Sustainable procurement practices in oil and gas industry: empirical study of internal and external factors

Abstract

The contentious and growing sustainability concerns within the UAE’s oil and gas industries have highlighted the necessity of systematically examining the internal and external organisational factors that influence sustainable procurement (SP) in the industry. This study investigates the internal and external factors most influencing SP in the UAE’s oil and gas industry. Utilising questionnaires, the researcher obtained data from 200 procurement professionals working in five oil and gas companies operating in the UAE. The research framework, developed through an extensive literature review, was analysed and tested using structural equation modelling (SEM). The results reveal that both internal and external factors have a positive and statistically significant impact on sustainable procurement, although internal factors have a relatively greater effect. This study found that leadership in change management, internal management structure, management strategy, and infrastructure cost management, are the most influential internal factors affecting SP, whilst social and economic factors are the most influential external factors. An emphasis on these internal and external factors can help oil and gas companies operating in the UAE greatly improve their level of SP performance. However, the dimensions of internal and external factors affecting SP showed a mixed result. With respect to the dimension of internal factors, Management strategy, Cost of infrastructure, and Project management office had a positive and statistically significant effect on SP. Concerning the dimensions of external factors, Social factors, Economic factors, and Ecological factors had a positive and statistically significant effect on SP.