Supply Chain Sustainability—Drivers, Inhibitors, Solutions - Technology Management for Sustainable Production and Logistics - page 68

Some authors revealed a growing education on sustainability among the
consumers (Hitchcock 2012 ; Svensson and Wagner 2012 ). Khanna et al. argue that
the pressure on firms to eco-innovate is strongest in product markets which are close
to final consumers. In these markets consumers are often willing to pay premiums
for environmentally friendly products and therefore firms often voluntarily eco-
innovate (Khanna et al. 2009 ). Such eco-innovations allow firms to produce higher
quality environmental friendly products while simultaneously differentiating
themselves from their competitors. Van Hoek ( 2002 ) adds how important is to
consider if there is a market willing to pay for the green product and other business
issues. Green-conscious customers demand innovative green products, and have
demonstrated a willingness to pay higher prices for green products (Chen et al.
2008 ). Manget et al. ( 2009 ) found that consumers in Canada, France, Germany,
Italy, Japan, Spain, the UK and the USA are willing to pay five to ten percent
more for green goods. But Kammerer has found that consumers are only willing
to pay for eco-innovation if the associated products deliver quantifiable added
value. He contends that while consumers will readily pay extra for environmental
friendly baby food and clothes, they are not always willing to pay extra for green
electricity as the added value is difficult to measure (Kammerer 2009 ). Oltra and
Saint Jean ( 2009 ) pointed out the considerable demand for products capable of
meeting environmental criteria, demands for decreased fuel consumption, and
lower prices.
However, customers' attitudes do not always appear to be clear. Concerns about
the environment and future generations are still not included in customers' utility
function so that the decision making process will not lead them towards a more
environmentally friendly purchase, unless there are no differences in the final price
(Rossi et al. 2013 ). Rehfeld et al. ( 2007 ) disputed the existence of a strong stimulus
for eco-innovation from the demand side, citing the fact that green products are
still expensive and not all customers are willing to trade off product quality or
features for green attributes.
Whereas customers can create a sustainability pressure, suppliers can give
incentives for eco-innovations. Suppliers can develop more sustainable ways of
mining materials or producing parts and thereby offer an opportunity to improve
product sustainability. Unfortunately, suppliers can offer the same solutions to
competitors. Supply-side drivers are also important in case of eco-innovation. The
successful implementation of new and more sustainable product designs heavily
depends on suppliers' willingness to cooperate in sustainability improvements, and,
most likely, to implement changes as well (Alblas et al. 2014 ). Geffen and Rothenberg
( 2000 ) found evidence that whilst the networking activities of firms (horizontal
linkages) is an important driver of eco-innovation, a strong relationship with suppliers
(backward linkage) is particularly key. Industries with highly integrated supply
chains are often able to reduce costs and, as a result, remain globally competitive
while simultaneously reducing their energy use and carbon footprint (Doran and
Ryan 2012 ). In Ireland Roper et al. checked how firms engage in collaboration with
customers, suppliers, competitors, universities and public research institutes in the
development of new innovations.