An environmental, social, and governance strategic model for managing pharmaceutical supply chains with financial obstacles

Abstract

This study presents an environmental, social, and governance (ESG) strategic model to manage pharmaceutical supply chains with financial obstacles. ESG environmental, social, and governance research can help managers make informed decisions so that managers can better choose the corresponding operating strategies, pay attention to environmental protection, and actively fulfill social responsibilities. We consider matching strategies between manufacturers and retailers by classifying them into no matching, decentralized matching, and centralized matching strategies between manufacturers and retailers. Under the matching strategy, we consider the decentralized ESG operation strategy and centralized ESG operation strategy, divide the decentralized ESG strategy into a supplier-dominant mode (SD), manufacturer-dominant mode (MD), and retailer-dominant mode (RD), and study the optimal decision-making methods of supply chain members in different modes. The innovation of this study lies in (1) considering financing constraints; (2) the impact of indicators on society and the environment; (3) no matching strategy, decentralized matching strategy, and considerations of centralized matching strategy; (4) decentralized and centralized strategies under relevant ESG indicators to improve the accuracy of the model; (5) the decentralized ESG operation strategy is divided into a supplier-dominant mode (SD), manufacturer-dominant mode (MD), and retailer- dominant mode (RD); and (6) Applying the ESG strategy to Pharmaceutical supply chain Management. The different models are compared and analyzed to find the equilibrium strategy and the optimal solution under different models. Through various analysis, we found that integrating a pharmaceutical supply chain and the ESG governance strategy can effectively promote the innovation of the industrial chain supply chain. A supply chain matching strategy is more effective in managing a supply chain than a no-matching strategy and can improve the financing efficiency of capital-constrained manufacturers. In the matching strategy, centralized matching can better attract consumers who prefer green and “double carbon” products than decentralized matching. Under the lower level of green investment, the centralized ESG governance strategy can better contribute to developing the pharmaceutical supply chain.