Introduction
The need to rethink the approaches to logistics functioning under the pressure of the imperative to protect the environment and increase the social responsibility of business structures determines the relevance of studying the “green” vector of logistics transformation. Green logistics implies the concern for the environment; it links environmental and economic efficiency with logistics in an attempt to reduce the impact of business on the environment. Today, the opportunity to achieve quantitative and qualitative goals of logistics activities is provided through the synthesis of economic, social, and environmental components forming green logistics contours, within the framework of corporate social responsibility (CSR). Thus, it becomes expedient to analyze the evolution, shaping of the concept, and the best practices of green logistics.
History and Promotion of Green Logistics Principles
The paradigm of “green” logistics began to form in the world in the mid-1980s with the emergence of the concept of CSR. After the introduction of the European Union Packaging Directive, companies increased the use of reusable containers, equipment for processing waste from production and logistics activities, and introduced packaging management systems (Achillas et al., 2018). The principles of green logistics are also promoted by the logistics associations (Fahimnia et al., 2015). In 2012, the Green Freight Europe project was launched, initiated by shippers and logistics companies to develop uniform approaches to determining the factors of harmful emissions, comparing the environmental parameters of different transport operators.
Green Logistics and Environmental Goals: A Synergy
In modern economics, the term “green logistics” is considered by most theorists as the practice of supply chain management with a strategic focus on reducing the environmental burden on social production. It is because, namely, logistics is responsible for the competent distribution, storage, and transportation of resources, which directly affects the environmental situation in the world (Kumar, 2015). Thus, there is a close relationship between this industry, the environment, and natural resources. In addition, the implementation of environmental goals can be achieved in synergy with other strategic and financial goals in the economy. It is the basis for the enormous potential of this new logistics challenge and task.
The Place of Green Logistics in the Overall Concept of CSR
Deriving of Green Logistics from the concept of CSR and Sustainable Development
By the middle of the 20th century, managers of Western corporations realized the need for purposeful and systematic regulation of the company’s relations with the internal and external environment. It subsequently resulted in the emergence of the CSR concept. Evolving in parallel with the concept of sustainable development, CSR, as a paradigm, has undergone qualitative changes and improved. Today, developed CSR practice is the only tool that connects a company’s policy with the principles of sustainable development. The priority for CSR is given to activities in the field of environmental protection and sustainable development (Grant et al., 2017). Environmental protection and increasing the social responsibility of business structures determine the relevance of studying various areas in the field of logistics. Green logistics is considered an important part of sustainable development (Fahimnia et al., 2015). It can bring economic benefits and, at the same time, have a positive impact on the environment.
Environmental, Social, and Governance Notion
Critique of Traditional CSR Concept
Today, in the context of the emergence of green sectors of the economy and green enterprises, the traditional CSR model is criticized by developing countries and non-governmental organizations for its limited nature and its frequent use as only a reputational tool.
The Need for Integrated Reporting on Sustainable Development
The corporate world is also actively discussing the need to create and implement a new system of companies’ comprehensive (integrated) reporting on sustainable development and progress achieved in applying environmental and social responsibility criteria. ESG (Environmental, Social, and Governance) notion reflects three key application areas: environment, social and economic governance, as well as three factors in assessing the sustainability of company investments (McKinnon, 2015). Corporate social reporting which discloses a company’s performance on these factors serves as an additional source of non-financial information for investors. In turn, green logistics penetrates all the appropriate subsystems and processes in frames of raising organizational performance.
Green Logistics: Green Technology in Logistics Activity
External Costs and Sustainable Balance
Logistics traditionally refers to the planning, execution, and control of the movement and placement of people and/or goods within the economic system to achieve certain goals. At the same time, the main function of logistics is to coordinate all types of logistics activities, to meet the needs of customers with minimal costs. In turn, in green logistics, companies pay more attention to external costs associated with climate change, air, water, and soil pollution to achieve a sustainable balance between the economy, the environment, and society.
