A method for assessing green value chain readiness

. Sustainable industrialization is the 9th goal of the 17 Sustainable Development Goals (SDGs) agreed by the United Nations. Green business practice is a fundamental concept that is important for the realization of sustainable industrialization. In a business practice, there is a value chain involved. The value chain is a series of activities to increase the added value of products/services so that the business practice has a competitive advantage. The first initiative towards green business is to conduct a descriptive and diagnostic analysis of the readiness of each activity in the value chain to become green. A suitable method is needed to perform accurate descriptive and diagnostic research. This article proposes a technique for measuring the readiness of the green value chain. The measure green value chain readiness method will use STEER (Sociocultural, Technological, Economic, Ecological, and Regulatory) as the measurement dimension. STEER has been widely used for macro analysis in business investment. The proposed method captures the existing condition of a business through the green readiness of each activity in the value chain. This measurement method is built through a literature review and uses a questionnaire as a data collection tool. Simple mathematical equations will be involved in indicating the level of readiness. The measurement results with the proposed method can map the green readiness of each activity in the value chain so that the company can start an initiative for a green strategy to become a sustainable industry.


Introduction
The industrial sector's rapid growth has been the leading cause of environmental deterioration in recent years.Along with the awareness of this concern, the United Nation include sustainable industrialization as part of sustainable development goals (SDGs).Most environmental initiatives are oriented towards the concept of sustainable development.In practice, the sustainable development approach is preferable because it focuses on continuous improvement instead of trying to change the system radically [1].
The industry terminology has been narrowly associated with merely production activities for a long time.In contrast, an industry requires a series of sequential activities, from inbound logistics, operations, outbound logistics, marketing, and sales to service.Each activity generates value-added, which accumulates into the final products or services.This creation of cumulative value added through the steps toward the final goal is referred to as a value chain.The value chain is a series of activities to increase the added value of products/services so that business practices have a competitive advantage [2].Therefore, it is crucial to manage the value chain to be agile and responsive to face various challenges [3].Likewise, to build sustainable industrialization, industry needs to uphold three fundamental pillars: environmental, economic, and social.As a result, the industrial paradigm needs to shift focus from solely on efficiency to creating value-added [4].Out of the three pillars of Sustainability, this article will specifically highlight the environmental aspects.
Along with environmental deterioration, sustainable industrialization should focus on managing an agile and responsive value chain concerning ecological aspects.The environmentally conscious value chain management practice is called green value chain (GVC).The term 'green' represents environmental aspects because green is synonymous with various environmentally friendly activities [5].In GVC, each link in a value chain must involve green business practices to ensure the inclusion of environmentally friendly operations, from raw materials to finished products.GVC is a series of business procedures involving environmentally friendly management to be implemented throughout the process, emphasizing recycling and further processing to minimize waste [6].
Until today, many industries are reluctant to practice environmentally conscious business.Poor industrial waste handling has polluted soil and groundwater in various countries [7].However, it is difficult for environmental performance to replace the efficiency that has been the industry's primary goal since the Industrial Revolution.
This article proposes a method for assessing industry readiness in executing environmentally conscious business practices from the value chain perspective.GVC has been proven to improve the environmental performance of an industry [6].Green assessment methods have been developed in various fields, such as infrastructure [8], hotels [9], entrepreneurial supply chain performance [10], and innovations in the supply chain [11].However, the method for assessing the readiness of an industry to manage GVC has not been widely reviewed.Forcing the implementation of a new management system without considering the level of readiness will create new problems.Likewise, applying a green management system to still-premature industries will even hasten the end of the industry's life cycle.Therefore, the GVC readiness assessment is an area of green evaluation that needs more investigation.
The proposed GVC readiness assessment method was developed considering the sociocultural, technological, economic, ecological, and regulatory (STEER) dimensions.STEER is the development of PESTLE (political, economic, sociocultural, technological, legal, and environmental).PESTLE is widely used in business environment risk management.This research employs STEER to avoid ambiguity between political and legal dimensions, as found in the PESTLE method.This problem is not found in the STEER because both dimensions are included in the regulatory dimension.The GVC readiness assessment method measures an industry's readiness level in managing GVC and finds improvement opportunities for implementing GVC.An in-depth literature review, interviews, and a pairwise comparison questionnaire were used in developing the GVC readiness assessment method.Furthermore, this article will review the stages of developing the assessment method, results and discussion, and conclusions.
Developing the GVC readiness assessment method begins with establishing the assessment dimensions.This study employs the STEER method to design the assessment since it can capture the aspects needed to determine green readiness.Furthermore, an in-depth literature review was conducted to find indicators for each STEER dimension.Interviews were conducted with experts from academics and practitioners from various industrial fields to screen and justify these indicators.The interview was conducted online using the Zoom meeting platform.The subsequent analysis employs the Analytical Hierarchy Process (AHP) to determine the Weight of each indicator.Five experts consisting of academics and practitioners were asked to fill out a pairwise comparison questionnaire, and then the results were calculated using the Super Decisions v3.2.0 software.In final step, a rubric is prepared for interpreting the assessment results.Figure 1 shows the stages of the assessment process.

