Green Retailing: A New Paradigm in Supply Chain Management

Introduction

Over the last three decades, sustainable development with ecological protection has gained the global significance due to a number of factors like global warming, resource depletion, water pollution, carbon emission, soil erosion and so on. Previously, the environment has been highly affected by the firms’ profit maximization objective without considering the environmental concerns and government’s negligence about environmental policy. The world has experienced dire consequences of these myopic measures several times. ‘Bhopal disaster,’ one of world’s largest chemical industrial accidents in 1984, took around 5200 lives (Bhopal Gas Tragedy Information report). This tragic incident occurred due to the chemical gas leak from a pesticide plant in Bhopal managed by Union Carbide India Limited. The explosion at the Chernobyl nuclear power plant of former USSR in 1986 brought life threatening challenges to the civilization (IAEA report, 2006). The release of radioactive material from a nuclear reactor jeopardized the livelihood. In 2010, Oil spill in the Gulf of Mexico caused extensive damage to wildlife habitats (Gulf Oil Spill report). These catastrophes impel governments, organizations, different official bodies to pay attention in designing a suitable policy taking both economic development and environmental sustainability into account. An example of increasing level of green activities is presented in Figure 1 which depicts the growth of the global investment in renewable energy sources over the years (Eyraud & Clements, 2012).

Figure 1.

Growth of global investment in renewable energy sources

Different nations and organizations have employed various policy measures to combat with environmental challenges. Several countries have adopted ‘carbon trading’ scheme to reduce emission. i.e. A regulatory mechanism where firms or countries buy and sell carbon permits (Lazarowicz, 2009). The programmes like “Pollution Prevention Pays” (3P) 3M and “Waste Reduction Always Pays” (WRAP) initiated by 3M and DOW, respectively indicate that the firms have recognized the importance of environmental friendly practices (Segerson and Miceli, 1998). Problems like resource marginalization, toxic waste overflow, increasing pollution level have become matters of concern for all the players within and outside the boundary of the supply chain. These circumstances inevitably give rise to the idea of green supply chain management. It emerges from environmental science and supply chain management. Srivastava (2007) defines green supply chain management as ‘integrating environmental thinking into supply-chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumers as well as end-of-life management of the product after its useful life.’ The scope of green supply chain management ranges from green purchasing of raw material to the design and the sale of green final product. The design of a green supply chain management encompasses the product design incorporating the environmental issues related to the product safety, pollution prevention, minimization of resource depletion, and waste management. Green procurement demonstrates the importance of raw material suppliers’ adherence to the sustainable policies. These policies can be voluntary or imposed by the regulatory measures. Green manufacturing relates to the usage of the pollution free proper resource which will cause a minimum level of pollution and thus producing the environment friendly products.