Sustainable Supply Chain Management Diffusion in the Palm Oil Supply Chain: A Trader PerspectiveCarlo Wessel

4. August 2020

Sustainable supply chain management unites the three dimensions of sustainable development (social, environmental, and economic) with supply chain management, aiming to produce and distribute more sustainable products. In light of globalization, supply chains have become increasingly complex and are known to cause negative externalities further upstream. This is especially the case for the supply chains of multinational corporations, whose operations often include many sub-tier suppliers outside of their scope of interaction. The palm oil supply chain has been observed to contain complex sourcing networks with sustainability issues such as deforestation and exploitation of workers, making it a relevant supply chain to investigate. 

This thesis aims to explore how diffusion of sustainable supply chain management practices occurs in the palm oil supply chain. This is done through researching the case study of the trader and processor of palm oil, the Archer Daniels Midland Company, which serves as an example between suppliers at the origin of the product and producers of consumer goods utilizing palm oil. Detailed observations are made regarding the mechanisms, actors, and stakeholders that contribute to the diffusion process in order to understand how successful sustainable supply chain management practices can be diffused. This thesis builds a framework and model to depict and summarize the diffusion process, which from an institutional perspective, consists of various stakeholder pressures and the work that particular actors and stakeholders engage in. Non-governmental organizations, consultancies, and multi-stakeholder initiatives are key actors that were identified to drive the diffusion of sustainable supply chain management practices.