Sustainability Theories, Systems Thinking and Strategic Alignment

Introduction and context

Sustainable supply chain management (SSCM) concerns the design and governance of flows of materials, information, finance, risks and impacts across suppliers, focal firms, logistics providers, customers and post-consumer systems. It extends conventional supply chain management beyond cost, quality, speed and service to include environmental integrity, social well-being and long-term economic viability.

The supply chain is a particularly important unit of analysis because many sustainability impacts occur outside the focal organisation. A manufacturer may report efficient production while depending on suppliers that use carbon-intensive energy, expose workers to unsafe conditions or cause water pollution. Similarly, a logistics decision that lowers transport cost may increase emissions, congestion and local air pollution. Sustainability therefore requires an understanding of interdependence, not merely isolated operational improvement.

This chapter develops five complementary theoretical perspectives—stakeholder theory, institutional theory, legitimacy theory, the natural-resource-based view and systems thinking. It then shows how these perspectives can be used to map supply-chain relationships, identify material sustainability priorities and align them with corporate and competitive strategy.

Learning objectives

By the end of this chapter, you should be able to:

1. Explain the logic and managerial relevance of five sustainability theories.
2. Distinguish stakeholder, institutional and legitimacy pressures.
3. Apply the natural-resource-based view to sources of competitive advantage.
4. Map supply-chain interdependencies, feedback loops and unintended consequences.
5. Prioritise sustainability issues using materiality and risk considerations.
6. Align sustainability objectives, capabilities, performance measures and governance with business strategy.
7. Critically evaluate the limitations and ethical implications of sustainability frameworks.

1. Sustainability as a strategic supply-chain issue

A supply chain is not simply a linear sequence from supplier to customer. It is a network involving multiple tiers, shared infrastructure, regulators, communities, ecosystems and reverse flows. Decisions about product design influence material extraction, manufacturing requirements, transport demand, product use and end-of-life recovery. These stages may be separated geographically and organisationally, but they remain connected through physical, financial and informational relationships.

Three features make sustainability strategically significant:

• Externalities: Some costs, such as pollution or worker injury, are imposed on society rather than reflected immediately in the market price.
• Extended accountability: Customers, regulators and investors increasingly expect firms to manage impacts beyond their own facilities.
• Interdependence: Improving one performance dimension may worsen another. For example, emergency air freight can improve service reliability but increase emissions.

A useful distinction is between sustainability performance and sustainability capability. Performance refers to observed outcomes, such as emissions, injury rates, living wages or waste diversion. Capability refers to the routines and resources that produce improvement, such as supplier-development programmes, traceability, cross-functional design and credible governance.

Sustainability also has a temporal dimension. A decision can be financially attractive in the short term but damage resilience, trust or ecological capacity over time. Strategic analysis must therefore consider both immediate effects and long-term system conditions.

2. Theoretical foundations

2.1 Stakeholder theory

Stakeholder theory holds that an organisation has responsibilities to groups that affect, or are affected by, its activities. Relevant stakeholders may include customers, employees, suppliers, investors, regulators, local communities, indigenous peoples, civil-society organisations, future generations and the natural environment.

In supply-chain management, stakeholder theory changes the question from “What maximises the focal firm’s short-term return?” to “Whose interests and rights are affected by this network, and how should competing claims be governed?” It supports broader value creation and encourages managers to examine stakeholders that possess limited commercial power but face substantial impacts.

Stakeholder analysis commonly considers:

• Power: the ability to influence decisions or impose consequences;
• Legitimacy: the social or moral validity of a claim; and
• Urgency: the time sensitivity of the claim.

These attributes help managers prioritise engagement, but they should not be treated as a moral ranking. A community with low bargaining power may still have a legitimate claim to clean water. Over-reliance on power can reproduce injustice by giving dominant stakeholders disproportionate attention.

