A Systematic Approach to ESG Integration and Crisis Management Systems in Supply Chains: A Theoretical Framework and Mathematical Models
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Abstract
This study explores systems thinking that integrates environmental, social and corporate governance (ESG) frameworks and crisis management in the supply chain, introducing mathematical models for analysis. First, we analyze how the three levels of ESG are intertwined to form an overall sustainable development framework. System dynamics models are used to model the interactions and risk dynamics between these layers, highlighting the existence of systemic risk. Next, we examine how companies can use ESG frameworks for crisis management in the face of environmental disasters, social issues, or governance scandals. The decision tree model helps to analyze the choice of ESG measures and their consequences in crisis situations, while revealing the effectiveness of ESG as a risk mitigation strategy. In addition, the game theory model explores the behavioral interactions between firms, governments, investors, and society and analyzes the strategic choices and impacts of each role in crisis situations. Finally, the carbon footprint calculation model is applied to assess the impact of enterprises in environmental challenges, emphasizing the importance of ESG frameworks in reducing environmental impact and promoting sustainable development. Overall, this study provides a systematic approach to help companies effectively integrate ESG and crisis management strategies in a complex supply chain environment.
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