Green Capability, Real Carbon Exposure, and the Validity of ESG Ratings: Evidence from Toyota’s Global Multi-Tier Supply Chain Network | Xiangshan Fu

Field l Discipline

• Environmental economics
• Complex networks
• Sustainable development

Summary

As corporate climate governance increasingly shifts beyond direct operations, evaluating firms only through their reported Scope 1 and Scope 2 emissions is no longer sufficient. For many multinational manufacturers, the largest carbon risks are embedded in upstream supply chains, where some suppliers may appear relatively clean on their own but still contribute substantially to the focal firm’s total Scope 3 emissions. Using Toyota’s global multi-tier supply chain as a real-world setting, this research examines how network-based carbon exposure reshapes supplier risk evaluation, how green capability influences firms’ actual decarbonization performance, and whether ESG ratings truly capture these substantive differences.

The overall aim of this project is to build an integrated research framework linking real carbon exposure, green capability, and external sustainability evaluation in global production networks. Specifically, the research will first identify key high-carbon suppliers in Toyota’s supply chain by comparing traditional standalone carbon indicators with network-based contribution measures. It will then examine whether firms with stronger Green Intellectual Capital (GIC) perform better in terms of peer-relative carbon intensity, future dynamic decoupling, and supply-chain position. Finally, it will assess whether ESG ratings reflect real carbon risk and transition capability, or whether they are more closely aligned with surface-level disclosure than substantive green capacity.

By moving from “reported emissions” to “network exposure,” and from “green claims” to “real capability,” this research seeks to contribute to the literature on corporate carbon accounting, green capability, and ESG validity. More broadly, it provides a coherent three-chapter agenda for understanding who the real carbon hotspots are in global supply chains, what capabilities help reduce such risks, and whether existing market evaluations identify them correctly.

Supervision by

• Promotor: F. (Franco) Ruzzenenti| Integrated Research on Energy, Environment and Society - IREES | ESRIG, University of Groningen.
• Co-promotor: Prof. dr. K.S. (Klaus) Hubacek | Integrated Research on Energy, Environment and Society - IREES | ESRIG, University of Groningen.

More information and contact details can be found on the personal profile of Xiangshan Fu