Stakeholder theory supports practical activities such as supplier consultation, worker grievance mechanisms, community impact assessment, collaborative product design and transparent remediation. Its limitation is that it does not always specify how managers should resolve conflicts between stakeholders. Formal decision criteria, rights-based safeguards and board-level accountability are therefore necessary.

2.2 Institutional theory

Institutional theory explains how organisations are influenced by rules, norms and shared beliefs in their operating environment. Firms often adopt similar structures or practices because conformity provides resources, acceptance and survival advantages. This process is known as institutional isomorphism.

Three forms are particularly relevant:

• Coercive pressure: laws, regulations, contractual requirements and pressure from powerful customers;
• Normative pressure: professional standards, education, industry codes and expectations about appropriate practice; and
• Mimetic pressure: imitation of competitors when technologies, risks or outcomes are uncertain.

For example, a retailer may require suppliers to disclose emissions because regulation, investor expectations and industry norms make disclosure increasingly necessary. A supplier may adopt an environmental management system partly because customers require it and partly because competitors have done so.

Institutional theory explains why organisations may adopt sustainability policies without substantially changing underlying practices. Certification, reporting and supplier codes can become symbolic compliance mechanisms. Managers should therefore distinguish formal adoption from substantive implementation by examining evidence such as operational data, worker outcomes, audit findings and corrective-action closure.

2.3 Legitimacy theory

Legitimacy is the perception that an organisation’s actions are appropriate within a socially constructed system of values and expectations. Legitimacy theory focuses on the relationship between organisational behaviour and the social licence to operate.

Supply-chain controversies can threaten legitimacy even when a firm has not directly caused the harm. A brand may be criticised for labour abuses at a contractor, deforestation in a commodity supply base or misleading environmental claims. Firms may respond through disclosure, stakeholder engagement, operational change, symbolic communication or a combination of these.

Legitimacy strategies can be classified as:

1. Substantive change: altering operations, purchasing practices, technologies or contractual relationships.
2. Symbolic change: communicating commitment without equivalent operational transformation.
3. Defensive response: denying responsibility, narrowing the boundary of accountability or challenging the evidence.
4. Corrective engagement: acknowledging harm, compensating affected parties and preventing recurrence.

Legitimacy theory is valuable because it highlights trust, reputation and social acceptance. Its limitation is that an organisation can appear legitimate while continuing harmful practices. Consequently, sustainability communication must be tested against independent evidence, stakeholder outcomes and assurance quality.

2.4 Natural-resource-based view

The natural-resource-based view (NRBV) extends the resource-based view of the firm. It argues that capabilities connected with environmental challenges can become sources of sustained competitive advantage when they are valuable, difficult to imitate and embedded in organisational systems.

Three strategic capabilities are commonly associated with NRBV:

• Pollution prevention: reducing waste and emissions at source through process control, efficiency and redesign;
• Product stewardship: managing environmental and social impacts throughout the product life cycle, including supplier and customer relationships; and
• Sustainable development: developing technologies, business models and capabilities that remain viable within ecological limits.

Pollution prevention can reduce material, energy and disposal costs. Product stewardship can strengthen customer trust, improve market access and reduce regulatory exposure. Sustainable development can create new products, services and business models, such as remanufacturing, sharing, renewable-energy systems or product-as-a-service models.

NRBV does not imply that every environmental initiative creates competitive advantage. Some actions are necessary simply to meet legal or ethical duties. Advantage depends on implementation quality, scarcity of capabilities, appropriability of benefits and alignment with customer value. Competitors may also imitate visible technologies, while less visible routines—supplier relationships, data systems and organisational learning—may be harder to copy.

2.5 Systems thinking

Systems thinking examines relationships, feedback, delays, boundaries and unintended consequences rather than isolated events. It is essential because supply-chain sustainability problems are often caused by interactions among procurement, production, transport, marketing, finance and external actors.

