Sustainability risk management, its determinants and outcome in palm oil mills in Malaysia
Palm oil industry in Malaysia is under greater attention due to the claim of sustainability issues arising from palm oil productions. Sustainability issues, such as gas emissions, solid waste, labour issues, etc., indirectly expose Malaysian palm oil to sustainability risks, such as boycott, repu...
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| Main Author: | |
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| Format: | Thesis |
| Language: | English |
| Published: |
2022
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/114024/1/114024%20%28IR%29.pdf |
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| Summary: | Palm oil industry in Malaysia is under greater attention due to the claim of
sustainability issues arising from palm oil productions. Sustainability issues, such
as gas emissions, solid waste, labour issues, etc., indirectly expose Malaysian
palm oil to sustainability risks, such as boycott, reputational, and regulation risks.
There is now heighten pressure on the industry to adopt a more sustainable
stance towards reducing sustainability issues. Prior studies claimed that
sustainability risk management is regarded as an important tool to address
sustainability risks arising from sustainability issues. Therefore, this study
examines the management of sustainability risks by implementing SRM. This
study also investigates the influence of internal and external determinants on
SRM implementation and its impact on sustainability performance. In total, 407
questionnaires were distributed between July and December 2020, with a
response rate of 28.9%. Data was analysed using Failure Mode Effect Analysis
and Structural Equation Modelling. Findings indicate that sustainability risk is
identified as having a major impact on the palm oil mill operations, occurs
infrequently, and is moderately easy to detect and recognise. Risk control and
risk avoidance are the most risk response strategies employed to address the
sustainability risk. Overall, palm oil mills have placed an adequate system to
monitor the emergence of sustainability risks. The findings unveil that
sustainability strategy, business size, top management support, regulatory
pressure, and competitive pressure have positive and significant relationship on
the SRM implementation. In return, the implementation of SRM has a positive
and significant impact on sustainability performance. The findings indicate that
the relationship between sustainability strategy, business size, top management
support, regulatory pressure and competitive pressure and sustainability
performance is indirectly through SRM implementation. The findings contribute
to current knowledge and provide useful insight to policymakers on SRM
implementation, its determinants, and sustainability performance. |
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