Carbon reporting methods used by companies often overlook or undercount emissions from their supply chains – adding up to billions of tonnes of missed emissions on an annual basis, a new Stanford-led study has suggested.
The study, The importance of multiregional accounting for corporate carbon emissions, which was published in the Nature Communications journal, pointed to the use of a popular statistical model that assumes all suppliers are located in the United States as a key reason for the shortfall.
“Supply chains are global, though, so a model that assumes everything is made domestically is going to give us a wrong answer,” Steve Davis, a professor of Earth system science at the Stanford Doerr School of Sustainability and lead author of the study, commented.
Multi-region model
In conducting the study, researchers compared the results from this single-region US model with estimates produced by a multi-region model more reflective of where suppliers operate, taking into account more than 400 companies and emissions data from 2023.
As they noted, the ‘US-only’ approach failed to account for around two billion tonnes of emissions linked to supply chains, or 10% of the total emissions.
A large share of the ‘missing’ emissions was linked to suppliers located in China – around 973 million tonnes of undercounted emissions – with sectors such as steel and concrete, construction machinery, fabricated metals used for cars and infrastructure, and electronic components exposing the most gaps.
Policy developments
The researchers also pointed to recent policy developments, such as the introduction of an expanded carbon border tariff that took effect in Europe in early 2026, as a reason for firms to ensure greater transparency when it comes to emissions tracking.
“A company that’s interested in reducing the emissions in their supply chain needs to know not just how big the number is, but also where these emissions are coming from,” Davis added. Read more here.