A systems perspective distinguishes:

• Stocks: accumulations, such as inventory, carbon concentration, soil quality or supplier capability;
• Flows: rates that change stocks, such as production, emissions, replenishment or remediation;
• Feedback loops: causal connections through which outcomes influence future decisions;
• Delays: time gaps between an intervention and its consequences; and
• Boundaries: the selected limits of analysis, which determine what is visible and what is excluded.

A reinforcing feedback loop amplifies change. For example, better traceability may increase customer trust, which may increase demand for certified products, generating resources for further traceability investment. A balancing loop counteracts change. For example, higher demand may increase capacity utilisation until congestion and service failures reduce demand or trigger investment.

A common supply-chain example is the bullwhip effect, in which small changes in consumer demand produce larger fluctuations upstream. Sustainability consequences may include excess production, obsolete inventory, emergency transport and avoidable waste. Systems thinking encourages managers to address information sharing, incentives and replenishment policies rather than blaming individual actors.

Figure: A systems view of supply-chain interdependencies, including forward flows, reverse flows and external pressures.

3. Mapping supply-chain interdependencies

3.1 Choosing the unit and boundary of analysis

Mapping begins by defining the focal decision and its boundary. A procurement map may examine a particular material and its first- and second-tier suppliers. A product life-cycle map may extend from extraction through use and end-of-life. A regional logistics map may include roads, warehouses, ports, communities and energy systems.

Boundaries should be explicit rather than assumed. Managers should ask:

• Which products, geographies and time period are included?
• Which tiers and contractors are visible?
• Are use-phase and end-of-life impacts included?
• Which stakeholders and ecological resources are affected?
• What information is known, estimated or missing?

3.2 A practical mapping method

A robust mapping exercise can proceed through seven steps:

1. Identify actors and assets: suppliers, plants, warehouses, carriers, customers, workers, communities, infrastructure and ecosystems.
2. Map primary flows: materials, components, products, information, money, emissions, waste and returns.
3. Record dependencies: critical minerals, scarce water, single-source suppliers, fragile transport corridors or specialised skills.
4. Identify decision rights: who sets specifications, prices, lead times, labour conditions and environmental requirements?
5. Trace impacts and risks: connect activities to environmental, social and economic outcomes.
6. Locate feedback and delays: identify where information is distorted, incentives conflict or impacts appear later.
7. Validate with stakeholders: compare the map with supplier, worker, customer and community knowledge.

A useful map does not need to display every relationship. It should make the most decision-relevant dependencies visible. A complex map can be separated into layers: physical network, information and governance network, impact layer and reverse-logistics layer.

3.3 Materiality and prioritisation

Materiality concerns the significance of an issue to organisational performance and/or stakeholders. In a supply-chain context, an issue may be material because it has severe human consequences, threatens business continuity, creates regulatory exposure, affects customer value or damages ecological systems.

A practical prioritisation approach combines at least four dimensions:

Materiality should not be reduced to a financial ranking. Double materiality is particularly useful: it considers both how sustainability issues affect the organisation and how the organisation affects people and the environment. A high-impact issue may deserve action even when its immediate financial effect is uncertain.

4. Strategic alignment

Strategic alignment means that sustainability priorities are connected to the organisation’s purpose, competitive positioning, capabilities, decisions, incentives and performance measures. A sustainability statement without resource allocation or operational accountability is not strategic alignment.

4.1 Corporate strategy and supply-chain sustainability

At corporate level, sustainability may support:

• risk reduction and resilience;
• compliance and market access;
• cost efficiency and productivity;
• innovation and new revenue models;
• reputation and stakeholder trust; and
• fulfilment of ethical responsibilities.

The same sustainability initiative can serve several purposes, but managers should avoid claiming that every ethical obligation is justified only by financial returns. Some responsibilities arise from human rights, legal duties or ecological thresholds regardless of short-term profitability.

4.2 Competitive strategy and sustainability positioning

Sustainability can reinforce different competitive positions:

• Cost leadership: energy efficiency, waste reduction, resource productivity and logistics optimisation;
• Differentiation: verified low-impact products, ethical sourcing, durability, repairability and transparency;
• Responsiveness: resilient local or regional networks, flexible capacity and rapid response to disruptions; and
• Focus: serving customers with specialised environmental or social requirements.

