Carbon accounting in the supply chain: investigating its antecedents and consequences for organizations

Abstract

Over the past decade, stakeholder attention to carbon accounting has intensified, with particular emphasis on greenhouse gas (GHG) emissions from firms’ direct operations (Scope 1) and purchased energy use (Scope 2). However, a substantial portion of emissions occurs beyond these boundaries, and firms continue to struggle to identify, measure, and manage emissions embedded in their supply bases. Limited data availability, voluntary disclosure, and supplier heterogeneity significantly impede accurate assessment of supply chain emissions. This paper addresses these challenges by (a) identifying the key drivers of GHG emissions in a firm’s supply base and (b) developing a novel empirical approach to measure supply base emissions. Using data from 1,142 firms and drawing on transaction cost and network theory, we show that greater geographical and industrial diversity significantly increases supply base emissions, and that buyer network influence and supply base interconnectedness moderate these effects.