Greening Value Chains: How Large Companies in Latin America and the Caribbean Can Influence Natural Resource Use and Environmental Impact Management in Their Value Chains: Technical Study
Terry, Elizabeth; Hofmann, Michael
Managing value chain environmental impacts and natural resource use has become an important consideration in the purchasing decisions of large publicly traded companies. Suppliers, including micro, small, and medium enterprises (MSMEs) in the Latin American and Caribbean (LAC) region, can increase their competiveness by using best practices in natural resource management and reducing their environmental impacts. In order to assess how value chain environmental management can improve MSME competitiveness, this study identifies best practices among companies in key economic sectors in LAC with the largest value chain environmental inputs (e.g. water use, commodities) and outputs (e.g. greenhouse gas emissions, waste). Tools and incentive mechanisms that support adoption of best practices were identified and assessed for usefulness. This study provides valuable guidance to various actors along the value chains of multinational companies that operate in LAC, including suppliers (MSMEs), financial institutions, and other entities (international development organizations, industry associations, research organizations, government agencies, and non-governmental organizations (NGOs)) interested in fostering the development of greener value chains. The identification of key sectors, considering both economic and environmental impact significance, provides interested entities with a ranked list of sectors to work with. The identification of key environmental inputs and outputs is a valuable reference point for prioritizing key issues for LAC companies in each sector. Finally, this study's review of value chain environmental management best practices, tools, and incentive mechanisms supports knowledge sharing, development of greener value chains, improved environmental management of MSMEs, and key areas for supporting investment.