Alignment requires coherence. A firm cannot credibly promise low prices, rapid customisation, unlimited variety and minimal environmental impact without recognising trade-offs. Strategic choices should specify which customer value is prioritised and which capabilities make the promise credible.

4.3 The strategy cascade

A useful cascade links five levels:

1. Purpose and strategic intent: Why does the organisation exist, and what future does it seek?
2. Material priorities: Which sustainability issues matter most?
3. Capabilities and initiatives: What technologies, relationships, processes and skills are required?
4. Operating decisions: How will procurement, design, production, logistics and recovery change?
5. Measures and governance: How will performance, accountability and learning be managed?

For example, a strategic intent to provide circular products should lead to design-for-disassembly, take-back partnerships, reverse-logistics capacity, recovered-material specifications and measures of product life extension. Merely purchasing recycled content without changing product architecture would represent weak alignment.

4.4 Goals, indicators and decision rights

Sustainability objectives should be specific enough to guide action and broad enough to prevent sub-optimisation. Relevant measures may include absolute greenhouse-gas emissions, emissions intensity, renewable-energy share, water withdrawal, injury frequency, living-wage coverage, supplier corrective-action closure, recycled content, return rates and product-life extension.

Intensity measures compare impact with an activity denominator, such as kilograms of CO₂-equivalent per product or tonne-kilometre. They are useful for efficiency analysis but can conceal growth in total impact. Absolute and intensity measures should therefore be interpreted together.

Where quantitative indicators are used, the denominator must be stable and units must be clear. For emissions intensity:

where I is emissions intensity, measured for example in kg CO₂e per unit of output; E is total emissions in kg CO₂e; and Q is output in units. The relationship assumes that E and Q refer to the same boundary and reporting period. If output increases while total emissions also increase, intensity may improve even though the climate burden grows.

For a simple weighted prioritisation model:

where P is the priority score; S is severity; L is likelihood or exposure; C is stakeholder concern; R is strategic relevance; and w₁ through w₄ are non-negative weights whose sum equals 1. The model is a decision aid, not an objective measurement of moral worth. Scores should be accompanied by qualitative justification and sensitivity analysis.

Worked example: Suppose a company scores a deforestation risk as severity 5, exposure 4, stakeholder concern 5 and strategic relevance 3 on a five-point scale. If the weights are 0.35, 0.25, 0.25 and 0.15 respectively, then:

The result is a high priority relative to issues scored on the same scale. It does not prove that deforestation is more important than every other issue; the conclusion depends on boundary, evidence and stakeholder participation.

5. Applied case: NorthStar Apparel’s sourcing transformation

This is an illustrative case based on common industry conditions; NorthStar Apparel is fictional.

Background

NorthStar Apparel sells mid-priced outdoor clothing through online and retail channels. Its competitive strategy emphasises reliable availability, moderate prices and increasingly durable products. Production is outsourced to suppliers in several countries. The company has a supplier code, annual audits and a public target to reduce emissions.

Problem

A media investigation reports excessive overtime and recruitment-fee debt among workers at a second-tier sewing subcontractor. At the same time, NorthStar’s rapid replenishment model uses frequent air freight during demand peaks. The company’s sustainability report highlights factory energy efficiency but does not disclose purchasing practices, subcontracting or transport emissions in detail.

Analysis through the theories

Stakeholder theory identifies affected workers, suppliers, customers, investors, communities and regulators. Workers have urgent and legitimate claims despite limited bargaining power. Institutional theory reveals coercive pressure from labour law and emerging due-diligence expectations, normative pressure from industry standards and mimetic pressure from competitors publishing tiered supply-chain data. Legitimacy theory explains the reputational threat caused by a gap between public commitments and lived conditions.

