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Financial benefits of reimagined, sustainable, agrifood supply networks

Author

Listed:
  • Tracy Van Holt

    (Henry Kaufman Management Center)

  • Martin Delaroche

    (University of Indiana at Bloomington)

  • Ulrich Atz

    (Henry Kaufman Management Center
    Henry Kaufman Management Center)

  • Kevin Eckerle

    (Henry Kaufman Management Center)

Abstract

Multinational enterprises face challenges to integrate the UN’s Sustainable Development Goals into their supply chains because it requires cooperation outside of their direct control. In global agrifood value networks, companies struggle to engage their suppliers in sustainability. One reason is that key intermediaries, the offtakers, have not been engaged in sustainability strategies in a way that is economically feasible, and thus fail to act as a cooperating link. We developed and applied a return on sustainability investment (ROSI) model of a more strategic supply-chain approach for food commodities (one that values partnerships over transactional relationships). We modeled the coconut supply network in the Philippines, and compared these findings to another agrifood system, Brazilian beef. Categories of benefits included: a stable and sustainable supply chain, long-term contracts, sustainable products, brand value and innovation, and reduction of corporate risk. In addition to the benefit of working with MNEs as a strategic partner, incremental benefits prioritized by stakeholders included intangibles that could generate value from cost savings, avoided costs, as well as new revenue opportunities to establish a more stable sustainable supply chain. Monetizing benefits to offtakers can help incentivize a new type of global value chain governance to a closed, more stable supply-chain configuration that can better address complex social–environmental dynamics, and foster strategic partnerships.

Suggested Citation

  • Tracy Van Holt & Martin Delaroche & Ulrich Atz & Kevin Eckerle, 2021. "Financial benefits of reimagined, sustainable, agrifood supply networks," Journal of International Business Policy, Palgrave Macmillan, vol. 4(1), pages 102-118, March.
    • Handle: RePEc:pal:joibpo:v:4:y:2021:i:1:d:10.1057_s42214-020-00096-0
    DOI: 10.1057/s42214-020-00096-0
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    4. Rob Van Tulder & Suzana B. Rodrigues & Hafiz Mirza & Kathleen Sexsmith, 2021. "The UN’s Sustainable Development Goals: Can multinational enterprises lead the Decade of Action?," Journal of International Business Policy, Palgrave Macmillan, vol. 4(1), pages 1-21, March.

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