Can we have it all? Sustainability trade-offs and cross-insurance mechanisms in supply chains

Abstract

PurposeThe study investigates the interaction of sustainability dimensions in supply chains. Along with the analysis of sustainability trade-offs (i.e. prioritizing one dimension to the sacrifice of others), we develop and test the concept of cross-insurance mechanism (i.e. meeting of one sustainability goal possibly attenuating the effects of poor performance in another).Design/methodology/approachThrough the analysis of a 20-variation vignette-based experiment, we evaluate the effects of these issues on the corporate credibility (expertise and trustworthiness) of four tiers of a typical food supply chain: pesticide producers, farmers, companies from the food industry and retail chains.FindingsResults suggest that both sustainability trade-offs and cross-insurance mechanisms have different impacts across the chain. While pesticide producers (first tier) and retail chains (fourth tier) seem to respond better to a social trade-off, the social cross-insurance mechanism has shown to be particularly beneficial to companies from the food industry (third tier). Farmers (second tier), in turn, seem to be more sensitive to the economic cross-insurance mechanism.Originality/valueAlong with adding to the study of sustainability trade-offs in supply chain contexts, results suggest that the efficiency of the insurance mechanism is not conditional on the alignment among sustainability dimensions (i.e. social responsibility attenuating social irresponsibility). In this sense, empirical evidences support the development of the cross-insurance mechanism as an original concept.

Modern slavery in supply chains: insights through strategic ambiguity

“…However, sustainability reporting may not correlate with firms' actual commitment (Tate et al , 2010). Reputation management suggests that firms report only positive attributes to stakeholders (Elsbach, 2003; Elsbach et al , 1998; Nath et al , 2020), yet studies also show, perhaps counterintuitively, that firms can downplay their achievements to protect their reputation (Kim and Lyon, 2015; Nunes et al , 2020; Testa et al , 2018), particularly where the lack of supply chain transparency could obscure risks that lay firms open to claims of corporate hypocrisy (Glover and Touboulic, 2020; Wagner et al , 2020).…”

Synergistic Interactions of SDGs in Food Supply Chains: A Review of Responsible Consumption and Production

“…Even though this has been explored in the literature through the three dimensions of sustainability, there is still the issue of the interconnections between SDGs and food production and, due to its impact on hunger and malnourishment [22], these problems do not appear to be mitigated further. One of the likely rationales could be the differing stakeholder goals [23] and given that sustainable food production and consumption can contribute positively towards multiple SDGs [4], it raises specific perspectives that have never been investigated systematically. To our knowledge, there has not been a systematic compilation of these SDGs within the context of FSCs; therefore, this study aims to identify and ascertain the impact of these relationships between SDGs.…”

Operations adding value to society

“…Fracarolli Nunes, Lee Park and Paiva (2020) ask the important question of “Can we have it all?” when examining “Sustainability trade-offs and cross-insurance mechanisms in supply chains”. The focus on insurance and cross-insurance mechanisms in corporate social responsibility is certainly novel and adds to the estimation of corporate credibility and reputation.…”