Drawing from the resource-based view (RBV) and complexity theories, we test the effects of energy management practices on renewable energy supply chain (RESC) initiatives in 151 certified (ISO 14001 and ISO 50001) manufacturing firms in Malaysia. Our results showed three dimensions of energy management practices (EMP) – top management commitment, energy awareness, and energy auditing – which were positively associated with the development of RESC initiatives. We found that insufficient knowledge of energy efficiency means firms struggle to manage energy effectively, constraining opportunities such as converting waste into energy to support business’ targets. Our work has implications for energy policy. For example, we suggest that the transfer of energy efficiency management knowledge and technology from multinational to local companies could help to improve energy usage, and that local companies could generate renewable energy through supply chain networks. The findings of this work shed light on how to further develop energy efficiency policy in emerging economies, with implications for academics, practitioners and decision-makers. This work makes the case for an integrated discussion of energy management and renewable energy supply chains.
Drawing on the resource-based view (RBV) and complexity theories, in this work we test the effect of energy management practices on renewable energy supply chain (RESC) activities in the Malaysian manufacturing sector. The manufacturing industry is responsible for approximately 36% of global CO2 emissions and consumes nearly 50% of the global energy supply (Rahman et al., 2016). Based on statistics from the Asian Pacific Energy Center (APEC), CO2 emissions from energy consumption in Malaysia are anticipated to grow by around 4.2% annually, reaching 414 million tonnes of CO2 in 2030 (Hosseini et al., 2013). Developing countries such as Malaysia have focused on industrialisation to achieve higher economic growth (Li and Wei, 2015), and this industrial sector is currently searching extensively for ways to reduce energy consumption. Despite a plethora of campaigns and policies directed towards energy efficiency and renewable energy (RE), Malaysia has so far had limited success in achieving energy efficiency; challenges and opportunities remain and need to be fully understood (Yatim et al., 2016; Hosseini et al., 2013). A number of studies have shown the fragility of energy efficiency adoption in the manufacturing sector due to a lack of employees with adequate knowledge and training for energy efficiency (Prindle, 2010; Turesky and Connell, 2010), an absence of awareness of energy consumption patterns (Shrouf and Miragliotta, 2015), structural uncertainty and the risk of impacting on the quality of products (Lunt and Levers, 2011), energy efficiency not being a priority due to a lack of management commitment (Turesky and Connell, 2010; Lunt et al., 2014), and hesitation on investment due to limited financial resources and delayed payoffs (Eichhammer, 2004; Rohdin et al., 2007). The advantages of practicing energy management have been well studied in developed countries such as Sweden (Brunke et al., 2014; Backlund et al., 2012a, 2012b), America (Moran et al., 2005), Finland (Sivill et al., 2013) and Germany (Kannan and Boie, 2003). Nevertheless, developing countries tend to face financial constraints (Painulyet al., 2003) and a lack of accessible information (Lunt et al., 2014) when pursuing energy efficiency (Painuly et al., 2003). Existing literature on energy efficiency has emphasized environmental management, carbon management (Mohanty, 2012), and barriers to energy management, such as high initial costs, knowledge of energy conservation, among others. (Brunke et al., 2014). There is still a lack of empirical studies testing the effects of energy management practices on RESC in manufacturing industries in emerging economies such as Malaysia. RE is part of the driving force to enhance energy efficiency, protect natural resources and improve quality of life (Wee et al., 2012). Similar to other supply chains, RESC includes elements such as physical information and financial flows (Cucchiella and D’Adamo, 2013).