What is the implication of the green bullwhip effect on supply chains?

The green bullwhip effect highlights how demand variability in environmentally conscious products can amplify throughout the supply chain, leading to increased pressure for environmental compliance as each level of the supply chain responds to fluctuations in consumer demand for more sustainable products. As companies seek to meet the expectations set by their customers and regulatory bodies for greener practices, they often implement stricter environmental criteria for their suppliers. This creates a cascading effect where suppliers must also comply with these heightened standards, resulting in a collective increase in the emphasis on environmental compliance throughout the supply chain.

This phenomenon reflects the critical importance of aligning supply chain operations with sustainability goals, as heightened consumer awareness and legislative targets push firms to innovate and adapt their practices in response to green demand signals. Thus, the implication of the green bullwhip effect on supply chains emphasizes the necessity of integrating environmental considerations into procurement and supply strategies, making option A the most accurate reflection of its impact.