Passing Environmental Requirements Up the Supply Chain. Evidence for a Green Bullwhip Effect

Global environmental legislation is getting stringent, as more countries are moving away from an illusion of a market mechanism: if green consumerism works in the near future, then compulsory regulations will no longer be necessary. In actuality, the product-focused regulations are a reflection of market and consumer needs for environmentally-friendlier goods. External environmental pressures, particularly in the form of regulation, are being pushed back upstream in the supply chain with influence on all of the players therein. Moreover, these pressures are often magnified as they are being transmitted through the supply chain, our new observation in the dynamics between buyers and suppliers and supply chain management. We call this phenomenon the “green bullwhip effect.”