Global supply- and demand chain database

For accelerating transition to a post-carbon society, my proposal is an enhanced, global supply- and demand-chain database for investors and shareholders. I argue that there are severe information bottlenecks for how much carbon is embedded into different goods and services in our economic system. Companies disclosure is incrementally improving on the Scope 1 & 2 emissions, but the emissions from supply-chain remain obscure. Also, we completely lack the tools for analysing companies demand-chains. For example, when analyzing an engineering company producing pulp boilers, one would analyse emissions from building the machines, yet the pulp boiler may likely be used in the Amazonas for pulp production, and thus contribute to depletion of rainforests.

We need better information about the supply- and demand-chain emissions to create a snowballing effect to accelerate action on climate change. Typically, people have little idea about the macro-level role different companies have in climate change simply looking at scope 1 & 2 emissions dramatically understates the overall impact. Imagine if we knew precisely how different goods flow through the economic system (supply-chain), and how they are used (demand-chain). If one wants to halt deforestation in the Amazons or mining in Subsaharan Africa, one could pinpoint at the companies and industries being heavily dependent on goods originating from those areas, or who supply items and machines to those industries.

To combat this challenge, my proposal is an enhanced, global database of supply- and demand-chains. Improved information disclosure on the value chains of companies is key for accelerating action of climate change. The beneficiaries would not only be the public, but also investors and public actors, who would understand more holistically how embedded carbon travels through our economic systems across companies and industries.

 

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Author

Miika Korja

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