A System Thinking Approach for Social and Environmental Risks in Supply Chains

The discussion of risks in the supply chains is no longer restricted to the financial perspective and also considers social and environmental dimensions in the research on Supply Chain Risk Management (SCRM). Nevertheless, the relationship between the social and environmental dimensions remains scarce in SCRM studies. Thus, this research aims to explore such relationships by discussing hypotheses about the SCRM according to elements already addressed in the academic literature. The methodology follows the system thinking approach by developing a Causal Loop Diagrams (CLD) to present the complex relationship among the variables involved in the social and environmental dimensions. The results highlight two reinforcing loops and six balancing loops, which in turn leads to the definition of 10 hypotheses regarding the SCRM. These loops and hypotheses stress (i) the inner relationships among social and environmental risks (both endogenous and exogenous) and also (ii) their similar relationship with the variables “Consequences” for the companies and “Implementation of strategies” by the company due to fundamental structure of the SCRM. Moreover, the results provide relevant insights for decision-makers interested in an extended approach for SCRM that considers social and environmental dimensions.