Implementation of a real option in a sustainable supply chain: an empirical study of alkaline battery recycling

Green supply chain management (GSCM) has emerged as a key approach for enterprises seeking to become environmentally sustainable. This paper aims to evaluate and describe the advantages of a GSCM approach by analysing practices and performance consequences in the battery recycling sector. It seeks to integrate works in supply chain management (SCM), environmental management, performance management and real option (RO) theory into one framework. In particular, life cycle assessment (LCA) is applied to evaluate the environmental impact of a battery recycling plant project, and life cycle costing (LCC) is applied to evaluate its economic impact. Firms, also understanding the relevance of GSCM, have often avoided applying the green principles because of the elevated costs that such management involved. Such costs could also seem superior to the potential advantages since standard performance measurement systems are internally and business focused; for these reasons, we consider all the possible value deriving also by uncertainty associated to a green project using the RO theory. This work is one of the few and pioneering efforts to investigate GSCM practices in the battery recycling sector.