The NRBV suggests that supplier-development capability, demand planning, durable design and lower-carbon logistics could create value, but only if embedded in purchasing and planning routines. Systems thinking reveals a feedback loop: short lead-time commitments encourage suppliers to subcontract; incomplete visibility hides risk; late demand changes trigger air freight; high costs then reinforce pressure for low unit prices and short production windows.

Approach and solution

NorthStar takes five actions:

1. It establishes a responsible-sourcing governance committee with procurement, design, logistics, finance, human resources and sustainability leaders.
2. It maps tier-one and critical tier-two suppliers and uses worker interviews, grievance data and document review rather than relying only on announced audits.
3. It changes buyer incentives by including labour-risk performance, forecast stability and corrective-action quality in procurement evaluations.
4. It separates remediation from immediate termination. Workers receive repayment of illegal recruitment fees, and suppliers implement timekeeping, subcontracting controls and worker representation. Termination is reserved for refusal or severe unremedied abuse.
5. It improves demand planning, postpones selected product configurations and uses consolidated lower-carbon transport where service requirements permit. Air freight is approved through an exception process with executive visibility.

Outcome

After two reporting cycles, NorthStar records improved disclosure, fewer emergency air shipments and higher closure rates for corrective actions. It does not claim that risk has been eliminated. Instead, it reports remaining gaps, supplier turnover and worker grievance outcomes. Financial results are mixed initially because supplier-development and data costs increase, but inventory obsolescence and premium freight costs decline.

Learning points

The case demonstrates that sustainability cannot be delegated solely to a compliance department. Procurement terms, forecasting, product design, logistics choices and remedy mechanisms jointly shape outcomes. It also illustrates that responsible disengagement is not always the best first response: abrupt exit may remove the buyer’s leverage while leaving workers exposed. Engagement must nevertheless have boundaries, escalation and consequences.

6. Challenges, limitations and governance

Measurement and data quality

Supply-chain data may be incomplete, inconsistent or strategically reported. Supplier estimates can use different boundaries, emission factors and production denominators. Digital traceability improves visibility but does not automatically establish truth. Firms should document methodology, distinguish measured from estimated data, apply independent assurance where appropriate and avoid false precision.

Scope and attribution

A focal firm may contribute to harm through purchasing practices without directly controlling the supplier. Conversely, assigning all network impacts to one firm can obscure the roles of governments, consumers and other buyers. Responsibility should be analysed through contribution, control, leverage and capacity to remedy—not merely legal ownership.

Trade-offs and rebound effects

Efficiency can lower unit impact while increasing total demand, a rebound effect. Renewable energy may reduce operational emissions but create mineral and land-use pressures elsewhere. Local sourcing may reduce transport distance while increasing production energy or reducing livelihood opportunities. Trade-offs should be assessed over the life cycle and across stakeholders.

Power and justice

Supplier codes can transfer compliance costs to smaller suppliers, while powerful buyers continue to demand low prices and short lead times. Sustainability programmes should consider fair purchasing, long-term relationships, worker voice, grievance access and the distribution of costs and benefits. A technically efficient solution may be socially unjust if affected groups cannot participate.

Greenwashing and assurance

Greenwashing occurs when communication creates an exaggerated impression of environmental or social performance. Common risks include selective disclosure, vague claims, offsetting without reduction, confusing intensity with absolute improvement and presenting pilots as system-wide transformation. Governance should require evidence, claim review, clear boundaries, board oversight and correction of errors.

Technology and artificial intelligence

Sensors, digital product passports, satellite monitoring, distributed ledgers and AI-assisted forecasting can support traceability, anomaly detection and scenario analysis. Their value depends on data quality, interoperability, worker privacy, cybersecurity and governance. AI models may reproduce supplier or geographic bias, misclassify risk or encourage surveillance without remedy. Human review, explainability, data minimisation and stakeholder consent are essential.

