The broad view of sustainability incorporates the concepts of economic, social, and environmental performance. The focus should be on the environmental performance component of sustainability. The focus of environmental management in the organization level to the supply chain level describes “environmental supply chain management” as the managerial integration of material and information flows throughout the supply chain to satisfy the demand of customers for green products and services produced by green processes.
Supply chains strive to maintain internal health and environmental sustainability using the capability to self-correct based on information from the external environment. As the organizations making up a supply chain become aware of customer demands for products and services provided without damage to the environment, managers will make decisions that support the integration and coordination of Green Supply Chain Management (GSCM) practices throughout the supply chain. Supply chains and organizations can gain competitive advantage by being the first to adopt environmental sustainability and implement GSCM practices emphasizes the “boundary‐spanning” role of SCM as key to the implementation of environmental strategies both downstream and upstream through the supply chain. This describes the possibility of a “green multiplier effect” resulting from the collaboration of supply chain partners concerning environmental issues cautions that transaction costs associated with interactions among supply chain partners must be considered as the partners work to improve the environmental sustainability of the supply chain.
In addition to customer requirements, environmental legislation and regulation have been identified as drivers of the adoption of green practices. There is a concern that firms may lose competitive advantage due to the increased costs from implementation of environmental sustainability guidelines conclude that there is little evidence to support the proposition that environmental regulations damage competitiveness
A number of authors have done preliminary work in developing measurement scales related to environmental sustainability raise the question of whether or not embracing environmental sustainability really pays. They do not find a strong and conclusive link between environmental sustainability practices and environmental and financial performance and call for further empirical investigation. The existing research provides some direction but remains inconclusive.
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