A Practical Approach to Screening Potential Environmental Hotspots of Different Impact Categories in Supply Chains

Identification of environmental hotspots becomes a pressing issue for companies pursuing sustainable supply chain management. In particular, excessive dependence on water resources outside the country may put the supply chain at unanticipated risk of water shortage. This article presents a practical approach to screening potential environmental hotspots of different impact categories that occur in the supply chain using environmental input-output analysis. First, the amounts of domestic and foreign potential impacts of global warming, terrestrial acidification, and water resource consumption, induced through supply chains were calculated for 403 sectors of Japanese products. Thereafter, with a focus on potential impacts induced through the import of raw materials, a framework for screening foreign potential hotspots was presented. The results showed that the sectoral potential impacts of water resource consumption had high rates of foreign impacts at deeper tiers of the supply chains for some sectors, which indicated that there exist hidden water hotspots outside the country. In the case study of fiber yarns, impacts on water resource consumption induced as a result of the import of crops, as well as that induced in silviculture as a result of the import of wood chips, were found to be the foreign potential hotspots.