Purpose: The purpose of this study is to explore how a multinational company in the automotive industry manages its suppliers in order to increase the environmental sustainability performance of its supply chain. To fulfill this purpose, a research question has been established:

1. How can a manufacturer manage its suppliers in order to increase the environmental sustainability performance of its supply chain?

Method: The thesis is conducted using a qualitative research approach which utilizes the method of a single case study, including multiple interviews. All interviews conducted are semi-structured using an interview guide and ethical considerations. Additionally, the empirical findings were supported by organizational documents.

Findings: The findings discuss five supplier management approaches that are used frequently in order to increase environmental sustainability within the supply chain. The five approaches consist of sourcing, supplier code of conduct (including standards and certificates), assessment, collaboration, and organizational culture. The different approaches are used strategically, starting off with the importance of sourcing capable suppliers from the beginning, where assessing them within relevant areas is vital. Continuously assessing the suppliers in order to keep track of their performance and improvement is useful to make sure that the performance exceeds the basic requirements and identify areas to improve. Collaborating on different aspects is then conducted in order to improve and develop the identified areas. Lastly, organizational culture is proven to have a strong influence on how the environmental sustainability performance within an organization is doing.

Implications: The research did not contribute to any new theories but did, however, increase the overall knowledge of how supplier management is used to increase the environmental sustainability within a supply chain. It showed the strong connection between theory and how it is done in practice, as well as areas in need of implementation in practice. Moreover, the research shows that management approaches should be used holistically and simultaneously in order to reach the best results.

Limitations: The study is a single case study where a limited number of interviews have been conducted. In order to increase the credibility, a multiple-cases study with more interviews could have been conducted.