The Greening of Global Value Chains: Insights from the Furniture Industry

Abstract

With increasing fragmentation of production between independent firms that are spatially dispersed and are responsible for different steps of the production process, a Global Value Chain approach is employed to examine how ‘lead firms’ shape the green features of upstream activities. Comparative case studies in the Italian furniture industry (Ikea, Valcucine) are used to show that lead firms implement ‘hands-on’ governing mechanisms to improve the environmental performance of their value chain partners — moving away from the market but still avoiding vertical integration — but also ‘hands-off’ mechanisms embedded in standards and design. Two governing approaches to the greening of value chains are identified: standard-driven and mentoring-driven, and these are used to provide some reflections on when we are likely to observe one or the other, and also to develop a future research agenda.

Environmental Upgrading in Pakistan’s Sporting Goods Industry in Global Value Chains: A Question of Progress?

“…Empirical definition of environmental upgrading is it "occurs when a firm, within a particular GVC, improves its environmental performance through changes in technological, social and organizational processes and by extension avoids or reduces its overall environmental impacts" (Khattak et al, 2015, p. 331). A limited number of research has been conducted so far and all are exploratory in nature with the aim to understand the construct of environmental upgrading along with its processes and core dimensions in GVCs (see De Marchi, Di Maria, & Micelli, 2013;De Marchi, Di Maria, & Ponte, 2013;Goger, 2013;Khattak & Stringer, 2016;Khattak et al, 2015;Poulsen, Ponte, & Lister, 2016). All these researchers emphasize the role of lead firms in environmental upgrading in GVCs, which supports our view that governance mechanisms are crucial factors influencing upgrading.…”

Environmental upgrading of apparel firms in global value chains: Evidence from Sri Lanka

“…Governance clearly affects a firm's ability to sustain efficient and clean production systems (Pickles, 2010). Recent studies have also found that lead firms play a critical role in the environmental upgrading of suppliers in GVCs (see De Marchi et al, 2013a, 2013bGoger, 2013;Khattak, 2013), highlighting the significant role of governance mechanisms in GVCs.…”

“…In turn, firms participating in GVCs have begun to comply with environmental norms in order to increase their competitiveness (Kumar et al, 2011). There is, however, a scarcity of research on the process of environmental upgrading in GVCs generally (De Marchi et al, 2013a, 2013b, and specifically in the apparel industry (Khattak, 2013).…”

Sustainable resource governance in global production networks – challenges for human geography

“…The traditional approach to externalize environmental costs related to resource extraction and processing, initially seen as a risk minimization strategy, increasingly turns into an economic risk as environmental (and social) standards rise globally, or, maybe more frequently, as ecologically harmful practices are scandalized by NGOs and the media. The GVC literature is more explicit in respect of changes in product design and production processes that contribute to the "upgrading" of GVC as a result of pressure by external stakeholders, including customers (De marchi et al 2013 a and2013b;riisgaarD et al 2010). However, such changes tend to be interpreted as a reactive process in which firms recognize and use the pressure to adapt as an opportunity to gain pioneer advantages.…”