Incorporating impoverished communities in sustainable supply chains

Abstract

PurposeThe purpose of this paper is to explore recent calls to include social and environmental considerations in supply chains by analyzing the sourcing of raw materials from impoverished communities to reduce environmental impacts and social exclusion in biofuels production.Design/methodology/approachA case study methodology based on interviews and focus groups with supply chain members and other stakeholders is conducted in Brazil, a major biofuels producer and user. Two supply chain cases, fuel ethanol and biodiesel, illustrate the challenges of recent government policies and industry attempts to improve sustainability within the supply chain.FindingsAlthough government and industry recognize the importance of providing opportunities for impoverished communities in biofuels supply chains, there remain considerable pressures to economize at the expense of sustainable supply chain policies. Sourcing from impoverished farmers who lack basic business knowledge, and distrust industry and government policy, compound these challenges.Research limitations/implicationsWhile sustainability research now emphasizes the importance of considering interactions among economic, environmental, and social parameters, little is known about integrating poorly educated, impoverished farmers within supply chains. Basic business education is needed, and further research should explore entrepreneurial dynamics within impoverished communities.Practical implicationsSupply chain managers should acquire skills for engaging with impoverished farmers lacking formal education. Cooperatives can bridge knowledge asymmetries between buyers and suppliers, but will require support from industry if sustainable supply chain policies are to succeed.Originality/valueMost sustainable supply chain scholars acknowledge the importance providing opportunities for impoverished communities, but few have explored how potential entrepreneurs from impoverished communities can participate as productive supply chain members.