Study on the relationship between Scope 3 emissions and supply chain environmental disclosure

Abstract

Given that scope 3 emissions at an industrial supply chain level accounts for more than 75% of the firm’s total greenhouse gas emissions and are steadily increasing, it is crucial to address this issue to realize net-zero carbon targets. Furthermore, the recent phase-in of scope 3 emissions in the sustainable disclosure standards has doubled the efforts to measure, manage and disclose the overall environmental impact at the supply chain level. Hence, this study empirically analyzes the relationship between scope 3 emission and the level of sustainable supply chain disclosure based on 2017-2019 corporate data retrieved from global industries with high shares of scope 3 emissions- automobile and food industry. The results indicate that firms with higher scope 3 emissions tend to have higher level of sustainable supply chain disclosure, and the association varies depending on the boundary of scope 3 emissions. This study contributes to recent management and related research by evaluating the level of sustainability disclosure at the industrial supply chain level and empirically analyzing the relationship with its scope 3 emissions.