Role of supply chain digitalization and global supply chain in decarbonization of natural resources sector supply chain

Abstract

Environmental management and decarbonization are becoming increasingly critical as industries seek sustainable development paths that align with global climate targets. As businesses aim to reduce their carbon footprint, integrating effective environmental strategies with technological advancements is essential. This necessitates a clear understanding of digital technologies and environmental policies to drive decarbonization efforts. In this context, this study explores the role of digitalization in reducing carbon emissions in the natural resources sector supply chain. Furthermore, it examines the role of supply chain mapping as a mediator in the relationship between supply chain digitalization and supply chain decarbonization efforts, providing a novel perspective on how technology can intersect to foster environmental sustainability. This research targets the metal sector supply chain, a significant contributor to global carbon emissions. The data for the study was gathered through a questionnaire administered to 246 employees from various levels of the metal industry in China. We employed Covariance-based Structural Equation Modelling (CB-SEM) using AMOs for analysis. Our results show that level digitalization of supply chain processes in the metal sector has a profound and direct impact on its supply chain decarbonization. Digital technologies facilitate more efficient resource use, improved energy efficiency, and the adoption of cleaner production methods. Importantly, the study identifies supply chain mapping as a crucial mechanism through which digitalization exerts its positive influence on decarbonization. Through detailed mapping, organizations can gain visibility over their entire supply chain, identifying carbon hotspots and opportunities for improvement that digital solutions can address. The novelty of this study lies in its systematic exploration of how supply chain mapping serves not just as a tool for transparency and efficiency but as a strategic facilitator of the beneficial impacts of digitalization on decarbonization.