Carbon accounting for supply chain management in the automobile industry

Abstract

Improving the management of carbon emissions and the development of cleaner production can be a demanding challenge for business and industry. Within this, accounting for carbon management requires quantification of a firm's direct and indirect emissions. Unfortunately, however, there is a lack of concepts and tools suitable for use in the measurement of carbon performance both in the production process as well as in the supply chain as a whole. The purpose of this paper is, therefore, to explore the role of environmental management accounting and, in particular, the eco-control approach for carbon management as part of the management of a firm's supply chain. Employing a case study of Korean automobile manufacturers, we explore the roles and usefulness of eco-control as a means of identifying and measuring carbon performance in a production plant. This study finds that eco-control can foster alignment between a firm's carbon management strategy and carbon performance measurement, and provides useful quantified information for corporate decision makers. In addition, viable mapping of carbon flow in production provides important opportunities to improve carbon performance within the supply chain.