7. Contemporary strategic developments and best practice

Several developments are reshaping SSCM:

• Due diligence: organisations are increasingly expected to identify, prevent, mitigate and remedy adverse impacts in their value chains.
• Circularity: firms are moving from waste management toward design for durability, repair, reuse, remanufacturing and high-quality recycling.
• Scope 3 management: value-chain emissions are receiving greater attention, especially purchased goods, transport, product use and end-of-life.
• Nature and biodiversity: water, land, ecosystem services and deforestation are being integrated into supply-chain risk assessment.
• Climate adaptation: resilience planning considers heat, floods, water scarcity, wildfires and changing infrastructure reliability.
• Just transition: decarbonisation is increasingly evaluated in relation to workers, communities, affordability and regional economic effects.

Best practice is not a single certification. It includes a combination of: explicit boundaries; stakeholder-informed materiality; risk-based due diligence; responsible purchasing; supplier capability development; life-cycle thinking; absolute and intensity indicators; transparent targets; independent assurance; effective grievance and remedy systems; and continuous learning.

Chapter Summary

Sustainable supply chain management requires more than environmental efficiency within the focal firm. Stakeholder theory broadens accountability to affected groups; institutional theory explains regulatory, professional and imitation pressures; legitimacy theory highlights social acceptance and the danger of symbolic compliance; the natural-resource-based view connects environmental capabilities with innovation and competitive advantage; and systems thinking reveals feedback, delays, boundaries and unintended consequences.

Supply-chain mapping should make actors, flows, dependencies, decision rights, impacts and feedback loops visible. Materiality should consider impact severity, exposure, stakeholder concern and strategic relevance, while recognising that financial significance is not the only basis for action. Strategic alignment connects purpose to priorities, capabilities, operating decisions, measures and governance. Effective implementation requires credible data, responsible purchasing, worker and community participation, remedy, life-cycle analysis and careful treatment of trade-offs. Technology can strengthen visibility and analysis, but it cannot replace ethical judgement or institutional accountability.

Key Terms

Stakeholder theory: A perspective that treats affected and influential groups as relevant to organisational decision-making.

Institutional theory: A theory explaining how rules, norms and shared beliefs shape organisational behaviour.

Institutional isomorphism: The tendency of organisations to become similar because of coercive, normative or mimetic pressures.

Legitimacy: Social acceptance that an organisation’s actions are appropriate within prevailing values and expectations.

Natural-resource-based view: A strategic perspective linking environmental capabilities to potential competitive advantage.

Pollution prevention: Reducing waste and emissions at source rather than managing them after creation.

Product stewardship: Managing product impacts across the life cycle and across organisational boundaries.

Systems thinking: Analysis focused on relationships, feedback, delays, boundaries and unintended consequences.

Stock: An accumulation that changes through inflows and outflows.

Flow: A rate that changes a stock or represents movement through a system.

Feedback loop: A causal cycle in which outcomes influence future actions or conditions.

Materiality: The significance of an issue to organisational performance, stakeholders, people or the environment.

Double materiality: Assessment of both organisational exposure to sustainability issues and organisational impacts on society and nature.

Supply-chain interdependence: The condition in which actors’ outcomes depend on connected decisions, resources and flows.

Strategic alignment: Coherence among purpose, priorities, capabilities, operations, measures and governance.

Scope 3 emissions: Indirect value-chain greenhouse-gas emissions outside an organisation’s direct operations and purchased energy.

Greenwashing: Communication that creates a misleading impression of sustainability performance.

Due diligence: A process for identifying, preventing, mitigating, tracking and remedying adverse impacts.

Circularity: Designing systems to maintain product, component and material value and reduce waste.

Review Questions

5 Short Answer Questions

1. What are the three forms of institutional pressure described by institutional theory?
2. Why can a stakeholder with limited power still have a legitimate claim?
3. Distinguish a stock from a flow in systems thinking.
4. What is the difference between absolute and intensity sustainability indicators?
5. Identify two capabilities associated with the natural-resource-based view.

