Assessing the Materiality of Value-Chain Emissios for Organizational Decarbonization Strategy Development: a Case Study of the Automotive Industry

Abstract

Industrial decarbonization strategies increasingly require organizations to measure emissions throughout their entire value chain, not just from direct operational sources. While corporate greenhouse gas accounting frameworks offer structured reporting methods, the significance of upstream supply-chain emissions is often poorly understood across many industrial sectors, especially in material-intensive manufacturing. This study evaluates the greenhouse gas inventory of an automotive parts manufacturer to assess the relative impact of value-chain emissions on organizational decarbonization efforts. By combining company-specific operational data with established emission factors, emissions were calculated across Scopes 1–3 to pinpoint the main sources within production and supply networks. Results reveal that over 90% of total emissions come from upstream supply-chain activities, with raw material production being the largest contributor to climate impact. Direct manufacturing processes and electricity use have smaller shares. These results emphasize that improving operational efficiency alone is not enough for significant emissions reductions. Instead, supply-chain strategies, material choices and procurement policies are the most effective leverage points for decarbonization. The study underscores the importance of understanding value-chain emissions for industrial climate management and provides evidence supporting increased focus on supplier engagement and material decarbonization in corporate sustainability plans. This approach offers practical insights for organizations with complex manufacturing supply chains looking to align operational decisions with long-term climate goals.