New environmental supplier selection criteria for circular supply chains: Lessons from a consequential LCA study on waste recovery

Abstract Although circular supply chains are widely perceived as a leap towards a more environmentally friendly economy, the environmental impact across circular supply chains differs. This article sets out to develop environmental supplier selection criteria for circular supply chains. The method draws upon a consequential life cycle assessment and the monetized environmental impact of four alternative fuel suppliers in the cement industry. The best supplier performs three times better than the worst supplier in terms of environmental impact, thereby exemplifying the need for this study. The findings also show how three supplier selection criteria explain most of the environmental impact of selecting a supplier in a circular supply chain. First, supplier selection might impact environmentally preferred waste handling activities. Second, sourcing from a supplier located on an under-supplied market may lead to indirect transport as the players on that market may source on other markets to compensate for the diverted products. Third, low usability of the discarded product compared to the substituted virgin material may lead to additional emissions. The three criteria must be considered simultaneously when selecting suppliers in circular supply chains since focusing on a single criterion may negatively affect the other criteria. The findings contribute to circular supply chain literature by proposing and demonstrating the need for environmental supplier selection criteria in circular supply chains. Moreover, this study is relevant for achieving cleaner production in the cases where firms increasingly rely on the use of discarded products as a virgin fuel or material substitute.

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