5 Long Answer Questions

1. Compare stakeholder theory, legitimacy theory and institutional theory in explaining a supply-chain labour controversy.
2. Explain how systems thinking can reveal unintended consequences in transport and inventory decisions.
3. Discuss how sustainability can support both cost leadership and differentiation, including the conditions required for credibility.
4. Explain the strategy cascade from corporate purpose to supply-chain performance measures.
5. Critically evaluate the limitations of supplier auditing as a sustainability governance mechanism.

3 Analytical / Application Questions

1. Construct a stakeholder and systems map for a company sourcing cocoa, identifying at least three material dependencies, two feedback loops and two possible interventions.
2. Using the priority formula in this chapter, calculate the score for an issue with S = 4, L = 5, C = 3 and R = 4, using weights 0.35, 0.25, 0.25 and 0.15. Interpret the result and explain one limitation of the calculation.
3. A retailer claims that its emissions intensity fell by 12%, but total sales increased by 30% and total emissions rose by 8%. Evaluate the claim and recommend the indicators and boundary information needed for a fair assessment.

Multiple Choice Questions with Answers

Question 1

Which theory focuses most directly on the claims and interests of groups affected by an organisation’s activities?

A. Stakeholder theory

B. Institutional theory

C. Legitimacy theory

D. Transaction cost theory

Correct Answer: A. Stakeholder theory

Question 2

A supplier adopts an environmental standard because a major customer requires it. This is primarily an example of which institutional pressure?

A. Mimetic pressure

B. Coercive pressure

C. Normative pressure

D. Demographic pressure

Correct Answer: B. Coercive pressure

Question 3

Which capability is associated with the natural-resource-based view?

A. Pollution prevention

B. Market speculation

C. Financial outsourcing

D. Demand inflation

Correct Answer: A. Pollution prevention

Question 4

In systems thinking, a stock is best described as:

A. A rate of movement through a process

B. An accumulation that changes through inflows and outflows

C. A one-time managerial decision

D. A supplier performance target

Correct Answer: B. An accumulation that changes through inflows and outflows

Question 5

What is the main risk of relying only on sustainability intensity indicators?

A. They cannot be calculated for any supply chain

B. They may hide growth in total impact

C. They always overstate environmental harm

D. They measure only social performance

Correct Answer: B. They may hide growth in total impact

Question 6

Using I = E ÷ Q, what is the emissions intensity when E = 2,000 kg CO₂e and Q = 500 products?

A. 0.25 kg CO₂e per product

B. 2.5 kg CO₂e per product

C. 4 kg CO₂e per product

D. 4,000 kg CO₂e per product

Correct Answer: C. 4 kg CO₂e per product

Question 7

Which practice best demonstrates strategic alignment for a circular-product strategy?

A. Publishing a general sustainability slogan

B. Increasing advertising without changing product design

C. Combining design for disassembly with take-back and recovery capabilities

D. Measuring only quarterly sales revenue

Correct Answer: C. Combining design for disassembly with take-back and recovery capabilities

Question 8

Legitimacy theory is especially concerned with:

A. Whether organisational actions are socially accepted as appropriate

B. The mathematical optimisation of warehouse space

C. The legal ownership of every supplier

D. The elimination of all stakeholder conflict

Correct Answer: A. Whether organisational actions are socially accepted as appropriate

Question 9

In the priority model P = w₁S + w₂L + w₃C + w₄R, what must be true of the weights in the stated model?

A. They must all be equal to 5

B. They must sum to 1 and be non-negative

C. They must be negative for high-risk issues

D. They must use different measurement units

Correct Answer: B. They must sum to 1 and be non-negative

Question 10

Why might immediate termination of a high-risk supplier be ethically problematic?

A. It always increases product quality

B. It can remove buyer leverage and leave affected workers without remedy

C. It eliminates the need for due diligence

D. It guarantees lower emissions

Correct Answer: B. It can remove buyer leverage and leave affected workers without remedy