Implementing Triple Bottom Line Sustainability into Global Supply Chains

Lydia Bals, Wendy Tate, Lydia Bals, Wendy Tate

• Editorial: Routledge
• Año: 2017
• ISBN:
  9781351285100
• Edición: 1
• Categoría: Negocios y empresa
• Categoría: Negocios en general

The global sustainability challenge is urgent, tremendous and increasing. From an ecological perspective, the current worldwide resource footprint requires approximately 1.5 planets to sustain existing life, and with current usage would require two planets by 2030. The social impact of ever-growing resource use disproportionately affects the world's poor – the 3 billion people living on less than $2.50 a day, as they struggle to acquire what is needed to survive. The serious ecological and social challenges we face in trying to establish global sustainable supply chains must not be underestimated, yet so far research has largely ignored the social dimension in favour of the environmental and economic.

So how can we develop business strategies that move away from a primary economic focus and give equal weight to people, planet and profit? How can we create sustainable supply chains that take a true triple-bottom-line approach?Implementing Triple Bottom Line Sustainability into Global Supply Chains features innovative research, highlighting new cases, approaches and concepts in how to successfully implement sustainability – covering economic, ecological and social dimensions – into global supply chains. The four parts cover the rationale for sustainable global supply chains, key enablers, case studies showing clear implementation steps, and directions for future research and development.This book is a must-read for any academic researching in sustainable supply chain management, procurement or business strategy, and for business leaders seeking cases that will inform a critical step forward for CSR programmes.

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The journey from triple bottom line (TBL) sustainable supply chains to TBL shared value chain design¹

Lydia Bals

University of Applied Sciences Mainz, Germany; Copenhagen Business School, Denmark

Wendy L. Tate

University of Tennessee, USA

While sustainable supply chain management (SSCM) research has become significantly more relevant and rigorous, there is still much to be learned about how to truly implement triple bottom line (TBL; economic, environmental and social) sustainability into global supply chains. Most of the research to date focuses on some, but not all, of these three dimensions. This book is a compilation of work that addresses various aspects of the TBL. This introductory chapter provides an overview on the different chapters contained within the four sections of the book, but also proposes future research suggestions to stimulate research in this field. It closes with an outlook on how TBL sustainable supply chain design might evolve to TBL shared value chain design.

1.1 Introduction: expanding the sustainability scope

The call to think and act differently in sustainable supply chain management (SSCM) is becoming increasingly louder. In the Journal of Supply Chain Management 50th anniversary issue, Pagell and Shevchenko (2014, p. 44f.) spelled out a clear need for future research into the issues of “how to create truly sustainable supply chains” and “what new practices and processes are needed to create truly sustainable supply chains”.

In response to this, the idea behind this edited collection was to introduce innovative cases, approaches and concepts that show how to successfully implement all three dimensions of triple bottom line (TBL) sustainability into supply chains. It particularly targeted chapters that take a true TBL (economic, environmental and social; Elkington, 1998) perspective and/or offer specific insights into implementation of different aspects of the TBL, for example by incorporating innovative case studies. There is recognition that research has mostly focused on the environmental and economic dimension of the TBL, but the social dimension is still relatively under-researched (Seuring and Müller, 2008). Therefore, papers that include the social dimension were of particular interest for this collection. Noting that this interface of environmental, economic and social aspects in supply chain management is not yet well covered, it also sought to address the call for further research concerning the base of the pyramid (BoP) business models that address the sustainability needs of the global poor (e.g. Karnani, 2007; Hahn, 2009).

Another target of the call for contributions was to learn more regarding the role of social entrepreneurs in transforming supply chains according to TBL criteria, e.g. by establishing social businesses that are economically and environmentally sustainable. From these businesses’ inception, the entrepreneur is focused on building sustainability into their supply chain or supply network. The goal of these types of entrepreneur is to convince social investors of the return on investment in all three pillars. This allows them to creatively consider the business model upfront and establish sustainable and innovative business models. For sustainable business models we follow the definition of Boons and Lüdeke-Freund (2013), where the firm creates value through balancing economic, ecological and social elements, by promoting equitable relationships among the stakeholders and adopting a fair revenue model. Linking such models to SCM, as stated by Seuring and Gold (2013, p. 5), “could help us to address aspects that are so far weakly developed, such as the social dimension of sustainability management”.

