The influence of a globalized supply chain on corporate carbon management and disclosure

This study examines the impact of a firm's globalized supply chain, as indicated by international subsidiaries and international customers, on the carbon disclosure of the firm as well as that of its suppliers. We argue that firms pass on to their suppliers through the supply chain pressure for transparent information on carbon emissions originating from international forces. Using a sample of listed Chinese firms, we find that the carbon disclosure of both firms and their suppliers is positively associated with international subsidiaries and international customers. These results suggest that seeking legitimacy from international communities and satisfying international stakeholders in the supply chain drive corporate carbon disclosure. We also find that superior carbon management plays an important role in driving their suppliers' carbon disclosures. In addition, we find that improving suppliers' carbon disclosure strengthens firm–supplier collaboration. This study offers the first evidence of carbon disclosure in the supply chain from an international perspective and demonstrates the importance of international forces and sustainable supply chain management for improving carbon disclosure and transparency.