Reflection on the RISE Talk (Resilience, Innovation, Strategy and Ecosystems) given by Professor Chee Yew Wong from Leeds University Business School, UK on 'Sustainable Supply Chain Management, Ecosystem and Ecological Resilience: An Alternate Research Paradigm'.
Is sustainable supply chain management research heading towards building sustainable and resilient businesses and societies? In the third RISE Talk (Resilience, Innovation, Strategy and Ecosystems) on 18th November 2021, Professor Chee Yew Wong from Leeds University Business School drew on an ecosystem perspective to illustrate how supply chains (economic systems) affect the flows of nutrients and energy in social-ecological systems, which lead to ecosystem degradation, thus threatening ecological and community resilience and then proposed a new research paradigm centring on ecological resilience. Why do ecosystems and ecological resilience matter? A simple answer is, for the benefit of all, including future generations because ecosystems contain all organisms that enable a physical environment to function, thus generating necessities needed by human beings, such as water, air, fuel and food. In other words, the functioning of ecosystem depends on biodiversity, which is being degraded by human activities, pollution, greenhouse gas emission and extraction. As is evident from climate feedbacks, the severity and intensity of ecosystem degradation is heading to a tipping point of collapse.
To function, supply chains rely on the extraction of natural resources, such as fishing, farming, and mining and to some extent, the exploitation of labors. A problem of today’s supply chains is that the speed of extracting natural resources in ecosystems is faster than that of their recovery. Such persistent imbalance not only leads to ecosystem degradation but also undermines ecological resilience, which serves as the basis of all other forms of resilience. For example, our fish stock in the sea has dropped to 65% from 95% in 1990, while human’s food fish consumption has increased over 120%, in the same period of time. Where does the fish supply come from? – nowadays, significantly from farmed fish, whose production has increased nearly 600%, to meet the demand of not only feeding a growing global human population but also to feed livestock. This industrialised aquaculture production model, assisted by supply chain’s cost efficiency model, has become a fast-growing sector, thus contributing the economic growth; On the negative side, the production of aquaculture can pollute our water, spreading disease and threatening the wellbeing of wild fish populations, which damage may exceed the commercial profits companies make in fish farms of in fishing for wild fish.
Another example that benefits in terms of profitability, from supply chain’s cost efficiency model, is intensive poultry farming, which substantially reduce the cost and enhance profitability and affordability. The need to meet animal protein demand, however, requires significant quantity of soybeans, which not only add strain on soybean farming but also lead to agriculture relying on monoculture farming, in order to maintain productivity. What we have observed is that high-yielding monoculture crops encourages high use of fertilizers and pesticides, which generate negative impacts on the environment, such as degrading soil, decreasing biodiversity (e.g., killing bees), the use of antibiotics and changing the chemistry of surface water, which goes on and contaminates the seas. Furthermore, industrialized monoculture heavily depends on fossil fuels in its daily operations (e.g., long distance transportation, process tons of material, production of fertilizer and pesticide). Such an agriculture production model contributes to approximately 35% of greenhouse gas emission and at the same time cuts down the capacity (trees) to absorb carbon dioxide.
Despite these notable problems, why do we continue with the industrialized model? An easy and pervasive answer is to maintain/increase cost efficiency to feed a growing population and to reduce food poverty, plus increasing profitability knowing this will warm up the planet earth to a point of no return. This then raises the first challenge to business and management researchers, as regards how we can help to transform the existing business models and systems, by achieving a right balance between profitability and sustainability.
Beyond business and economics, what really worries us is that the global surface temperature is now 1.2 degrees Celsius warmer than the pre-Industrial age, resulting in more extreme events and disruptions. Without any intervention, the temperature is projected to increase 1.8 degrees Celsius by the year 2100, which would be disastrous in terms of the arctic melting faster, cities and countries being significantly submerged and we’ll run out of places that produce food because of droughts. There will also be more displacement of people fleeing their countries, due to famines. The scientific evidence in the IPCC shows that, human influence is being a key driver of climate change. Undoubtedly, supply chains that consume fossil fuel (e.g., coal, gas, petrol, diesel) on a large scale, have substantially contributed to these catastrophic events. Diving deeper into the root cause of why supply chains operate in the way, would seem to indicate that, it is because they are driven by GDP (Gross Domestic Product). An increase in GDP is commonly viewed as ‘good’ in the public eye due to the related increasing employment, consumption, investment, amongst others. Interestingly, human consumption in the GDP system, however, is driven by external factors (e.g., government, business, and investment) in the service of stimulating the economy, rather than by actual human needs. The problem with this approach has led to the development of economies fueled by increasing debt, thus ‘mortgaging the future’. For example, governments often print more money, issue bonds or give more credits to consumers in order to 'restore' the economy, rather than concerning real human needs. The collapse of Lehman Brothers in 2008 and other property companies in China is a good example in which investment in property market leads to many houses built without real consumers, while, however, producing pollutions and resulting in an unrealistically expensive housing market. There are many other similar cases in which you may see the high product price caused not by the real demand of consumption, but by investment-driven behaviors behind the growth. If investors who continue to fund businesses that use fossil fuels or pesticides in the extraction industry do not change, significant change seems unlikely.
