Track 5f

Sustainable Supply Chains and international trade

Track chair

Prof. dr. W.J.V. Vermeulen (Utrecht University & Stellenbosch University)


Recently we are witnessing a fast growing implementation of (mostly) private voluntary sustainability standards and of corporate strategies towards substantial or full sustainable sourcing (examples are Unilever, DSM, Tesco, IKEA, Adidas, Nestlé, Cargill, Mars, Mondelez, Dangote, Nescafe, Nespresso, Kingfisher, IKEA). In both cases these approaches aim at transforming unsustainable practices of production, trade and consumption in international supply chains towards improved environmental and social conditions (workplace and community) and the creation of shared value. A wide range of private voluntary sustainability standards is applied to verify compliance with sustainability best practices (including FSC, MSC, Organic (IFOAM), Fairtrade, UTZ Certified, Rainforst Alliance, GlobalGAP, ETP, RSPO, Bonsucro etc.). In various global markets the penetration of these sustainable sourcing practices has ramped up reaching 40% (coffee), 25% (cocoa), 15% (palm oil) of the full global production in 2012, with global total sales reaching 12% (coffee), 7% (cocoa), and 8% (palm oil) (IISD, 2014, p. 91). In some consumer countries we observe mainstreaming of sustainable labelling. In the Netherlands around 40% (coffee, palm oil, fish, cocoa) and 65% (timber) of the sales in 2012/2013 (van Oorschot et al., 2013, p. 33) were sustainably sourced and governments are recognizing the strengths of such market-based sustainability transformations.


Interestingly, these practices of self-governance originally rested on the organizing capacities, field experience and collaborative efforts of front-runner companies and globally acting NGOs, while governments have been on the side-line (Vermeulen and Kok, 2012; IISD 2014).


In creating private governance approaches for global supply chains the private standards address sustainability issues with a holistic perspective, coherently addressing practical sustainability challenges, directly related to the production of specific goods, products and commodities. Most of the advanced standards simultaneously address a wide variety of environmental issues in combination with social challenges of community development, fair and healthy working conditions, respecting labor-related institutions and adjusting the modes of business-to-business interaction in markets, both globally and locally in supplier countries.


In the field practitioners and their knowledge support agents have started to jointly develop a general theory of change about global market transitions (see for example Molenaar et al., 2013). While NGOs and front-running companies initially operated independently, in a context of a lack of government activity in addressing externalities related to the import of goods from developing country's pollution havens (Mani and Wheeler 1998; Cole 2004), now more recently new smart forms of concerted market - NGO - governments strategies have been implemented successfully.
This new approach has recently also be labelled as ‘global market transitions'. Some scholars suggest an analytical framework for understanding this transition towards sustainable global markets, based on empirical evidence. Such frameworks illustrate this by using a S-curve, which describes various different stages of a market transformation process progressing towards sustainability. These authors explore the role of voluntary sustainability standards and other instruments at each stage of the S-Curve (see for example Molenaar et al., 2013; van Oorschot et al. 2013). A key role is given to trans-disciplinary collaborative approaches in engaging the key economic actors in the centre of global supply chains as major leverage points, which may work well with concerted smart pressures from market, civil society and governments.

But one can take the debate also further. Imagine 2025, where will we be 10 years after the 21st ISDRS conference of Melbourne? Is a rapid and structural transition to a circular and fair global economy possible, using this road of self-governance for products traded in the global economic arena? This will strongly depend on 4 key factors: rapid growth of consumer demand; ‘all-inclusiveness' of these supply chain governance approaches; successful uplifting production practices of all suppliers; and making them address the major issues of unsustainability. Will such approaches be successfully translated into a new practice of CSR or CSV?


Here we see various serious weaknesses, like the lack of 3rd order evaluation and biases causing the overlooking of some of the more recent issues and less visible supply chains. The challenge is to develop a form of ‘meta'-governance, including new approaches by governments, combining public policy strategies with the demonstrated virtues of self-governance.

We welcome any research or critical review paper addressing one or more of the issues suggested here.

Contact: president@isdrs.org

You may submit your abstract by visiting the Ex Ordo abstract submission system (you will be required to setup an account first): http://isdrs2015.exordo.com/

References used:

Alvarez, G. & Hagen, Von, O., 2011. The Impacts of Private Standards on Producers in Developing Countries. Literature Review Series on the Impacts of Private Standards, Part II, Geneva.
Alvarez, G. & Hagen, Von, O., 2012. When Do Private Standards Work? Literature Review Series on the Impacts of Private Standards; Part IV, Geneva.
Hagen, Von, O. & Alvarez, G., 2011. The Impacts of Private Standards on Global Value Chains. Literature Review Series on the Impacts of Private Standards, Part I, Geneva.
Hagen, Von, O. & Alvarez, G., 2012. The Interplay of Public and Private Standards: Literature Review Series on the Impacts of Private Standards, Part III, Geneva.
Porter, M.E. & Kramer, M.R., 2011. Creating shared value. How to reinvent capitalism - and unleash a wave of innovation and growth. Harvard Business Review, pp. 2-17.
Resolve, Steering Committee of the State-of-Knowledge Assessment of Standards and Certification. (2012) Toward sustainability: The roles and limitations of certification. Washington, DC: RESOLVE, Inc.
Vermeulen, W.J.V., 2010. Sustainable supply chain governance systems: conditions for effective market based governance in global trade. Progress in Industrial Ecology, An International Journal, 7(2), pp.138-162.
Vermeulen, W.J.V. (2013) Self-Governance for Sustainable Global Supply Chains: Can it deliver the impacts needed? In Business Strategy and the Environment, doi: 10.1002/bse.1804

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10th - 12th July
2015
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