Best Practices in Green Supply Chain Management

A Developing Country Perspective

Sadia Samar Ali, Rajbir Kaur, Jose Antonio Marmolejo Saucedo

• Publisher: Emerald Publishing Limited
• Year: 2019
• ISBN:
  9781787562172
• Topic: Betriebswirtschaft
• Subtopic: Nachhaltigkeit im Unternehmen

Meeting consumer needs and desires, while promoting cleaner production and sustainable consumption, is one of the greatest challenges facing industry today. Addressing poverty and environmental degradation requires changing how global organizations produce and distribute goods and how people and organizations consume and dispose of them. It requires a more efficient use of resources, together with action-oriented thinking but raises a range of highly specific challenges for organizations operating in emerging economies.
Best Practices in Green Supply Chain Management offers new insights on the challenges of integrating environmental awareness into supply chain management operations in developing countries. The authors present in-depth case studies from the Indian and Mexican manufacturing industries, which are used to illustrate broader lessons in the implementation of sustainable practices for developing economies.
This book presents detailed findings and practical guidance to both researchers and practitioners working in the fields of business management, sustainability and green practices, as well as all those who wish to understand why organizations should integrate sustainable strategies and how to implement them.

Chapter 1

Sustainable Supply Chain Management

Section I

1.I.1 Introduction

Human existence visualized from a collective as well as individual perspective appears to be a natural rather than a contrived phenomenon, which has been aligning its growth patterns to the everlasting and evolving social, ecological, cultural, and economic processes. It has traversed from “Conventional to Contemporary” and “Individualistic to Materialistic” approaches to find a firm and cohesive entity in the modern world by virtue of living practices and approaches which are conducive to its own viability or sustainability and nourishment of its natural environment. As stated by Hans Meltofte (2013), “There is no inherited capacity in human nature to safeguard the earth’s biological assets-moral and intellectual strengths are needed to achieve conservation and wise use of living resources through cultural and personal ethics and practices.” By integrating nature into their socioeconomic cultures, resources lifestyle, and survival ethos, humans have managed to establish coexistence and connectedness with nature. For ages they have survived though the thick and thins of their environmental complications, but the modern world is posing some serious threats to their existence. Why so?

Experts share divergent opinions about the modern world; one opinion believes that the modern civilization is characterized by separation, scarcity, struggle for survival, and materialism, feeding on individual's identities, greed, and hunger for power; the other opinion believes that the modern civilization is in the phase of transition as result of awakened consciousness of the human mind which continually seeks harmony and peace with its surrounding environment (Ali, Kaur, & Jaramillo, 2018).

In light of these statements, we analyze these two contradictory worlds; the materialistic world encounters shocks and stresses due to continuous degradation of the environment, global warming, and indifferent and careless consumption, thereby threatening livelihoods and natural ecosystems. There is no contradiction in the fact that climate change and human activities together contribute to the decline of earth's natural habitat, and there is no such term as static environment or limitless supply of natural resources, so here we have cause to worry. It clearly means that human activities should conform to a standard of functionality which aims to increase the inherent potentials of an ecosystem to generate, sustain, and evolve not only the feasibility and growth for the lives in a place but also their sustainable continuity. But reality is far from this notion. As we know, increasing globalization, industrialization, growing international trades, and evolving customer's demand drive the production and consumption patterns upward, and these factors exert anomalous pressures on the working capacities of organizations worldwide, and consequently organizations stretch their existing capacities to compensate for this ever-increasing demand. Financial incentives are far more tempting and lucrative than environmental incentives, so bypassing environmental ethos and agendas eventually leads to the decimation of the natural environment. Loose and nonuniform regulations further add to the intensity of the problem. Instances of environmental damage by human civilizations are ample and can often also be traced to many literary works as mentioned by Jared Diamond (2005) in his book, Collapse: How Complex Societies Choose to Fail or Survive. Globally, organizations speak about sustainability and sustainable practices in their business operations, their corporate strategies, and alternately the ideas of bigger profits and phenomenal growth also appeal to them strongly. It is evident beyond any doubt that in this materialistic modern world, “margins are earned at the cost of the environment.”

Alternatively, the opinion about a different world, which is founded on the “principles of sustainability” and has environmental concerns at its forefront, offers some hope to mankind. This world prefers to put environmental sustainability as a continuous and universally accepted reality and a combined responsibility of every human being on this planet.

1.I.2 What Is Sustainability?

Sustainability is something everyone can work towards… whether it is picking up garbage you see on the street or boycotting a company that practices environmentally harmful business methods, we all can make a difference. ¹

Sustainability can be visualized as a concept, a development strategy, or an operating practice. Sustainability as a concept is an idea which guides our paths in a direction of how we might live in harmony with the natural world around us, protecting it from damage and destruction. It is tricky though as we strive to find balance between two competing needs; one favoring economic and technological advancements and the other prioritizing the environment.