Concerning the actual implementation, additional insights into how (social) businesses can successfully build TBL effective business models was solicited, as these will be playing an increasing role in global business. It is estimated that by 2020 about US$500 billion will be allocated to impact investing initiatives (World Economic Forum, 2013). Therefore, aspects such as what makes them successful and/or what can be learned from failures holds tremendous potential for advancing this trend and furthering sustainable practices.

The following sub-sections of this introductory chapter follow the overall structure of the book and provide an overview on how the respective chapters fit together and help the subject of TBL sustainability emerge. Each section is followed by an outlook and suggestions for future research based on the fruitful discussions and materials that the compilation of this edited book brought together.

1.2 The importance of TBL sustainability in global supply chains

In the initial section, there are some thought-provoking chapters that challenge one of the basic assumptions in current research: Western countries know what is good for the rest of the world. Examining this, Touboulic and Ejodame (Chapter 2: “Are we really doing the “right thing”? From sustainability imperialism in global supply chains to an inclusive emerging economy perspective”) adopt Griggs et al.’s (2013) representation of TBL sustainability, draw inspiration from the international development and poverty literature and apply Maslow’s hierarchy of needs as a theoretical lens. They suggest a multilevel and systemic view of the issue and articulate a number of propositions to guide future research. This is followed by Bellow (Chapter 3: “Supply chain resilience”), who investigates the importance from a risk perspective as he focuses on supply chain resilience and proposes that in order for a supply chain to be resilient it must be able to anticipate and adapt to risk, based on several examples. Then Meutcheho (Chapter 4: “A mixed-methods analysis of the effect of global sustainable supply chain management on firm performance”) turns towards importance from a performance perspective and analyses how professionals perceive the contribution of SSCM to a company’s environmental, social and economic performance based on survey responses of 242 professionals from a diverse range of industries.

These chapters set the stage for additional research questions that might help move the field forward and increase the importance and visibility of the topic of TBL SSCM:

1. What can be learned about the dynamics between the three TBL objectives from an emerging-market perspective? There are many locations around the globe facing extreme challenges economically, socially and environmentally. For example, Haiti was destroyed by an earthquake in 2010 and even today there are people who have not been able to rebuild their homes so have to live in temporary structures and face extreme poverty. To make matters even worse, only 1% of the natural forests remain—creating environmental and social issues. There are many other areas in the world facing extreme conditions that could use insights from both theory and practice to help make their communities more liveable, productive and hygienic.
2. Which stakeholders, beyond direct supply chain partners, are important in implementing TBL sustainability? Identifying all of the stakeholders and taking a systems perspective and understanding the interrelationships between those stakeholders is critical for TBL outcomes. The stakeholders vary across countries and across different types of business—governments, professional associations, competitors, customers and community members may all have different roles. Also, the impact investors and social business ventures play a key role in success.
3. How do (human and financial) resource constraints affect SSCM decision-making? The financial support chain is critical to these sustainability models from the idea stage to implementation and delivery. The financial chain is quite extensive and complicated—because TBL means economic sustainability as well as social and environmental, there has to be “proof” of profitability. Investors and other stakeholders demand economic viability.
4. Is resilience becoming more intertwined with sustainability in a scenario of increasing climate change issues? The looming supply chain disruption implications of climate change pose threats, but also opportunities for functions such as purchasing and supply management to help companies navigate through these (Bals, 2012). Increasing companies’ supply chain resilience in light of scenarios such as hurricanes and floods might become an approach both for corporate survival as well as potentially gaining competitive advantage for those doing it successfully (e.g. because of floods in Thailand some automotive companies were able to continue production with their local suppliers while others had to stop production).

