Green supply chain and Proactive environmental strategies

1- Environmental governance
2-Supplier Integration
3-Supplier Development Programmes
1 Environmental governance
• Green house effect caused by excessive CO2 emissions
• Green house gas émissions
• United nations environmental programme (UNEP)
• Multi environmental agreement (MEP):
• Convention in international trade on endangered species (1973)
• Stockholm convention on persistant organic pollutants
• International stratospheric ozone regime (1987 Montreal protocol)
• UN Framework on climat change (1992)
• Kyoto protocal (1997)
• Paris Agreement (2015)
Instruments of environmental governance
• Direct regulation: standards of reference, permit, license that allow to pollute at a
certain level
• + clear an precise, effective when firms are indentifiable
• - difficult to apply to remote firms, inflexible, require comprehensive information
on the industry regulated

Others:
Accreditation of good performers to to lighten the regulatory burden
Long term agreement on target reduction plans
• System based management (hazard and risk assessment, risk control) and ex post
measurement
• Tradable pollutions rights
• Taxation systme to the amout of polluting activity
Assessment of environmental and social
impact of activities
• Increased consumer awareness of the environnemental impact of
production and transportation of goods
• Campains and direct action by NGO’s,
• Emerging national and international regulation
• Reducing environnemental footprint
• Avoid reputational risk
• How to transmit environmental demands to supply chain actros?
• Production
• Processing
• Distribution
• Consumption
• Disposal or recycling
• UN global compact
• Multi stakeholders initiatives (MSIs): environmental sustainability of
agro food and forestry products, mining operations, chemicals,
electronics…
Self regulation and corporate environmental
responsabilty (CER)
• Direct regulation is difficult to implement
• Specific behavior recommanded by an organised group, business
association
• Code of conducts, best practices, externally audited standards
• Work best when non complaint behavior has clear consequences
(name and shame, de registation from an association)
• When industry self interest and wider public interest are aligned
(reduces energy and cost)
• Individual firms adress environmental externalities beyond what is
mandated by regulation: public authorities play a coordinating or a
facilitating role
• Product environmental reports, informations to affected community,
sign up to international initiative
Value chain transmission mechanism
• Eco efficiency: lowering cost through organisational and procedural
improvement
• Environmental cost leadership improving environmental cost of
products or services
• Beyond compliance leadership based on differentiation through
organisational and procedural improvement (building brand or
company reputation for environmental excellence even through it
increases operational costs
• Eco branding based on differentiating the products and services
offered to customer
Market based instruments
• Consumer facing labels
• Agro food sector
• Stewardship councils and rountables: FSC, 1993; Marine Stewardship
Council, 1999; rountable on sustainable palm oil, 2004; Aquaculture
stewardship council, 2010;routable for responsible soy, 2006;
routable on sustainable biomatérials, 2009; the aquaculture
stewardship council, 2010; sustainable beef rountable, under way
• Nomenclatures: better sugar cane initiative, 2008; better coton
initiative, 2009
• Fairtrade,1989/1998; Rainforest alliance, 1993
Factors places on suppliers
• Standards driven greening: identify the main environmental impact to
be reduces embed these informations into standards that the
supplyer have to comply with
• Mentoring driven greening, personal relation between buyer and
supplier
Green Supply Chain Management GSCM

