Which of the following best describes the importance of supply chain management in sustainability?

The choice that best describes the importance of supply chain management in sustainability is addressing social and environmental externalities. Supply chain management plays a crucial role in identifying, assessing, and mitigating the negative impacts that a company’s operations can have on society and the environment. This is because supply chains often cross geographical boundaries and involve multiple stakeholders, making them integral to social and environmental integrity.

Sustainable supply chain management focuses on integrating environmental and social concerns with traditional business practices. By addressing externalities—such as pollution, resource depletion, and social injustices—companies can work towards more sustainable operations. This includes implementing practices that reduce emissions, conserve resources, and ensure fair labor practices, which ultimately contribute to a more sustainable economy and society.

In contrast, increasing production capacity, minimizing employee turnover, and enhancing advertising strategies may relate to overall business efficiency and profitability, but they do not directly address the sustainability implications of supply chain activities. Therefore, focusing on social and environmental externalities accurately captures the essence of sustainability within supply chain management.