About 20% of CO2 emissions come from multinationals’ supply chains

Hyperaxion Sep 9, 2020

A new study assesses the impact of multinational companies’ global supply chains on climate change.

A fifth of carbon dioxide emissions come from multinationals’ global supply chains, according to a new study led by University College London, in England, and Tianjin University, in China.

The article, recently published in the journal Nature Climate Change, shows how much these companies influence climate change.

About 20% of CO2 emissions come from multinationals' supply chains
(Credit: Unsplash).

In the research, scientists mapped the emissions generated by multinationals’ assets and suppliers and found that the global flow of investment occurs from developed to developing countries.

This suggests that emissions are “outsourced” to the world’s poorest countries.

The study showed the impact that multinationals can have when making decisions such as encouraging greater energy efficiency among their suppliers or choosing suppliers that emit less carbon dioxide.

“If the world’s leading companies exercised leadership on climate change — for instance, by requiring energy efficiency in their supply chains — they could have a transformative effect on global efforts to reduce emissions,” said Professor Dabo Guan, from University College London.

The authors also propose that emissions be assigned to countries where the investment comes from, and not to countries where they are generated.

“Assigning emissions to the investor country means multinationals are more accountable for the emissions they generate as a result of these decisions,” Guan said.

Scientists found that carbon emissions resulting from multinationals’ foreign investment dropped from a peak of 22% in 2011 to 18.7% in 2016.

For them, this was the result of three things: the trend towards “de-globalization”, the reduction of foreign investment, and the creation of new production methods that are less harmful to the environment.

Mapping the global flow of investments, the researchers found a steady increase in investments from developed to developing countries.

For example, between 2011 and 2016, the carbon emissions generated by United States investments in India increased considerably: from 48.3 million tons to 70.7 million tons.

In the same period, carbon emissions generated by China’s investments in Southeast Asia increased from 0.7 million tons to 8.2 million tons.

“Multinationals are increasingly transferring investment from developed to developing countries. This has the effect of reducing developed countries’ emissions while placing a greater emissions burden on poorer countries,” explained Zengkai Zhang, leader of the study.

“At the same time it is likely to create higher emissions overall, as investment is moved to more ‘carbon intense’ regions.”


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