Enabling Circular Value Chains via Technology-Driven Scope 3 Cooperation

Abstract

Despite major policy, industry, and individual efforts to reduce global environmental damage, the industry-induced carbon footprint continues to persist under changing geographical patterns. Having shifted significantly from advanced economies to emerging economies and developing world regions, greenhouse gas emissions from footprint-heavy activities, such as raw material sourcing and waste disposal, are not addressed by institutional and corporate solutions due to different regional standards or the overall absence of mandatory reporting. Rooted in the analysis of industry practices and past literature, the present research presents an integrated theme-based perspective on the interplay between focal firms and their suppliers in the context of advanced and emerging economies in underreported Scope 3 activity carbon footprint management. We argue that it is technology-driven unified efforts, which enforce factors such as traceability, transparency, and predictive and prescriptive capabilities within Scope 3 activities, that need to be addressed to ensure the activation and maintenance of a truly sustainable global value chain (GVC). By departing from traditional command-and-control practices and extending upon the existing governance-focused framework of sustainable value creation, this paper highlights the essential co-creating stance of non-focal actors in achieving a circular approach to sustainability within GVCs.

1. Introduction

In 2022, according to the voluntary disclosure of 32 companies from the United States and Japan, the two leading developed countries in terms of the output produced for that year [1], the average amount of total Scope 3 greenhouse gas (GHG) emissions was assessed at 12,598,961 kilotons per producer, which is approximately 22 times the amount of the pollution emitted in Scope 1 and 2 combined for the same firms (Figure 1). Indeed, the only industry proven to display a slightly larger share of emissions directly produced by the company and their purchased energy, Scope 1 and 2 emissions within the entirety of the value chain, is the utilities sector, with roughly 49% of the emissions associated with Scope 3 specifically, and the rest belonging to Scope 1 and 2 combined [2]. Most industrial production processes, however, are strongly correlated with a high proportion of indirect pollution compared to the fraction of direct emissions disclosed by reporting companies.

Indirect Scope 3 emissions, far outweighing the consistently reported and regulated Scope 1 and 2 carbon footprint, include major components of the modern value creation cycle embedded in the supply chain of corporations, namely, their upstream (raw material extraction, transportation and distribution, leased assets, and others) and downstream (the use of sold products and end-of-life treatment, among others) activities [4]. It has been reported that such supply chain emissions are responsible for over ⅔ of firms’ entire climate impact, and they are both difficult to quantify and conveniently disregarded by corporations in the absence of reporting standards, especially in developing regions [5]. This is to say that emerging economies have taken the role of actors responsible for impact-heavy activities, including those beyond upstream activities, such as material extraction, as well as some parts downstream of a product life cycle. Essentially becoming dumping grounds for resource-intensive processes of product creation motivated by the notion of cost advantage, it is specifically emerging economies that have taken the Scope 3 environmental burden of global supply chains (GSC) and value chains (GVC) [6].

This claim is attested by the notions of carbon loopholes and carbon leakage theories, which are placed within a cross-border context and essentially argue that major parts of the carbon footprint embedded within a unit of value traded are left unaccounted for due to the complexity of modern GSCs. More precisely, highlighting a certain reduction in GHG emissions in advanced countries, current policy assessment and sustainable supply chain management (SSCM) practices ignore persistent and rising global emissions that are the result of the recent concentration of impact-heavy Scope 3 supply chain stages in emerging economies, which are prone to weaker sustainable regulatory enforcement [7,8]. Indeed, annual CO₂ emissions by region have shifted significantly in the past decades from advanced economies, such as the US, to emerging ones: China, India, and African countries (Figure 2).

