Look For Automakers To Lean On The Supply Chain To Meet Climate Net-zero Commitments

THE ALIXPARTNERS AUTOMOTIVE BRIEF

The automotive industry has been identified as a major source of global emissions. Automakers are responding, with many publicly committing to meet net-zero emissions targets (i.e., achieving a balance between the amount of greenhouse gas produced and the amount removed from the atmosphere) by midcentury, if not sooner.

Talk of decarbonizing supply chains is easy, but the actual work is extremely complicated. For automakers to meet their net-zero commitments, AlixPartners estimates that suppliers must drive 25% to 50% of the improvements. That is largely because Scope 3 emissions—emissions that come from indirect sources ranging from upstream purchased goods and services to downstream logistics (see chart)—account for the lion's share of total automotive-related emissions.