**P1: At the raw material production level, sustainability standards should be included in formal contracts and informal agreements to enable the certification of farming cooperatives.**

After the raw material production and import stage, only transactions of particularly economically important business relationships are coordinated and controlled using contracts. Strategically and financially unimportant business relationships are less frequently governed by contracts to remain flexible and agile when fluctuations in production, raw material prices, or the sales market occur. For example, raw materials can be procured at short notice from other suppliers if there are no contractually binding minimum purchase quantities or rhythms.

Although different types of contracts are discussed in the literature for managing sustainable supply chains (e.g., [47,48]), no contractual regulations on environmental and social aspects are used in the examined supply chain after the raw material production and import stage. Instead, sustainability standards are ensured via certificates. The use of certificates enables spontaneous purchases from different suppliers who have the same certificates. Minimum sustainability requirements of products do not have to be regulated by contracts and checked with the help of audits but are ensured through certifications. We can therefore draw up the following proposition:

**P2: After the raw material production and import stage, companies should mainly use certificates to secure environmental and social sustainability, while contracts should be used to secure economic interests.**

Formal and informal information and knowledge sharing are among the most intensively used GMs in the analyzed supply chain. Information and knowledge are exchanged at every stage of the supply chain and mostly personally through emails and phone calls.

The exchange of information in food supply chains is a common phenomenon to support the operational business, for example, by providing demand data (e.g., [49,50]). The exchange of operational data makes it possible to create greater transparency in the supply chain. The increased transparency allows actors to anticipate, for example, when deliveries will arrive from the upstream stages of the supply chain, which enables a more efficient planning and handling of the receipt, transport, processing and storage of the goods. As a result, capacities (e.g., transport or storage capacity) can be optimized and saved, which increases economic sustainability in the supply chain.

It is remarkable that in the analyzed supply chain, not only are data regarding operational processes exchanged, but also knowledge on sustainability issues is shared specifically by the actors involved in the production of raw materials. The cooperative, and the import company share, for example, their technical and agricultural knowledge with the farms in trainings and on-site visits to enable the certification of the farms. An active and honest exchange of information and knowledge between the farms and the cooperative allows sustainability challenges to be addressed openly. Farmers can receive, for example, training and information on how to use pesticides to prevent crop failure. The training enables the farmers to use the right pesticides in the right quantities in order to not endanger ecological sustainability (e.g., groundwater damage due to excessive pesticide use), but also to increase economic sustainability through good crop yields.

**P3: The exchange of information and knowledge should be specifically used to improve social and environmental sustainability in the raw material production stage, e.g., through training and knowledge exchanges on new cultivation methods.**

A distinction is made between formal and informal information exchanges in the literature. The formal exchange of information and data happens in a professional relationship without personal or social intentions [18]. In the analyzed supply chain, information and data are, for example, exchanged formally to support the operational handling and planning of the business processes.

The informal exchange of information is rather unplanned and mostly happens in personal conversations, e.g., after a meeting [51]. At the stage of the raw material production and import of the examined supply chain, the informal exchange of information

is used, for example, to increase sustainability by informally explaining and supporting more sustainable farming methods. In subsequent stages of the supply chain, information related to sustainability is still exchanged informally, but it does not include advice on implementing sustainability measures. The informal exchange of information rather relates to the future strategic direction of the business relationship. The food retailer informs, for example, the trading company and its other partners informally about new perceived sustainability demands of the end consumers. The trading company can check the implementation possibilities of these new sustainability claims and spread according plans in the supply chain. Currently, for example, customers increasingly call for the implementation of the Fairtrade certificate. Its implementation is now being planned in the entire supply chain which contributes greatly to increasing environmental and social sustainability (e.g., bans on exploitative child labor and hazardous pesticides). Therefore, the following proposition can be made.

**P4: After the raw material production and import stage, informal information exchanges should be used to align strategic interests regarding the implementation of environmental and social sustainability standards.**

Certificates are used on every level of the analyzed supply chain to manage the supply chain's environmental and social standards. The early stages of the supply chain use the EU organic logo to demonstrate environmentally friendly farming practices, pesticide exclusion, and biodiversity to their customers. The downstream organizations use these certificates to be allowed to advertise the product as organic and environmentally friendly. Fair trade and good working conditions are also ensured by certificates, such as the Fairtrade or Fair Choice labels, at several supply chain stages.

In the literature, certificates are mainly seen as a mechanism to support customers in their purchasing decisions (e.g., [52,53]). While interviewees support the use of certificates for such promotional and advertising purposes, they also emphasize a reduced control effort of the required sustainability standards, thanks to the certificates. Most actors in the supply chain refrain from conducting their own audits of partners and rely on external audits by the certificate issuers. The effort required for carrying out their own audits would not be feasible for most companies due to insufficient financial and human capacities (e.g., IP3, IP7, IP8, and IP10). Thus, certificates ensure compliance with the most important social and ecological sustainability standards at no great expense to trading companies, which is why the following proposition can be made.

**P5: Certificates should be used not only to market a product but also to ensure compliance with sustainability standards without having to conduct own audits and monitor supply chain partners.**

All companies maintain formal and informal governed business relationships with their direct upstream and downstream partners in the supply chain. The trading company maintains business relationships not only with its direct partners, but also with all other actors in the supply chain and thus holds an informal leading role in the supply chain. The trading company uses formal and informal GMs to maintain relationships with its most important partners, such as the manufacturing company or the food retailers. In addition, informal mechanisms are used in the relationships with all other partners, especially with the raw material production stage, in order to control and influence compliance with sustainability standards. Through these "non-operational", informal business relationships, the trading company can not only identify possible challenges and disruptions earlier, but also creates additional incentives for compliance with the sustainability standards. Actors who particularly stand out in complying with the sustainability standards could, for example, also be included in the supply chains of other products of the trading company in the future. As a leading company, the retail brand also performs an overarching cohesion function for the supply chain and contributes new product ideas and sustainability goals for the whole supply chain.

Further, the leading role of the trading company will be important in the future to comply with new supply chain due diligence laws. Governments are increasingly obliging companies to make their entire supply chains transparent (e.g., [54]). Trading companies could fulfill this due diligence obligation particularly well due to their central, crosscompany role, as they maintain contacts with all partners and can present their activities transparently. The following proposition can therefore be derived.

**P6: The trading company should hold a leading role in the supply chain in order to coordinate and foster the sustainability efforts holistically and to create additional incentives for increasing sustainability.**

This study provides several novel findings, compared to the existing literature. In particular, we place special emphasis on showing how the governance in food supply chains differs at the various stages of the supply chain to improve sustainability (see Figure 3).

**Figure 3.** Governance mechanisms distinguished based on the different steps of the food supply chain.

At the raw material production and importing stage, sustainability standards are implemented using contracts and are verified through audits. Close contact with regular mutual visits, training on new cultivation methods, and sharing technical, financial, and human resources enable certifications at this stage of the supply chain. In the downstream stages of production, logistics, and retail, sustainability certificates are the most important tool for compliance with social and ecological sustainability standards. Contracts are a less commonly used mechanism at these stages of the supply chain and are only used to coordinate financial and economic aspects of strategically important business relationships. Due to the limited contractual ties and the usage of certificates, the changing of suppliers and service providers is easily achieved without sustainability losses. To additionally set incentives to increase sustainability, it is recommended that a leading company of the supply chain has informal business relationships with all partners in the supply chain. Actors with outstanding sustainability commitments could also be used as partners in other supply chains of the leading company in the future.
