Sustainable supply chain transformation in an emerging economy: evidence from Ethiopia’s textile and apparel industry

Abstract

The rapid expansion of textile and apparel manufacturing in emerging economies like Ethiopia has increased the need for Sustainable Supply Chain Management (SSCM) practices that balance economic growth with environmental and social responsibility. However, empirical evidence regarding SSCM implementation and its performance implications in emerging manufacturing contexts remains limited. This study reveals a sustainability implementation gap between planning-stage commitments and operational execution in an emerging textile and apparel industry: a case of Ethiopia. A mixed-methods approach integrating survey data from 67 industry professionals and focus group discussions with 12 stakeholders from industry, academia, and government institutions was employed. Using Partial Least Squares Structural Equation Modeling (PLS-SEM) and Confirmatory Composite Analysis (CCA), the findings reveal that sustainability implementation remains fragmented and uneven across firms and sustainability dimensions. Environmental sustainability practices showed the highest implementation level (68%), followed by economic (42%) and social practices (35%), indicating a predominantly compliance-driven approach. A substantial implementation gap was identified, with only 18–25% of local investors, compared with 73% of foreign investors, effectively translating sustainability plans into operational practices. Furthermore, environmental, economic, social, and corporate governance practices significantly influenced sustainability performance (p < 0.05), with environmental practices exhibiting the strongest effect. The study contributes empirical evidence from an emerging economy context and highlights the need to move beyond compliance-oriented initiatives toward integrated sustainability strategies to strengthen industrial competitiveness and sustainable development.