Result and discussion
Following each step in the methods, an assessment tool is produced to assess industry readiness in implementing green from a value chain perspective.The STEER dimension evaluates each activity in the value chain: inbound logistics, operations, outbound logistics, marketing and sales, and service (see Figure 2).Five indicators are determined for selfassessment from each dimension with a Likert rating scale of 1-5.An explanation of the Likert rating scale used can be seen in Table 1.   3. The inconsistency ratio for each cluster of pairwise comparison questions has been confirmed to be no more than the limit of 0.1.

Sociocultural 1
The organization protects society's health, safety, comfort, and culture [12] 2 The organization promotes environmental values and norms [13] 3 The organization involves society in the environmental conservation program.[14] 4 The organization campaigns for environmental awareness [15] 5 The organization cares about an eco-friendly image [15] Technology 1 The organization uses safe, easy-to-repair, and recyclable technology [16] 2 The organization applies technology to reduce process complexity [15] 3 The organization uses energy-saving technologies or renewable energy [15] 4 The organization uses technology that reduces waste [15] 5 The organization recycles or refurbishes obsolete technology [15] Economical 1 The organization strives for operational efficiency and cost savings [15] 2 The organization conducts a cost analysis that considers environmental factors (carbon accounting) [15] 3 The organization makes investments to improve environmental performance [17] 4 The organization can increase value through green initiatives [18] Table 2. Cont.

5
The organization acquires incentives from implementing environmental initiatives.[19] Ecological 1 The organization strives for energy conservation [15] 2 The organization avoids excessive use of natural resources. [8] 3 The organization minimizes negative impacts on the environment (water, land, and air) [15] 4 The organization strives for ecosystem regeneration [15] 5 The organization measures environmental performance indicators [8] Regulatory The organization complies with government regulations regarding environmental protection. [20] 2 The organization establishes SOPs with environmental considerations. [21] 3 The organization implements AMDAL proactively.[22] 4 The organization regulates sanctions for any violation of environmental policies.[23] 5 The organization performs environmental assessments on business partners [24] Fig. 3. GVC readiness hierarchy model.The next step was to calculate the indicators' TS values using Equation (1).This value was converted into five predetermined GVC readiness score levels, as shown in Figure 4. TS with scores between 1-5 was categorized as level 1.This indicates that the industry does not know about GVC or is not ready to implement it.Thus, its strategic decisions do not comply with GVC principles.Level 2 is early readiness, with a TS >5 -10 score.Therefore, the industry is in the early stages of GVC implementation.The industry has heard about GVC and prepared itself for transformation toward its implementation.Level 3 is moderate readiness, with a TS >10-15 score.At this level, the industry is ready to transform into implementing GVC.Usually, the industry already has a support system for GVC, such as green technology, management, and operation with green concepts.Level 4 is mature readiness, with TS values between >15 -20.The industry implemented GVC, but not in all stages.Finally, Level 5 indicates that the industry already implemented GVC in most systems and is ready to imply a massive transformation through all systems.The TS for Level 5 was between >20-25.

Conclusion
A generic method for assessing an industry's GVC readiness has been successfully developed.This assessment encompasses the critical areas of the GVC.Furthermore, it is necessary to validate this assessment method by applying it in various industrial sectors.In addition, assessment results will help organizations identify how prepared or unprepared they are to implement GVC.This produces descriptive information for stakeholders to create an effective policy related to the GVC.Analysis of AHP priority weights showed that the regulatory dimension ranked highest, with a total weight of 0,55.It is then sequentially followed by sociocultural, economic, ecological, and technological.Therefore, strengthening the supervision and prosecution of violators of government regulations related to

Fig. 2 .
Fig. 2. GVC conceptual model.Table 2 presents indicator readiness from the literature review and has been justified by experts.Twenty-five indicators were categorized into five dimensions of STEER.Each dimension consists of five indicators.The indicators were used to create a pairwise comparison questionnaire based on the hierarchical model in Figure 3.The respondents for this process are five experts.The results are the Weight of each indicator, as in Table3.The inconsistency ratio for each cluster of pairwise comparison questions has been confirmed to be no more than the limit of 0.1.

Table 1 .
The assessment scale.