1.3 Enabling TBL sustainability by fostering transparency, having appropriate methodologies and a shift in business education

This section focuses on the enablers of TBL sustainability, starting with transparency, then methodology and concluding with education. Opening on the area of having the necessary transparency in order to further improve sustainability, Ellram and Tate (Chapter 5: “Mapping networks and the influence on the natural environment”) start with their chapter on how network analysis can support one in gaining an overview about the network positions or roles and importance (based on dollars of spending) of various network members, based on data by the Global Reporting Initiative (GRI). This determines the embeddedness of an organization and identifies sub-groups or clusters to which the focal firm has to gain access in order to share its position on TBL sustainability and pass on information. The focal firm has the opportunity to use brokers as intermediaries between, among and with the sub-groups. Using network mapping tools, organizations can identify the types of brokers and how to best position themselves to share the most information and get the best TBL results. Next, providing a comprehensive overview of such data sources such as GRI, Abe and Chee (Chapter 6: “Integrating sustainability reporting into global supply chains in Asia and the Pacific”) show their results of an analysis of 121 sustainability reporting initiatives at both global and regional levels to develop and propose a sustainable global supply chain (GSC) reporting framework in Asia and the Pacific.

Continuing with methodological requirements, Steinberg (Chapter 7: “The sustainability blind spot: Identifying and managing climate risk in global supply chains”) turns towards the area of risk management in supply chains and presents the case for why reduction of climate risk in the supply chain and business-led community risk reduction are complementary to each other, outlining a method for identifying risk and prioritizing supplier and community engagement opportunities. This is followed by Halog and Nguyen (Chapter 8: “Evaluating supply chain networks by incorporating the triple dimensions of sustainability paradigm”), who develop mathematical-programming-based efficiency metrics under the headline of “sustainable network operational efficiency” (SNOE), targeted at assessing supply chain performance and evaluating possible design configurations of a global supply chain. Finally, Moxham and Kauppi (Chapter 9: “The valorization of social sustainability: Using quality seals to drive continuous improvement in global supply chain management”) present their examination of quality seals: standards, certifications, codes of conduct and labelling, which they use as proxies for socially sustainable supply chain management.

Closing the section on enablers, London (Chapter 10 “The role of business schools in developing leaders for TBL sustainability”) turns towards the role of higher education and how business schools in particular can facilitate the journey towards TBL sustainable supply chains. He states that based on the large numbers of students attending a wide variety of programmes—and business schools’ capacity for creating events that will attract discussion of these issues—they are uniquely positioned to move the topic forward as a central curriculum item and educate students on good business practice, rather than positioning such content as “nice to have”.

Adding to this, the following future research questions come to mind:

1. How can we gain transparency in particularly complex supply networks (e.g. multi-tier and sub-contractor prone supply chains such as in the electronics, automotive and garment industry)? Transparency and information sharing are largely aligned. Understanding how to access and to validate the information in complex networks is very challenging.
2. How can we map a TBL network that includes all of the different stakeholders and use this information to better design both the financial and information supplementary chains? There are a number of calls for work in network design and sustainability; understanding how to disseminate the necessary information or change a network structure is crucial for TBL success.
3. Are quality seals becoming more globally trusted by consumers or does negative coverage of one also affect the others negatively? The multitude of different seals still poses a barrier to improved consumer decisions and whenever a seal makes the headlines as “untrustworthy” anecdotal evidence suggests that consumers see the trustworthiness of other seals decline, too. To provide an illustration of such trust breaches, in Germany the media has covered practices such as adding unsustainable ingredients to partially balance recipes (for example, a case where some fair-trade sugar and cocoa was added to a product otherwise containing non-fair-trade sugar and cocoa) and labelling this “mass balance” on the packaging’s fine print. Such practices can undermine consumer trust in such labels.
4. How can sustainability be embedded into business school curricula beyond specific domains (e.g. business ethics)? Why is sustainability often still just a “module” within specific content domains, such as marketing, supply chain management or human resources management? How could it become not optional but required learning for all business operations within modern higher education curricula?

1.4 Practical insights from cases on how TBL sustainability can be achieved

This section focuses on the implementation aspect of TBL sustainability and has a number of cases that discuss this aspect. What are some of the keys to success? What are some of the barriers that need to be overcome? What are some of the intended and unintended consequences of focusing on TBL sustainability?

Camacho and Vázquez-Maguirre (Chapter 11: “Sustainable supply chain in a social enterprise”) start by developing a framework that focuses on the introduction of sustainability into a supply chain and present a social enterprise that focuses on community well-being through value creation and sustainability. This is followed by Sahasranamam and Ball (Chapter 12: “Sustainable procurement in social enterprises: Comparative case studies from India and Scotland”), who compare two social enterprises, one from the developing-country context of India and the other from the developed-country context of Scotland. Through these case studies they illustrate how social enterprises integrate TBL...