The Extent of Incentivization for Sustainable Business Collaborations: An Empirical Investigation of the Logistics Sector

Integrating sustainable practices into supply chain systems is crucial for improving efficiency within organizations. This is particularly true for countries striving for the 2030 sustainability goals. Business collaborations are instrumental for encouraging the adoption of sustainable practices while fostering new ideas. This study answers the question: To what extent are sustainable supply chain practices promoted among logistics firms in Azerbaijan, and what role do collaborative initiatives play in their implementation? The objective is to examine the contribution of cooperative practices to the integration of sustainable practices within organizations and identify the gap in the literature by providing evidence for small and medium-sized logistics companies. An empirical survey from logistics SMEs in Azerbaijan, particularly associates of AGTL, complemented the literature review. The survey focused on supply chain and partnership managers. Various statistical methods for pattern recognition, relationships, and perception studies of the effects of incentives on collaborative work were performed. Through stakeholder pressure, operational integration, and incentives (such as financial green bonds and market opportunities), the logistics industry has strengthened the role of incentivization in building sustainable business partnerships. The study suggests that SMEs’ structural limitations (e.g. inadequate resources, low awareness of sustainability frameworks) are the most important obstacle to the effectiveness of incentives, which are a principal factor in increasing collaborative partnerships. Overall, incentivization is fundamental for the development of sustainable collaboration across the business logistics ecosystem.