature review. International Journal of Management Reviews, 9(1), 53–80. https://doi.org/10.1111/j.14682370.2007.00202.x Zhu, Q., & Sarkis, J. (2004). Relationships between operational practices and performance among early adopters of green supply chain management practices in Chinese manufacturing enterprises. Journal of Operations Management, 22(3), 265–289. https://doi.org/10.1016/j.jom.2004.01.005