Carbon Dated examines the impact of multinational companies’ (MNCs’) net-zero plans on their supply chain. The study combines global opinion research among supply chain and sustainability leaders across the world’s largest MNCs with economic extrapolation of that data to quantify the impact on their suppliers in 12 focus markets.
The global opinion research was conducted between March and April 2021 with 400 leaders responsible for sustainability or supply chains across 400 of the world’s largest multinational corporations. Each business had at least one supplier based in either Bangladesh, China, Hong Kong, India, Indonesia, Kenya, Malaysia, Nigeria, South Africa, South Korea, Singapore or the UAE.
We used insights into MNC net-zero plans from our opinion research study and publicly available data to develop a three-stage economic model to estimate the impact of these plans within our 12 focus markets.
Stage 1 – collating the source data We created a global database including figures for exports, production, value added and employment in the 12 focus markets. In most cases, the most recent year of data is 2018. It included 44 economic production sectors in each market, which were then aggregated to provide the eight focus sectors for this study (oil and gas, mining and metals, chemicals, transport, real estate, soft commodities and aviation).
Stage 2 – calculating the export volumes at risk to suppliers The scale of current export activity was defined as the volume of exports to the OECD from each of the target countries, split by sector. We produced predictions for the year 2030 by combining the current data with growth rates from the baseline forecast in the E3ME macroeconomic model. These projections include an estimate of the impacts of COVID-19 on rates of economic activity. We estimated the ‘at-risk’ share of export activity using the results from the global opinion research. This at-risk share is defined as the volume of exports to OECD countries that could not continue due to MNCs taking a ‘zero tolerance’ approach to net zero and their supply chains (defined as those MNCs that will change suppliers if they endanger their transition progress). This figure represents the export volume at risk to suppliers that are not decarbonising in line with MNC net-zero plans, and also the size of the export opportunity for suppliers that are.
Stage 3 – calculating the overall market for net-zero suppliers In order to calculate the overall figure for suppliers that are decarbonising in line with MNC net-zero plans we summed the export volumes at risk in each of the 12 markets. This calculation included all economic activity within the markets (not just the eight focus sectors).