Green Logistics Goals and Methods in Frames of the Supply Chain
Green logistics is a new scientific direction that involves the use of advanced supply chain technologies and modern equipment to minimize pollution and increase the efficiency of using logistics resources. It is a system of measures that provides the use of energy and resource-saving logistics technologies and modern equipment in all supply chain links. The goal, in this case, is minimizing the negative impact on the environment and increasing the total consumer value of products. From a business perspective, green logistics techniques/methods mainly include the following (Grant et al., 2017):
- Management of the transportation system (combined transport, 3PL-logistics),
- Managing the packaging process,
- Organization of “green” communications and production, storage, and waste management.
As a rule, the authors consider the reduction of the harmful impact of production and logistics activities on natural spheres at all stages of the technological cycle of a product and links in the supply chain. The integration of green technologies into all links of the logistics chain of an enterprise is carried out through the following activities (Achillas et al., 2018):
- Assessing suppliers in terms of the sustainability of the production of goods
- The use of environmentally acceptable packaging materials, organizing the “reverse” material flow.
- Using eco fuel or electric vehicles
- Environmentally sound spatial arrangement of the warehouses.
Best Practices of Green Logistics. Benefits for Business
Key Technologies
The key technologies for reducing the anthropogenic impact on the environment are reducing the distance during the transportation of goods at all stages of the supply chain, increasing the use of local resources, providing reducing fuel costs and harmful emissions into the atmosphere. It also includes the use of modern, environmentally friendly, energy-efficient vehicles.
Benefits for Business
Optimizing the transport network can bring a triple benefit to the company: reduced environmental burden, improved image, and lower costs throughout the supply chain (Rad & Gulmez, 2017). It is not surprising that today international and national institutional environment is being formed for the introduction of green technologies in production and logistics activities. The system of accounting for the harmful effects on natural spheres and assessing the effectiveness of companies’ efforts to protect the environment from pollution is being improved. Increasingly more companies around the world are realizing the unique value of non-renewable resources and are looking for the optimal balance between the needs of the organization, society, and nature.
Best Practices
The area of green logistics includes environmental projects for the construction of warehouses using energy-saving technologies and environmentally friendly building materials. Companies are making efforts to minimize the cost of heat energy while ensuring the safety in loading and unloading of goods. The use of reusable containers and packaging is practiced, as well as increasing the carrying capacity of vehicles. One can observe providing recycling processes in the form of reverse supply chains (waste collection and sorting) (Achillas et al., 2018). Small businesses and retailers are also gradually becoming involved in the implementation of logistics functions on a “green basis.” For example, the environmental safety of “green” refrigeration equipment is ensured by the use of carbon refrigerants which are safe for the ozone layer as coolers (Grant et al., 2017). Thermoregulators can independently program the operating mode of the equipment, by the traffic and opening hours of the outlet (Grant et al., 2017). Such examples demonstrate a steady trend of increasing interest in the application and development of green technologies in logistics.
Conclusion
Green logistics, by its specificity, includes many aspects of corporate social responsibility, an important area of modern management. Consideration of the substantive aspects of green logistics and corporate practices of its application allows concluding about the consolidation unity of the interaction of all components of this concept, which is provided by resource-saving technologies. In addition, green logistics contributes to improving the reputation of companies and raising the level of organizational performance. It is both a way to optimize costs and to form a business reputation of a new quality-focused on increasing the environmental and social responsibility of business.
References
Achillas, C., Bochtis, D., Aidonis, D., & Folinas, D. (2018). Green supply chain management. Routledge.
Fahimnia, B., Bell, M., Hensher, D., & Sarkis, J. (2015). Green logistics and transportation: A sustainable supply chain perspective. Springer.
Grant, D., Wong, C. Y., & Trautrims, A. (2017). Sustainable logistics and supply chain management: Principles and practices for sustainable operations and management (2nd ed.). Kogan Page.
Kumar, A. (2015). Green Logistics for sustainable development: An analytical review. IOSRD International Journal of Business, 1(1), 7(13).
McKinnon, A. (2015). Green logistics: Improving the environmental sustainability of logistics. (3rd ed.). Kogan Page.
Rad, S., & Gulmez, Y. (2017). Green logistics for sustainability. International Journal of Management Economics and Business, 13(3), 603-614. Web.