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Can Integrate a Sustainable Business Model and Global Value Chains Revive the Value Chain’s Sustainable Growth?

Author

Listed:
  • Li Yuan

    (University of Helsinki)

  • Jukka Mähönen

    (University of Helsinki
    University of Oslo)

Abstract

Traditional value chains link factors of production and production to final consumption, adding economic value. To reduce the negative effects of the value chain on the environment and societies, the sustainable business model must be integrated into all parts of the global value chain. This necessitates responsible production and procurement, but all participants must recognise the importance of reusing resources, increasing the product life cycle, and minimising waste. However, this does not imply that all value chain participants in the value chain have equal responsibilities, as they have varying degrees of dominance, interests, and environmental and societal impact in their value chain-related activities. We claim that regional trade agreements are the key to balancing each other’s interests in an international value chain, assisting participants in reaching a consensus. On the other hand, existing regional trade agreements have flaws in how they distribute value. Furthermore, their standard-setting does not contribute to developing a sustainable global value chain because it ignores the impact of the sustainable business models of value chain participants on the global value chain. So, the article will focus on reconstructing global value chains by introducing a sustainable business model and using regulatory incentive systems to guide value chain participants in fulfilling corporate social and environmental responsibilities. As a result, this article discusses how a sustainable business model can aid in developing the global value chain in a sustainable direction, as well as how regulation can help.

Suggested Citation

  • Li Yuan & Jukka Mähönen, 2024. "Can Integrate a Sustainable Business Model and Global Value Chains Revive the Value Chain’s Sustainable Growth?," Circular Economy and Sustainability, Springer, vol. 4(4), pages 2957-2980, December.
    • Handle: RePEc:spr:circec:v:4:y:2024:i:4:d:10.1007_s43615-024-00352-y
    DOI: 10.1007/s43615-024-00352-y
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    References listed on IDEAS

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