Integrating sustainable development in the supply chain: The case of life cycle assessment in oil and gas and agricultural biotechnology

Abstract

It is widely accepted that firms play an important stewardship role in addressing sustainable development concerns. A key challenge in this role is to balance the often conflicting pressures created by sustainable development—firm‐level economic performance versus environmental degradation and social disruption. Drawing on complexity theory, risk management, stakeholder theory and the innovation dynamics literature, we discuss the problems of integrating sustainable development concerns in the supply chain, specifically the applicability of life cycle assessment (LCA). Many authors have emphasized the importance of the “cradle to grave” approach of LCA in optimizing closed‐loop supply chains, improving product design and stewardship. Based on two case studies (an agricultural biotechnology and an oil and gas company) with supporting data collected from key stakeholders, we argue that sustainable development pressures have increased complexities and presented ambiguous challenges that many current environmental management techniques cannot adequately address. We provide a framework that addresses these deficiencies and discuss implications for practitioners and management theory.