What Does the Sustainability-Risk Interaction Look Like? Exploring Nuanced Relationships in Emerging Economy Sustainability Initiatives

Abstract

To be viable long-term, sustainability programs must be profitable. Unfortunately, current sustainability practices increase risk, increasing costs and threatening revenues. Higher costs and lower revenues negatively impact profitability and, thus, the viability of sustainability. To understand how sustainability-induced risks affect food production systems, sustainability-induced risks in food production systems are identified and classified. It is also explored how sustainability risks interact, making it especially costly and difficult to eradicate them. An inductive, interview-based method was employed, which relies on 41 semi-structured interviews, with managers at 32 companies. The study documents the interaction between sustainability and risk in five risk categories-behavioral, opportunism, organizational routines, safety and traceability routines and systems design. The negative impact of intensive interactions among these risk categories threatens food production systems' sustainability initiatives. Behavioral risks are particularly pervasive and harmful as they either induce or exacerbate other risk clusters. Elaborating the interaction between sustainability and risk, as well as documenting risk types and interactions, provides a more holistic view of sustainability implementation. This nuanced view will lead to a more accurate and insightful costing of sustainability programs. Lamentably, the most pervasive risk category-i.e., behavioral risks-are often overlooked in the supply chain management literature. However, this research shows a clear need to delve more deeply into the behavioral dimension to improve risk management and to increase the viability of sustainability. This study identifies and categorizes sustainability-induced risk factors in food production systems, and shows how they interrelate, providing the foundation for better planning and execution of viable sustainability programs.