Challenges and propositions - Part 5 of 5

The fifth major challenge raised in the research studies is related to the difficulties of small and medium sized enterprises (SMEs), as they may be uncertain about the benefits of upgrading to new sustainability standards and codes of conduct. They may also lack the knowledge, skills, time, financial and human resources in responding to the social and environmental requirements of global buyers and supply chains. It was exemplified that currently, several large Logistics Service Providers (LSPs), intermediaries/ forwarders, carriers, and shippers have Corporate Social Responsibility (CSR) policies, but many small and medium-sized ones do not. SMEs are also likely to lack the bargaining power required to co-develop suppliers who fail to comply with standards. This challenge is felt more by SMEs that operate at the bottom of the pyramid and in developing countries.

To increase the adaptive capacity of SMEs, their “agency” and “decentralized decision-making” capacities while interactions with other stakeholders and actors of supply chains should increase. In designing the previously highlighted sustainability-oriented schemata, SMEs and new startups should receive sufficient support and incentives to deal with the difficulties of adaptation to new schemata and comply with standards, licenses, and labels.