The green bullwhip effect: transferring environmental obligations along a supply chain

The bullwhip effect has long been recognized as a critical factor that amplifies demand variability as customer orders pass upstream through successive tiers of the supply chain. Like demand, environmental requirements also change over time, and are passed along from customers to suppliers. Based on three field cases, we find evidence that such a phenomenon exists. First, ratcheting demands for better environmental performance are passed upstream through successive tiers. Second, a green bullwhip effect is created as expectations are amplified and time is compressed. Finally, upstream suppliers often appear ill equipped to handle these challenges.