Operational Implications of Environmental Regulation

Environmental regulation has important implications on the design and operation of sustainable supply chains. In particular, driving supply chains toward environmental sustainability heavily depends on how the regulation is implemented. To realize a simple regulatory principle, various implementation choices may be available to regulators, and these choices can generate very different incentives on different stakeholders and how they operationalize sustainability. In this chapter, we review a number of recent research papers in operations management to illustrate this phenomenon in the context of take-back regulation and posit that looking through an operational lens should be an essential component of appropriate formulation and effective compliance for environmental regulation.