Observations on Drivers for Adopting Sustainable Practices and Policies
Green drivers are those currently working, including ‘regulation & legal’ and ‘pressures from NGOs & young people’.
Soft drivers are those currently working but are less effective, including ‘brand reputation’ and ‘attract staff/shareholder’.
Red drivers are those currently proving problematic, including ‘competition’ and ‘finance & efficiency’. This is because competition may end up with more extraction of natural resources; companies only adopting sustainable practices that are economically viable.
To date, business and management research literature has done a very limited work on three areas across all drivers, including ‘brand reputation’, ‘regulation & legal’ and ‘pressures from NGOs & young people’. Thus, there are plenty rooms for business and management scholars to make contributions to this line of inquiry, particularly in ‘regulation & legal’. We can learn so much from scientists who work together in tackling climate change. For example, IPCC report (Intergovernmental Panel on Climate Change) was formed approximately in the 1980s, as a result of one presentation in UN, indicating that greenhouse gas emission from burning fossil fuel can increase the global surface temperature. Since then, a group of scientists collected data from the field and provided evidence to support the fact that carbon dioxide is linked to global warming and human activities increases carbon dioxide emission. They, however, faced a serious challenge from the lobbies and fossil fuel companies back in 1990. Despite these challenges, scientists from different countries continue to work hard together, producing a number of powerful reports: IPCC TAR 2001 – consensus on global warming, IPCC AR4 2007 – unequivocal warming and IPCC AR5 2014 – irreversible impacts, which announced that, global warming was irreversible, if there were no policies put in place. Policies from previous COP meetings did not actually do enough to slow down climate change, which is why we are still seeing an increase in the global surface temperature. There is a tipping point from which there is no reverse, when crossing the point (e.g., ice sheets) and the process of reaching the tipping point has already started.
How can our research contribute to real change in sustainability and resilience?
Although addressing this question is not straightforward, we can attempt to explore questions, such as
How can fossil-fuel companies stop producing fossil fuels?
How can companies drive sustainable consumptions?
How can buying countries help low-income countries to develop (supply products) without reliance on fossil fuels and extraction models? For example, pollution is generated by products manufactured in a low-income country with fossil fuel and exported to the buying country. It seems that the low-income countries are significant polluters, however, there is no decomposable relationship with the buying country, which originates the product demand.
How can our research inform CEO, business leaders, governmental policy (like IPCC)?
Drawing from previous discussion, Professor Wong proposed a new research paradigm, focusing on ecological resilience, in the hope of driving the positive change. More specifically, the new paradigm has mapped out in accordance with seven areas in the existing paradigm in business and management research, including,
Aims: restore ecological resilience, society & wellbeing
Economic models: new economic model, regenerative
Publication: inform positive change
Theories & data: new theories, new data
Inform: system-level (radical change to economic models)
Research: field studies, advocate
Research teams: inter-disciplinary research team with many researchers across the globe
A final conclusion is calling for immediate research action to restore ecological resilience for sustainable development.
How to cite: You, J. J. 2021. 'Why does ecological resilience matter for sustainable supply chain management and practice?’. RISE Talk, 29 November [Blog]. Available at https://www.jacquelineyou.com/post/why-does-ecological-resilience-matter-to-sustainable-supply-chain-management-and-practice (Accessed date).
This blog expresses the author’s views and interpretation of comments made during the talk. Any errors and omissions are the author. Dr. Jacqueline You is an ESRC Postdoctoral Fellow at Durham University Business School, UK. Her interdisciplinary research focuses on organizational resilience and disruption in the context of business ecosystems. Prior to entering into academia, she worked for multinational corporations, primarily in the department of global supply chain networks and strategic procurement in China, the US, Canada and France and then, as an international entrepreneur based in the UK.
RISE Talk (Resilience, Innovation, Strategy and Ecosystems) is an academic initiative funded by the Economic and Social Research Council (ESRC) and hosted by the Centre for Innovation and Technology Management (CITM), Durham University Business School, in partnership with the Global Citizenship Programme, Ustinov College.The aim is to facilitate an interdisciplinary discussion and exploration of how conventional theories inform our understanding of the phenomenon of RISE and how the role of RISE can help to address the pressing and complex issues faced by business and society, including governance and systems for sustainable development.