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Stakeholders such as customers, governments and environmental organisations are more concerned than ever about the impact of supply chain practices on the environment, leading firms to introduce environmental requirements into their supply contracts. While the extant literature on supply chains acknowledges this trend, it fails to inform comprehensively on the concept of “stringent environmental requirement” and its consequences. The purpose of this paper is to investigate this concept and explore how such requirements may translate into supplier environmental performance.

Qualitative methodology was adopted by the study and data were collected through conducting eight case studies in the Bangladesh ready-made garment (RMG) industry.

A number of factors were found to be influencing suppliers’ perception of stringency, such as uncertainty relating to the newness and deadline of buyers’ environmental requirements, the complexity of implementing the requirements, and the use of buyer-specific frameworks. The research also shows that suppliers’ efforts in building environmental capability play a vital role in dealing with stringent environmental requirements.

The case studies are limited to the Bangladesh RMG industry. Given that environmental regulations vary across different countries and industries, the data may not reflect all the possible variations in stringent environmental requirements.

The new insight proposed by this research can guide firms to further understand how supplier environmental performance and the sustainability of their supply chain can be achieved. The research provides broad insight into how suppliers can address stringent environmental requirements and improve their environmental performance.

This research establishes evidence for the relatively new phenomenon of “stringent environmental requirements”, and develops a theoretical framework to demonstrate the relationships among the critical determinants relevant to this phenomenon.