Which phenomenon describes pressure to comply with environmental standards moving down the supply chain?

The concept that describes the pressure to comply with environmental standards moving down the supply chain is known as the green bullwhip effect. This phenomenon occurs when a demand signal for sustainable practices or compliance with environmental regulations amplifies as it moves through the supply chain. Each tier or layer of the supply chain may impose its own standards, which leads to an escalation of requirements for suppliers further down the line.

In this context, as organizations prioritize sustainability and push for compliance with environmental standards, the expectation cascades through the supply chain. As suppliers respond to the demands of the companies they supply, they too may impose similar standards on their own suppliers, creating a ripple effect. This amplification can lead to a heightened focus on sustainability throughout the entire supply chain, ultimately benefiting environmental outcomes.

Recognizing the green bullwhip effect is crucial for managing ethical procurement and supply, as it encourages organizations to not only set stringent environmental standards but also to support their suppliers in achieving these goals without creating undue pressures that could lead to non-compliance or unethical practices.