From the source and not through force: Green supply chain practices for environmental sustainability

Since its recognition as a multi-disciplinary management topic by the Brundtland Commission in 1987, sustainable development had been looked up as an approach towards resolving environmental damage.

The United Nations' Millennium Development Goals and the World Bank Group's global practices have recognised sustainability as an essential issue of global importance. While the other forms of sustainability (like economic and social dimensions) exist, evolving over the years, environmental sustainability has gained significant popularity.

Environmental sustainability or environmentalism can be defined as a social movement that concerns for environmental protection and improvement of the health of the environment, for the betterment of biological ecosystems. Reputed firms across the world, including Walmart, Dell, Xerox, and conglomerates like the Tata Group, P&G, Unilever, have all set company-specific goals, showing their commitment to environmental issues.

Predominantly environmental sustainability practices have been related to buying greener products, avoiding hazardous materials, energy optimisation, and waste reduction. While a few firms are still reluctant to engage in environmentally beneficial activities out of concern to compromise the economic benefits for ecological restoration, a few others have positioned environmental practices at the forefront due to legislation, industry and government commitments.

However, in several firms, high importance has been given to environmentalism due to compelling regulatory norms, and a potential to manage costs, risks and optimise eco-friendly practices. In this process, organisations, especially in the manufacturing sector, get so serious about the low-hanging fruits of waste reduction and energy efficiency improvements, that they fail to recognise the need for restructuring their learning imperatives and see the big picture of environmentalism. While government norms, organisational policies and corporate environmental responsibility projects drive some element of environmental practices, these are merely short-term actions towards environmental sustainability.

It is through organisational learning for environmental sustainability, that a strong urge in people could be created for long-lasting benefits. Self-regulating and reactive learning organisations, capable of creating their future through recursive learning, are believed to act as learning systems to bring focused environmental changes through green practices for sustainability.

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In the context of creating environmentalism as part of the organisational learning system, green supply chain practices become useful. These include green procurement, green manufacturing, green distribution, and reverse logistics. From the acquisition of eco-friendly raw material to disposal/ reuse/ recycle of used products, green supply chain practices picture the ecological efficiency of an organisation's actions. They integrate environmental concerns in the day-to-day operations of a firm, that their employees, suppliers, distributors, retailers and customers feel on a daily basis. Thus, green supply chain practices enable organisational learning for environmental sustainability.

Our research, based on a survey of 220 respondents across 21 manufacturing units in India, points to the interlinkages between green supply chain practices, organisational performance and learning dimensions. We found that these interlinkages not only lead to a long-lasting natural drive towards environmental performance, but also to higher economic performance in firms. Research evidence shows that the positive impacts of environmentalism could only be felt in the long term when they get embedded into organizational learning systems through green supply chain practices. The resultant learning systems smoothens the knowledge flow in the organization and help firms to strategize for better performance, bearing in mind the environmental aspects. This further leads to strategic learning capability that promotes environmentalism across all players (employees, suppliers, distributors, retailers and customers) in manufacturing supply chains. Thus, the emergent learning systems from green supply chain practices lead to environmental sustainability from the "source" (willingness) and not through "force" (regulations).

Drawing the linkages amongst green supply chain practices, corporate environmental performance, corporate economic performance and the dimensions of learning organisations in firms is a necessary incipient for an organisation's progress and environmental protection for society in large. Understanding these inevitable links will enable managers and experts to shape their organisational values, work practices, and performances for the greater good of society. This holistic approach of green supply chain practices activates environmentally responsible strategies and helps achieve organisational effectiveness for environmentalism.

We infer that the organisational concern for the natural environment should be turned into a shared understanding of the organisation's participants through continuous and embedded learning mechanisms. In other words, when the different players of a manufacturing supply chain realise the inherent benefits associated with the organisational learning dimensions, their drive towards environmentalism increases. Policymakers should support this thinking by not merely imposing environmental practices as regulatory norms, rather emphasise and care for creating green supply chain-based learning systems in manufactures.

The writer is is an Assistant Professor of Practice in the Operations Management department at the Indian School of Business, Hyderabad.