Losses in exports worth $18.7 billion per year are looming over local suppliers if they are unable to decrease carbon emission as per the plan of their major clients, based on the study by Standard Chartered.
The study named Carbon Dated, looks at the risks and opportunities for supplies in emerging and fast-growing markets as big corporations are transitioning to net-zero emission.
The study stated that MNCs expect to exclude 35 per cent of their current suppliers as they transition away from carbon.
On average, 73 per cent of MNCs’ total emissions is the supply chain emissions. The study stated that 67 per cent of MNCs say tackling supply chain emissions is the first step in their net-zero transition, rather than focusing on their own carbon output.
Standard Chartered Bangladesh, by referencing the study, stated that suppliers in 12 pivotal emerging and fast-growing markets can share in $1.6 trillion worth of business if they can remain part of the MNC supply chains.
With time running out to reach the goal of net-zero carbon goals, the MNCs are heaping the pressure on their supplies to become more sustainable, with companies based in emerging and fast-growing markets facing the biggest challenge.
64 per cent of the MNCs believe emerging market suppliers would struggle more than their peers in the developed markets to meet emission reduction targets. An additional 57 per cent is prepared to replace emerging market suppliers with developed market suppliers to assist the transition.
There are worries among the MNCs that the emerging-market suppliers are failing to keep pace with 2 key reasons, which are insufficient knowledge and inadequate data.
56 per cent of the MNCs stated that the lack of knowledge among the emerging market suppliers is a barrier to decarbonisation.
With MNCs struggling with the quality of data, two-thirds are using secondary sources for data to plug the gap left by supplier emissions surveys. A further 46 per cent say unreliable data from suppliers is a barrier to reducing emissions.
The study surveyed 400 sustainability and supply chain experts at MNCs across the globe.