Social Sustainability Dilemma: Escape or Communicate? Managing Social Risks Upstream of the Bioenergy Supply Chain

Abstract

Supply chain risk management has been well researched over the years. However, management of social risks in bioenergy supply chains has been studied less in contemporary research. The ability of bioenergy companies to identify, properly address, and communicate social sustainability has become crucial for many global producers. In order to meet current EU’s energy and climate targets, the development of sustainable bioenergy production is vital. However, over last decade, research of bioenergy production supply chains has indicated that upstream areas of global bioenergy production systems are vulnerable in terms of social sustainability risks. The main objective of this research was to demonstrate how the socially sustainable supply chain practices in bioenergy supply chains can help a production company manage social risks and resources-use related conflicts upstream of the supply chain. These practices can be applied in the process of negotiation between bioenergy producers, local authorities, and communities for creating win-win situations for all parties while planning new bioenergy production systems. This study pays special attention to social sustainability risks at the upstream of the supply chain in countries of raw material origin. Use of social sustainability practices intends to help identify, assess, and address social risks of supply chain activities for bioenergy companies. Moreover, such practices aim at supporting companies and their stakeholders in making right choices and preparing effective strategies ahead of time. We based our research on empirical evidence and offer solutions to multi-national bioenergy production companies on how to manage social risks, allowing them to make the right decisions and necessary adjustments before entering potential markets. Our findings show that even avoidance of market entrance can carry sustainability-related social risks for both the company and the local communities. We suggest that although the financial element plays an important role in decision-making, the no-go decision often means missed opportunities for local communities to improve their respective sustainability states.

Keywords

• socially sustainable supply chain
• use of resources and social risks
• bioenergy supply chains
• upstream
• stakeholder involvement