Welcome to Thematic Working Group 5d

Sustainable Value Chains and international trade

The objective of this working group is to promote a dialogue between academics, practitioners and decision-makers with an interest in exploring existing and innovative forms of governance of sustainable supply chains and international trade and related environmental, socio-cultural, ethical and economic issues. Like in the last years we will organize a track in next year's conference.

Working Group Chairs

Dr. W.J.V. Vermeulen - w.j.v.vermeulen@uu.nl

Dr. X. Rueda - x.rueda@uniandes.edu.co

Dr. V. Nelson - valairn@ntlworld.com


Impressions of Track 5f on Sustainable value chains and trade in 2017 ISDRS conference

In the 23rd ISDRS Conference in Bogotá our track included 13 presentations with inputs from various parts of the world. Privately led instruments for introducing sustainability in value chains have become more present and diversified in recent years. In our sessions authors explored these different types of instruments, with particular emphasis on business-to-business models. Cases of direct trade and social enterprises, in which manufactures engage directly with suppliers, offering a higher share of the value, were discussed. Interestingly, these examples are still supported on third-party certification, explicitly or implicitly.

Individualized strategies have extended their aim at producing not only economic value for providers and businesses but also social and environmental value, as the examples of collaboration and symbiosis among companies demonstrate. In spite of progress, these individualized strategies still struggle to produce scalable results. In many cases companies reach only a small percentage of providers, highlighting the role of broader, landscape-scale initiatives that engage multiple actors, including the state. Examples of these new actors and their roles were given in the cases of REDES program in Colombia and the School of Textiles in Germany. In both cases universities are playing a key role providing tools for learning, developing capabilities and increasing trust among participants.

Assessing the impact of private sustainability instruments presents several challenges, from access to information to robust and credible counterfactuals. Some of the presenters showed data towards this end, highlighting how value is distributed among actors in the network and what types of benefits are produced.

IMG_0493

Most of the work on value chains has been done in the upstream part of the chain. Evidence was presented on inclusive distribution and its impacts on low-income female heads of household. The discussion then centered around the challenges for introducing sustainability in the context of emerging economies where the state and civil society organizations need to help raising awareness about these issues so consumers demand and companies scale up their efforts for a sustainability transition.

 

State-of-Art review

Still after three UN Conferences on Sustainable Development we are increasingly facing major persistent threats, like poverty, food insecurity, climate change, ecosystems degradation, which despite being known for a few decades are still far away from being solved – or are even still increasing.

On the level of individual business, this has four major implications: increased social pressures; possible reputation damage; exposure to resource wars, and front running competitors adjusting their value chain strategies.

The business world has responded to this with various supply chain governance strategies: both ‘Do It Yourself’ -supply chain management and collaborative approaches, using third party private standards. This ISDRS Thematic Working Group creates a platform for ongoing research in the growing number of private governance initiatives in the global market, creating diverse forms of certification and third party control on implementing sustainable production modes in all steps of global supply chains. It challenges the “creating shared value”-approach, going beyond philanthropy-based CSR, as recently proposed by Porter and Kramer (Porter and Kramer, 2011). It intends, from a developing and a developed world perspective, to share assessments of the uptake and factual impacts of these mainly market based mechanisms.
It is a crucial question if this will be sufficient? At one hand we see a recent breakthrough of successful forms of market and NGO-based private certification approaches (see for an extensive review: Potts et al. 2014; Resolve, 2012; Alvarez and von Hagen 2011 & 2012; von Hagen and Alvarez 2011 & 2012). Yet, there is a critical debate on to what extend these market-based approaches do effectively create impacts at the resource side of many global value chains. These emerging supply chain governance approaches are to a large extent euro-centric (and US-centric), while calls are increasingly heart for a stronger involvement of voices from the supply side into the debates about the design and impacts of these private governance systems.

But one can take the debate also further. Imagine 2024, where will we be in 10 years? 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, critical review papers and method development addressing one or more of the issues suggested here.

Call for Papers
Next Conference

For more information:
ISDRS 2018

This theme will support the following tracks at the upcoming conference:

5d - Value chain and trade
Track chair: Dr. W.J.V. Vermeulen, Dr. V. Nelson, Dr. X. Rueda

Recent articles

Send in articles
Please send in relevant articles to the theme chairs.

Business Strategy and the Environment: Special Issue (upcoming)

Based on the 22nd ISDRS conference in Lisbon a special issue will be published early 2018

Sustainable Development: Special Issue
Sustainability through the market: the impacts of sustainable supply chain management
Editor: Walter J. V. Vermeulen and Stefan Seuring

Volume 17, Issue 5, pages 269-273, September/October 2009

Authors:

Eeva L. Laine and Matias Laine,
Hans Haake and Stefan Seuring,
Claribel Müller, Walter J. V. Vermeulen and Pieter Glasbergen,
Friederike Albersmeier, Holger Schulze and Achim Spiller,
Peter J. Ras and Walter J. V. Vermeulen


Suggested literature

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.

Potts, J., M. Lynch, A. , G.A. Huppe, M. Cunningham and V. Voora (2014) The State of Sustainability Initiatives Review 2014: Standards and the Green Economy IISD, 2014

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. (2015) Self-Governance for Sustainable Global Supply Chains: Can it deliver the impacts needed? In Business Strategy and the Environment, 24(2), pp.73–85. doi: 10.1002/bse.1804

Vermeulen, W.J.V., M.T.J. Kok, (2012) Government Interventions in Sustainable Supply Chain Governance: Experience in Dutch Front-Running Cases, Ecological Economics, Vol. 83 (2012) 183–196 .