Sustainability literally means capacity to endure or ability to be maintained at a certain rate and level. Different viewpoints can be found defining “sustainability” in their unique contexts; however, the original and most commonly cited definition of sustainability or sustainable development (SD) is

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs. (Brundtland Report, 1987)²

1.I.2.1 Origin of the Term “Sustainability”

The United Nations, an intergovernmental body established after World War II, has been working toward promoting international economic and social co-operation and development and importance of human culture and science. It was during the year 1987 the environmentalist and development experts within the United Nations system coined the term “sustainable development” and gave the abovementioned statement in the landmark “Brundtland Report.” The aim of this report was to find an alignment between two contrasting interests of environment stability and economic development. This statement also provided us the “three E’s” of Sustainability: Economy, Environment, and Equality.² This report was responsible for the commissioning of UN program of Action on “Sustainable Development” which eventually led to the creation of the UN Commission on Sustainable Development after the Rio Summit ³ in 1992 with a purpose of increasing awareness about SD across various sectors and levels of human society. Significant international SD programs promoted by the United Nations are the United Nations Development Program (UNDP),⁴ United Nations Environment Program (UNEP),⁵ and United Nations Human Settlements Program (UN-Habitat).⁶ Several international congresses including the United Nations Conference on Sustainable Development (Rio 2012, Rio+20 or Earth Summit 2012) have been actively contributing toward SD with a continuous and strong commitment.

1.I.2.2 Three Pillars of Sustainability

1. Environmental protection – minimization of negative impacts by sustainable production and consumption;
2. Social development for equality;
3. Economic development.

The accomplishment of development in these three core areas can be commonly termed as sustainable development.

Sustainable Development is defined as “A process of change in which the exploitation of resources, the direction of investments, the orientation of technological development and institutional change are all in harmony and enhance both current and future potential to meet human needs and aspirations”⁷

Expanding the concept further, in 2000, the Earth Charter ⁸ redefined this statement by adding ideas of global society centered on the themes of “respect for nature, universal human rights, economic justice, and a culture of peace.”

The dimensions of SD cover three main areas starting from physical aspects, focusing on the use of natural resources in a manner which limits their degradation while maintaining their equation with nondeclining or renewable stocks of natural resources such as soil, groundwater, and biomass to keep them useful for future generations. The economic aspect of SD implies maximizing the net benefits of economic development, subject to maintaining the services and quality of natural resource (Idowu & Kasum, 2013), which means there should be a balance between the use of natural resources and real incomes in future. Economic development clearly focuses on the fact that the use of natural resources should promote the inflow of future funds while stabilizing the quality of natural resources. The social development aspect relies on principles of good governance and covers broad areas of food security, equality, inclusive prosperity, sanitation, health, clean drinking water, and minimum living standard for all. We can say that SD aims to preserve the level of economic well-being for future generations while achieving a balance between human need and environmental needs of planet earth. The social development agenda, however, has remained the point of debates and discussion as many researchers believe that while economic and environmental dimensions have received required attention, social dimension has been left behind (Ashby, Leat, & Hudson-Smith, 2012; Carter & Liane Easton, 2011; Mani, Agrawal, & Sharma, 2016; Seuring, 2013; Seuring & Müller, 2008). The reason could be attributed to the fact that the definition of sustainability though covers the human need perspective; it is a broad statement and is generally interpreted in different manners, in the context of different countries. The real difference in SD achievement goals could be understood by going through the SD perspective in developing countries.

1.I.2.3 Issue of Sustainable Development in Developing Countries

For better understanding we would like to proceed with this concept from a different perspective; first, understanding development from the following viewpoints:

• Feasibility is the development in a given region; feasible constraints and challenges;
• Affordability is the development in a given region affordable; if so, at what cost?
• Viability is the strategies to retain the element of sustainability in development;
• Relevance to the local context is how much the sustainability programs fit in the local context.

