Written by Ling Li, PhD student, Kelley School of Business
On October 19, 2024, the Foster School of Business at the University of Washington and the Kelley School of Business at Indiana University collaboratively hosted the Third Annual Symposium on Environmental and Social Sustainability in Supply Chains. Building upon the success of the previous two symposiums held in 2022 and 2023, this symposium convened distinguished academic scholars and industry practitioners to deliberate on innovative advancements, disseminate critical insights, and emphasize the imperative for collaborative endeavors to address pervasive sustainability challenges on a global scale. Click here for the full program.
Making Hard Decisions in Sustainable Operations
Professor Charles Corbett explored the intricacies of sustainable decision-making, demonstrated by three recent projects. The first project delved into how context effects, such as attraction and compromise effects, influence decisions based on information from life-cycle assessments (LCA) studies. The second project examines how procurement managers think about trade-offs between reducing carbon footprint or water usage in their supply chain, and whether that interacts with a preference for environmental burdens to be local or far away. The third project is a survey of Los Angeles homeowners highlighted that those who took a satisficing approach were more likely to install rooftop solar panels compared to those aiming to optimize every detail. Overall, he emphasizes the research opportunities in understanding how people make sustainability-related decisions and how people should make such decisions.
Bridging the Gap: Making Sustainability Good Business
Samantha Wai presented strategic methodologies for embedding sustainability into the core business operations at Costco. She posited that sustainability should be perceived not merely as a social responsibility but as a strategic business imperative. Wai delineated Costco’s sustainable sourcing initiatives, such as providing premium payments for ethically sourced cocoa, which fortify supplier relationships and ensure regulatory compliance. Additionally, she addressed prevalent challenges, including supply chain transparency, regulatory pressures, and evolving consumer behaviors. To overcome these obstacles, Wai advocated for enhanced data management and collaborative efforts to improve traceability and accountability within sustainable supply chains.
Applying Design Thinking to Enhance Best Practices in Sustainability
Professor Aleda Roth highlighted a limitation in most sustainability practices: they tend to be functional in focus, tackling specific areas without broader integration. She argues for a shift toward a design-thinking, multi-functional approach that brings together diverse perspectives and expertise. This approach, she suggests, could lead to more comprehensive and impactful sustainability initiatives. By moving beyond functional silos, organizations can unlock richer, more holistic solutions that address sustainability in a meaningful and interconnected way.
ESG Regulatory Requirements and the New World of Double Materiality, Social Due Diligence and Remedy
Professor Anita Ramasastry examined the evolving landscape of ESG (Environmental, Social, and Governance) regulations, with a particular focus on mandatory human rights due diligence within global supply chains. She discussed the transition from voluntary compliance to mandated regulations, especially under emerging European Union directives that require corporations to identify, prevent, and mitigate social and environmental risks associated with their operations. Furthermore, Professor Ramasastry introduced the concept of “double materiality,” wherein organizations must evaluate both financial and societal impacts, presenting novel compliance challenges. She advocated for the development of comprehensive frameworks to guide corporations through these complexities, emphasizing the necessity for standards that bridge the governance gap in human rights and sustainability.
Modeling Strategic Sustainability in Supply Chains
Professor Jeannette Song investigated the strategic integration of sustainability within multi-tiered supply chains, emphasizing efficiency, compliance, and resilience. She contrasted traditional supply chain models, which prioritize cost minimization and demand fulfillment, with contemporary frameworks that incorporate environmental and social responsibilities. Professor Song’s research highlighted the role of advanced data-driven and digital solutions in reducing waste and optimizing processes. She discussed practical applications such as blockchain technology for fresh produce tracking and smart contracts to minimize waste, alongside the challenges of ensuring supplier compliance with safety and labor standards. Ultimately, Professor Song proposed that sustainable supply chains necessitate adaptive compliance frameworks supported by third-party verifications, tailored scorecards, and tier-specific investment strategies to foster long-term sustainability.
Net Zero by 2040: The Roadmap to Net Zero at Alaska Airlines
Scott Coughlan delineated Alaska Airlines’ comprehensive roadmap to achieve net zero carbon emissions by 2040. As a signatory to the Climate Pledge, Alaska Airlines is implementing several strategic initiatives, including a 10% transition to sustainable aviation fuel (SAF) by 2030, enhancing operational efficiency, renewing its fleet, and investing in emerging technologies such as electric and hydrogen-powered aircraft. Additionally, Coughlan detailed efforts to minimize waste through the reduction of single-use plastics, attainment of a 70% in-flight recycling rate, and significant investment in electric ground equipment to decrease emissions from the airline’s extensive ground service fleet. He acknowledged the challenges posed by the high cost and limited production of SAF but underscored the company’s commitment to forging partnerships and engaging in industry-wide advocacy to advance sustainable aviation practices.
Competitive Industry’s Technological and Market Response to Environmental Taxation
Professor Anton Ovchinnikov investigated the effects of environmental taxation on the adoption of green technologies within competitive markets. His research challenges the conventional assumption that environmental taxes uniformly encourage the uptake of sustainable technologies. Instead, Professor Ovchinnikov found that under certain conditions, particularly in markets with high demand elasticity, increased taxes can inadvertently favor less sustainable alternatives. This occurs because the substantial fixed costs associated with cleaner technologies become a barrier when demand decreases due to higher taxes. To address this issue, he recommends a strategic combination of taxes and subsidies, tailored to the specific market dynamics and demand responsiveness.
Panel: Charting the Uncharted
Panelists: Charles Corbett, Anton Ovchinnikov, Aleda Roth, Jeannette Song.
In this panel, the discourse centered on the evolving challenges and opportunities within the field of operations management. Panelists underscored the critical importance of bridging the gap between academia and industry by engaging practitioners, policymakers, and stakeholders early in the research process to ensure that studies are aligned with real-world issues. Moreover, they emphasized that operations management research must balance academic rigor with accessibility, relevance, and practical impact. Additionally, the panel explored the role of technology and artificial intelligence in advancing research, while cautioning against potential ethical and environmental concerns, such as the sustainability of data centers and the concealed labor involved in AI development. Overall, the discussion highlighted the necessity for interdisciplinary collaboration, innovative dissemination methods, and responsiveness to societal needs to maintain the field of operations management as both impactful and forward-looking.
The Third Annual Symposium on Environmental and Social Sustainability in Supply Chains facilitated a dynamic exchange of ideas among scholars and industry professionals. As sustainability remains a pivotal concern for global supply chains, such collaborative platforms are indispensable for driving meaningful progress and fostering innovation.