Materials Management= Green Purchasing + Green Manufacturing

Green Distribution=Marketing + Reverse Logistics
2-Supplier Integration
Transnational features of economic, social and
environmental governance TEG
• How collective and individual actors from different national context engage in
cross border rule making implementation, enforcement and rule making:
• TEG transnational environmental governance
• Transnational gouvernance is hybrid, not only private neither public
• Public regulation apply in area where the state has never regulated
• GVC analysis: Global value chain analysis
• Orchestration of mechanisms
Orchestration
• States or intergovermental organisation initiate guide, broaden or
strenghten transnational governance by non state or sub state actors
• mechanism which are directive or facilitative
• directive orchestration incorporates private initiative into regulatory
frameworks (mandating principle of transparency, , code of conduct)
• Facilitative orchestration : Provision of material ad ideational supports in
order to kick start, shape and support new initiatives
• The success depend on the context:
• Regulatory fragmentation and uncertainty
• Issue visibility: industry and related set of issues are visible
• Interest alignment: subtantial overlap between public and private interests
• Issue scope: a narrower more specialised set of issues
 Procedural elements
• Standard setting, certifications and accreditation, impact evaluation,
• Transparency, inclusiveness, consensus, accountability
• Inspired by FSC model
• https://ic.fsc.org/en/what-is-fsc-certification/forest-management-certification
• Ex: international social and environmental labelling alliance (ISEAL).
• Members are international stands setting and accreditations.
• Iseal has developed three Codes of good practice for setting, assessing and
assuring compliance with social and environmental standards.
• https://www.isealalliance.org/community-
members?f%5B0%5D=community_status%3A176
 Questions
• 1 Why should international organisations and national government get
involved in orchestrating Transnational social and environmental governance?
• 2Why are firms and industry association getting involved in MSIs on
sustainability, which they can only partly shape and control?
• 3 Would it be more efficient to achieve global environmental governance by
setting up a world environmental organisation?
 CSR in global supply chains
Sustainable procurement
• sustainable supply chain through green procurement
• principles of sustainable procurement
• sustainable procurement practices with survey-based approach
• green procurement is affected by product performance, purchasing price,
organization’s environment consideration, and trading partners.
• ISO 20400: Sustainable procurement- Guidance
•
Supplier integration 1
Supplier integration is the evolutionary process used to form long-term co-
operative relationships with suppliers.
Suppliers assist their customers with co-operation to promote product
development, lifecycle analysis, performance metric development, risk
assessment and timely delivery.
A co-operative buyer–seller relationship uses a supply base that consists of
one or a few preferred suppliers.
This will maximise bargaining power and achieve economies of scale. This is
the opposite of the open-market bargaining model and clerical perspective
of purchasing that attempted to sustain a competitive environment by
maintaining many suppliers. (Landeros and Monczka 1989).
Supplier Integration 2
Cooperative relationship:
A credible commitment to a long-term relationship is maintained because there
is a concentrated joint effort to improve quality and productivity and to reduce
waste and overall costs.
Disputes are resolved by working jointly on the problem instead of taking hard
positions in which the outcome may depend only on power.
In order to develop a mutual response to changes in the marketplace, the buying
and selling firms use joint problem-solving efforts.
There is a greater amount of data-sharing in a co-operative relationship.
The goal of a successful supply chain is to trade off information for inventory
whenever possible, holding inventory in the locations, quantity and form that is
optimal for the entire supply chain.
The characteristics of a cooperative relationship
A pool of preferred environmental suppliers
An alliance incorporating a credible commitment between buyers and sellers
Joint activities aimed at environmental problem-solving
An exchange of environmental information between firms
Joint adjustments to marketplace conditions
A credible commitment to a long-term relationship
 3-Supplier Development Programmes
• A supplier development programme is a systematic organisational effort to
create and maintain a network of competent suppliers.
• At a micro level this involves seeking out new suppliers for new ‘greener’
products and materials.
• At a macro level, a supplier development programme includes activities that
help suppliers continually improve quality, reduce waste and bring about a
better understanding of the long-term mutual benefits to both parties.
Steps of supplier Development Programmes

Key steps on the process involve programme initiation, programme

organisation, supplier evaluation, consensus development plans and,
finally, implementation and evaluation of the development
programme.
Step1 Supplier assessment
Step2 Identification of the causes of the problem
Step 3 Implementation team
Step 4 Evaluation of the results
 Steps of the supplier development programme
Step1 Supplier assessment
• The formulation of a supplier development team will need to be developed to
analyse the impact assessment and set forth objectives for the programme.
• The development team can be organised by the material to be purchased or by
the supplier to be developed.
• Cross-functional teams
Step2 Identification of the causes of the problem
• Supplier performance problems can be classified in terms of required supplier
capabilities—technical, manufacturing, quality, delivery, financial or managerial.
• This classification helps to narrow the area(s) to be investigated. The supplier’s
managers should be invited to participate in the analysis; the objective is to
obtain a consensus diagnosis involving both the supplier and the buyer.
Steps of the supplier development programme
Step 3 Implementation team
• This group then designs the plan and time-schedule for the programme. During
this phase the team must determine the degree of emphasis on each
developmental area. There should be a consensus between the buyer and the
supplier at this point. Through working with the supplier the development plan
is implemented.
Step 4 Evaluation of the results
• The consensus development plans, developed by both the buyer and the seller,
have been implemented. When the implementation is complete, the results
should be evaluated for developmental objectives as well as for specific
environmental, technical, quality, cost and delivery capability objectives. It is
recommended that if the programme works properly over the short term,
participating suppliers should qualify for long-term ‘certified’, or ‘preferred’
status.
Examples of environmental performance indicators
• Biodegradable / compostable (%),
• Commitment to periodical environmental auditing,
• Contains no ozone depleting substances,
• Emissions and Waste (per unit of product),
• Energy efficiency label,
• Environmentally-responsible packaging,
• Global application of environmental standards,
• Hazardous air emissions,
• Hazardous waste,
• International Organization of Standards (ISO) 14000 certification,
• Landfill – tons of waste per year,
• Number of hours of training on environment per employee,
• Use of less hazardous alternative (% of weight/volume),
•
• Steel Industry:
• http://www.posco.com/homepage/docs/eng6/jsp/s91a0000001i.jsp
• https://www.bluescope.com/
 Case Study
• Choose a CSR report
• Present its content
• Get additional information about the CSR policy of firm from the internet:
NGOs, Press…
• Use the GRI framework to comment the report and make your opinon about
it.
• Prepare a 15mn présentation
• 1.OVERVIEW, BUSINESS AND PRODUCTS

• 2. CSR REPORT: EVALUATION OF CONTENT AND DATA

• 3. PRINCIPLE OF MATERIALITY

• 4. OUTSIDE THE REPORT AND SUGGESTION