Brewing Sustainability With Carlsberg: Mitigating ESG-Related Supply Chain Risks: Sustainable Farming Strategies for Carlsberg

Abstract

This thesis investigates how Carlsberg can reduce its dependency on agricultural suppliers vulnerable to ESG-related risks by integrating sustainable farming practices and strategic risk mitigation. With rising environmental pressures, Carlsberg faces growing operational risks across its global sourcing areas. This study aims to analyze how Carlsberg can build supply chain resilience through sustainable practices. The research is grounded in the Resource-Based View (Barney, 1991) and Neo-Institutional Economics, drawing on Transaction Cost Economics (Williamson 1985) and Institutions and Institutional Change (North, 1990). Using a qualitative research design, six semi-structured interviews were conducted with key stakeholders, creating a nuanced and non-biased view on the analysis. Findings indicate that Carlsberg prefers a market-based approach to risk mitigation, emphasizing trust-based governance structures, long-term contractual relationships, and shared sustainability standards with suppliers. Rather than owning assets, the company seeks to influence supplier behavior through relational contracting and institutional pressure. Carlsberg leverages unique resources including strong brand equity, long-term sustainability commitments, and organizational reputation, which are critical in securing a sustained competitive advantage and attracting talent in an increasingly ESG-conscious labor market. Furthermore, the interplay between institutions shapes how Carlsberg implements a sustainability strategy. This institutional duality creates constraints and opportunities for Carlsberg to demonstrate leadership in sustainable management. This thesis offers a new perspective by demonstrating how firms can implement sustainability strategies by aligning with institutional pressures and leveraging internal capabilities, rather than relying on vertical integration. It advances the strategic risk management literature by showing how ESG risk exposure in agricultural supply chains can be mitigated through soft governance mechanisms and institutional adaptation. These insights are especially relevant for global companies aiming to align sustainability with long-term strategic resilience and brand value.