While SD is considered as a perfect pathway for countries striving to deliver inclusive growth, eliminate poverty, and reduce the risk of climate change by changing perspectives and approaches, alternatively many researchers believe that it has become a glorified agenda or a metaphor for describing human welfare and environmental management (Cobbinah, Erdiaw-Kwasie, & Amoateng, 2015), especially in developing countries which are struggling for economic developments while maintaining practices and factors supporting environmental conservation. Critics have questioned whether economic development is possible without sacrificing environmental issues, especially in developing countries. Though developing countries are becoming sources of global economic growth, they still struggle to find solutions for energy, food, water shortages, and unchecked use of natural resources. Developing nations attract investors and manufacturers who are on the lookout for cheap cost of production and labor in return for economic benefits for the host country. These countries have enough supply of raw material to fulfill the demand of enhanced production. Regional and political factors also play a major role in these income generating opportunities. As the world has turned into a global market, the demand for commodities are soaring every day, putting pressures on natural resources like industrial metals and fossil fuels. The growing demand of commodities brings infrastructural development to accommodate the manufacturing unit, warehouses etc., so this implies use of land and other infrastructural facilities, enhanced transportation, and more mobility of labor. This sometimes leads to concentration of industrial setups in confined localities which are not established historically for accommodating such burdens. These concentrated and confined places sometimes become the focal points of discussions among environmentalists and researchers who believe that the development which comes at the cost of health and safety cannot be termed as sustainable. This concept of sustainability is certainly debatable on the grounds of its longevity as well. For these similar reasons, the statement given by the World Commission of Environment and Development (WCED) has been criticized for its many limitation; first, it acknowledges that decisions related to economic development must be inclusive of environmental and social implications, but these somehow do not cover the “place” (Aygeman & Evans, 2003), “person” (WCED, 1987), and “permanence” (Adam, 1998) aspects. Development agendas should integrate the relevance of place in its context because place paradigm in development considers “place-based models of nature, culture, and politics” (Escobar, 2001). Nature is specific to a place and sometimes it becomes a symbol or landmark for a specific region, as we recall the valley of Jammu and Kashmir ⁹ has been popularly called as the paradise on earth because of its natural and scenic beauty. The features of a place describe the patterns of networks, mobility, and migration in it; inward if favorable, outward if not (Urry, 2002) Places are grounds for people's identities, behavior, way of life, and psychological health (Franquemagne, 2007; Garavan, 2007; Leff, 2000) and provide a sense of kinship, inclusion, and rapport to them (The five dimensions of sustainability). Concerns about another dimension of SD, which is, “permanence,” have been highlighted by Donald Worster (1993) in his work, The Shaky Ground of Sustainable Development, when he states,

The first and perhaps most difficult problem, one that seldom gets addressed, is the time frame…Is a sustainable society one that endures for a decade, a human lifetime, or a thousand years?

Time as mentioned by Giddens (1984) has relevance to space, social institutions, and individual persons. In his book Five Dimensions of Sustainability, Seghezz (2009) has stated that the notion of sustainability should include personal dimension. The UNDPs also stresses upon the fact that men, women, and children must be the center of attention–with development woven around people, not people around development.⁴

In the context of the above viewpoints, we would like to discuss the SD prospects in India.

1.I.3 Regional Factors of Industrial Growth

Industrialization in India had gained prominence because of its rich sources of raw material, supported by the availability of skilled and unskilled labor, production facilities, favorable government rules and regulations, transportation facilities, and connection with railways and highways. Climatic condition, ample water supply, good connectivity via national highways running throughout the country, major international airports in major cities providing international access, infrastructural connectivity, affordable housing options, cost-effective land acquisition plans in suburban areas in most big cities, presence of auto engineering and electrical industries, energy, automotive, and many more along with the booming IT sector in India are some of the compelling factors of industrial growth here.

1.I.4 Political Factors of Industrial Growth

The government had always pushed the industrial sector across India with its multiple numbers of schemes as the government believed that growth in the industrial sector impacted the gross domestic product in India.

When Mr Narendra Modi became the Prime Minister of India in 2014 he launched multiple schemes as a part of a wider set of nation-building initiatives of which Make in India¹⁰ gained immense popularity. This initiative was a major cry for the Indian industrial sector to utilize the immense potential of its resources and to present India's strong “technical and innovative” and “manufacturing” image to the world. Mr Modi gave a major push to the entrepreneurship drive also and motivated people to go for their “startups.” Multiple schemes were launched in “Startup Action Plan” in 2016 of which fund of funds and tax exemption became really popular.¹¹

For better working of small and medium enterprises, the government had multiple schemes of which the Industrial Cluster development program, Micro Small Enterprise-Cluster Development program, Industrial Infrastructural Upgradation Scheme³ were meant to promote industrial growth in established clusters like the Pune Nashik area as well as the new ones. Some of the government's financial and skill improvement schemes also gave a boost to the manufacturing drive like Pradhan Mantri Kaushal Vikas Yojana (PMKVY)¹² to open 1,500 multiskill institutes across the country. Allocation of 34.65 billion for the growth of micro, small, and medium enterprises and lowering the corporate tax rate for relatively small enterprises and tax saving schemes for new manufacturing companies all worked in the favor of industrial growth.

While these factors of industrial growth are favored because they provide economic benefits to our country bringing social equality and upliftment of poor sections of society with more funds and job opportunities, alternatively we strongly believe that amidst the heat of the discussions of the delineations of social agenda like the upliftment of the poor, everyone seems to overlook and exploit the nature to their own adv...