The relationship between sustainability and compliance in a procurement context

Abstract

Regulatory compliance plays a key role in influencing organisations to engage in responsible business practices that contribute towards driving objectives around social, economic and environmental considerations. At a national level, governments around the world use regulation as a policy lever to drive imperatives that promote socio-economic and environmental objectives. Procurement, therefore, plays a significant role in ensuring that the contribution towards sustainability objectives is achieved and accelerated. This study set out to understand the impact of regulatory compliance on the adoption of sustainable procurement practices by organisations, whist assessing whether leaders are able to balance compliance and the interests of various stakeholders in procurement decision making processes. Confirmatory factor analysis and structural equation modeling were the main statistical techniques that were used to quantitatively test primary data that was collected from 247 procurement and sustainability managers within the public and the private sector. Relationships were observed between regulatory compliance, leadership and decision making towards adoption of sustainability objectives by organisations. It was observed that leaders are able to consider and translate stakeholder views into compliant decisions. Finally, the results have showed that there is strong relationship between regulatory compliance and sustainability, highlighting the contribution of procurement compliance towards driving sustainable development.