Work

Major customers and carbon footprints along the supply chain

Year: 2025

Type: article

Abstract: This paper examines whether major corporate customers curb corporate carbon emissions along the supply chain. We show that suppliers with a more concentrated customer base have significantly lower carbon emissions. The results are robust to alternative measures of carbon emissions and customer concentration, alternative sample, alternative explanation, and various approaches to mitigate endogeneity concerns. The effect is more pronounced when major customers have made emission-reduction commitment, and when they are exposed to greater climate regulatory shocks and risks. Moreover, the curbing effect of major customers on supplier carbon emissions is stronger when customers have lower switching costs and stronger bargaining power. We show that one way through which suppliers reduce emissions is by adopting green technologies. Our study highlights the role of major customers in facilitating the transition to a low-carbon economy through decarbonization along the supply chain.

Source: Journal of Corporate Finance

DOI: 10.1016/j.jcorpfin.2025.102752

Authors: Saiying Deng, Tinghua Duan, Frank Weikai Li, Xiaoling Pu

Institutions: Kent State University, Ecole des Hautes Etudes Commerciales du Nord, Singapore Management University

Language: English

Topic: Sustainable Supply Chain Management

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Climate action, Responsible consumption and production

Open Access status: hybrid

Estimated APC paid: $4,140