Recycling decision and corporate social responsibility implement for closed-loop supply chain considering green design under EPR policy

Abstract

The extended producer responsibility (EPR) policy requires producers to focus on the green design of front-end products and the recycling of end-of-life waste products at the same time and fulfill dual environmental responsibilities. Under this background, we study the recycling decision and corporate social responsibility (CSR) implementation for closed-loop supply chains (CLSC) considering green design under EPR policy. We build game models of CLSC under six situations, and analyze the interaction between the manufacturer's green design behavior and the retailer's CSR behavior, along with their influence on recycling decisions and the operational performance of CLSC. We show that both the manufacturer's green design behavior and the retailer's CSR behavior are beneficial to improving social welfare and the other party's profits, but a higher level of green design is uneconomical for the manufacturer. Similarly, a higher CSR awareness is not conducive to retailer's profitability. We also find that under the influence of the government's “Tax-Reduction-Subsidy” policy, the selection of the optimal recycling channel is influenced by factors such as the difficulty of recycling waste products, government subsidies, and the profit of unit reprocesses from the perspective of maximizing supply chain member's profits.