Measuring Sustainability Performance: A Green Supply Chain Index

Abstract:In an age of climatic shifts and environmental degradation, globalization and expanding supply chains are rapidly changing operational and market dynamics. Yet, how are green supply chains dimensioned as a combination of activities and practices? What phases of the supply chain can be most easily improved by adopting a green philosophy? If a company has not yet adopted a green philosophy, what stages of its supply chain can be most likely improved? This article proposes an industry framework to index and benchmark green "environmentally sustainable" supply chains. We use 21 managers and senior executives across 12 firms to derive and validate the index variables and parameters. Data from our observations and interviews allow us to derive the Green Supply Chain Index (GSCI). The comprehensive GSCI creates a baseline on which companies can measure their green supply chain performance. This article serves as a starting point for benchmarking organizational GSC initiatives and their downstream effects on organizational performance addressing requisite incentives and penalties. The index can serve as rudimentary templates for research and practices as we seek to decipher various operational and performance aspects that distinguish between green-washing and greening while offering greater scrutiny into a rapidly changing and environmentally-conscious world.