Edited by Paul Martin and Amanda Kennedy
Chapter 12: Private environmental enforcement: using supply chain requirements to achieve better environmental outcomes
Complex, multi-level international supply chains are now an integral part of the world economy. For example, large retailers may purchase many of their products from companies in China, India or other countries where the cost of manufacturing is lower than in the retailer’s home country. Similarly, automobile manufacturers today source parts from many countries rather than manufacturing the parts themselves or buying them from local parts manufacturers. As companies, especially in the United States and the European Union, have increasingly outsourced manufacturing or moved manufacturing offshore, these operations have become for the most part beyond the reach of national environmental laws. The facilities may be located in countries that have either weak environmental laws or weak enforcement of environmental laws. National governments typically have little leverage over the extra-territorial operations of multinational companies. Further, aspects of product manufacturing, including greenhouse gas emissions, energy use, and reuse or recycling design requirements, remain outside the regulatory system even in countries with sophisticated programs. Thus, as nations increasingly focus on sustainability as a societal goal, achieving better environmental outcomes is more and more dependent upon private regulatory and enforcement mechanisms to drive environmental conduct. As products or parts are sourced from often distant locations, companies find that they need to focus on management of their supply chain to assure product quality and protect their reputation, among other concerns. These supply chain concerns also extend to environmental attributes of products or parts.
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