Environmental Sustainability Initiatives in the Agrifood Supply Chain

Introduction

The current economic climate has resulted in companies taking more decisive action in addressing their business performance and identifying sources of waste. In Europe, companies revise their strategies/policies to address potential economic problems as well as changes in national and EU environmental policies. As most organisations rely on some form of supply chain for provision of their goods and services, the sustainability dimensions is one area that needs to be addressed. This is apparent in the case of the Agrifood Sector, responsible for a large environmental impact which extends from credence attributes – physical and process related, as well as transportation and distribution channels. The agrifood chain sector is responsible for a large environmental impact (Dutaur and Verchot, 2007; Prather et al., 2001; Reicosky et al., 1999). It is currently heavily dependent on non-renewable energy resources and on the use of chemicals for profitable production (West and Marland, 2002). In this situation, a new and more sustainable approach to food production has been developing supported by integrated and efficient production systems, allowing the transformation of agricultural products and delivery to final consumers with a lower use of natural resources, and with lower pollution levels (Mosier et al., 2006). In Europe, the agrifood sector is responsible for about 30% of all carbon emissions from economic activities (UNEP-DTIE, 2011). Within this sector, it has been estimated that agriculture contributes about 49% of the GHG emissions from the food supply chains of the EU, consumer preparation and food consumption accounts for 18% and manufacturing for 11% of emissions. Reducing emissions from food transport has been a significant trend among retailers through using logistical arrangements such as backhauling and pooling to improve efficiency (Garnett, 2003). A generic input/output model summarising the environmental impact of Agrifood supply chains is introduced in Figure 1.

Figure 1.

An input/output model for the environmental impact of agrifood supply chains

In the centre, we have the supply chain operations. At each stage, we have different types of inputs necessary for operations such as growing, processing and transporting while on the other side we have the outputs as the unavoidable externalities which are growing as inputs increase.

Review Of Literature

Growing environmental, social and ethical concerns as well as increased awareness of effects of food production and consumption on the natural environment have led to increased pressure from consumer organisations, environmental advocacy groups, and policy makers to agrifood companies to deal with social and environmental issues related to their supply chains within product lifecycles, from ‘farm to fork’ (Vachon and Klassen 2006; Welford and Frost 2006; Courville 2003; Weatherell et al. 2003; Ilbery and Maye 2005; Maloni and Brown, 2006; Matos and Hall 2007). Stakeholders demand corporate responsibility to go beyond product quality and extend to areas of labour standards, health and safety, environmental sustainability, non-financial accounting and reporting, procurement, supplier relations, product lifecycles and environmental practices (Bakker and Nijhof, 2002; Waddock and Bodwell 2004; Teuscher et al. 2006). Sustainable supply chain management expands the concept of sustainability from a company to the supply chain level (Carter and Rogers, 2008) and should provide companies with tools for improving their own and the sector’s competitiveness, sustainability and responsibility towards stakeholder expectations (Fritz and Schiefer, 2008). Principles of accountability, transparency and stakeholder engagement are highly relevant to sustainable supply chain management (Waddock and Bodwell 2004; Teuscher et al. 2006; Carter and Rogers 2008). The impact of consumer demand to the environmental efficiency of the agrifood sector is given in Figure 2. In response to stakeholder pressures for transparency and accountability, agrifood companies need to measure, benchmark, and report sustainability performance of their supply chains, whilst policy makers need to measure the performance of sectors within the supply chain context for effective target setting and decision-making.