To mitigate these risks and enhance sustainability performance, multinational firms have primarily relied on command-and-control and third-party assessment mechanisms by first establishing inter-corporate supplier standards mostly applicable to Tier 1 suppliers, characterized as the direct suppliers, and then attempting to “enforce” compliance through external monitoring and audits [10,11]. While the given techniques are correlated with some sustainability improvement within the primary level of the supply chain, such control rarely reaches beyond the Tier 1 scope and almost never affects sub-suppliers, which ultimately fails to generate long-term and systemic environmental refinement within GSCs [11,12]. This, in many cases, is explained by the absence of international and local regulations, which could help create supervision and compliance mechanisms for cross-border control of GSCs based on the specific regional context, and further aggravated by severe technological constraints of emerging market suppliers, which are rarely taken into account at the focal firm level when striving to initiate an almost top-down push for a more green value creation cycle [13,14].

An alternative, increasingly advocated by sustainability agencies and researchers, is collaboration between focal firms and their suppliers [13,15]. With some researchers arguing that collaborative efforts should be either combined with command-and-control or naturally follow the prior, with the two equally effective [16,17], others directly compare the mechanisms, strongly maintaining that it is cooperation and shared initiatives rather than regulatory and assessment practices that are more beneficial to the sustainability agenda in the long run [13,18]. While recommendations suggest active intra-value chain information, knowledge, and other types of resource sharing and formation of long-term partnerships aided by technology progression [18,19], the specifics of how technology can drive the cross-border circular economy (CE) cycle by enabling collaboration between focal firms and their globally scattered suppliers remain underexplored. Placing this issue within the context of the Global Sustainable Supply Chain and, specifically, the idea of Advanced and Emerging Market interactions with a focus on unequal environmental burden-sharing, this allows us to highlight the advantages of technology-driven collaboration between primary producers and their emerging market suppliers toward a reduction in industry-wide GHG beyond Scope 1 and 2 and a single region setting, which is vital for the long-term sustainability agenda.

This research argues that technology-enabled cross-border collaboration between principal firms and suppliers is essential for embedding circular economy principles into GSCs. Circularity demands a closed-loop system where both upstream (raw material extraction and procurement) and downstream (reuse, recycling, and remanufacturing) processes are aligned toward sustainability. This alignment cannot be achieved through compliance-driven models alone but requires a cooperative technology-empowered approach. We conducted a theme-based analysis of industry cases and past literature to identify and illustrate key patterns in technology-driven Scope-3 unified initiatives between focal firms and their suppliers. Placing identified cooperative measures in the context of emerging and advanced economies, this study contributes to bridging the gap between sustainability policies, digital innovation, and practical implementation in global supply chains. Namely, we address the advantages of cooperative rather than hierarchical sustainability-oriented strategies and actions in GVCs, arguing that it is technology-driven firm-supplier collaboration that can drive circularity through not simply enhanced compliance, but through direct integration of such actors into strategic decision making and other governance mechanisms.

2. Literature Background

2.1. Sustainable Management of Global Supply Chains and Circular Economy

Sustainable supply chain management (SSCM) has emerged as a critical framework for advancing the circular economy (CE), particularly within global value creation processes. According to recent research, it has been demonstrated that SSCM is responsible for ensuring that GVCs transform into closed cycles with zero waste under the idea of the 3Rs [20,21]. A key enabler of such a circularity mechanism is claimed to be Reverse Logistics, which essentially connects the end-of-life treatment of a product with a new lifecycle by reintroducing used materials back into production cycles [22,23]. Largely ensuring that products and counterparts are reused, reduced, and recycled, circular product lifecycle design has been proposed as one of the major solutions to the Scope 3 indirect carbon footprint due to its focus on minimizing emissions embedded in a new value creation process through material recovery, redistribution, and improvements in overall production efficiency [24]. More importantly, the focal firm has already been largely recognized as the sole driver of circularity initiatives, where both internal guidance and strategies (Reverse Logistics), as well as compliance with external policies, are identified as major sustainability mechanisms within the supply and value chains [20]. However, the notion of GVCs and a geographically scattered supply chain is largely missing from the framework. As such, SSCM, guided by the principles of CE, presents a viable framework for addressing Scope 3 emissions, especially within the complex interplay between corporations in developed nations and their suppliers in emerging economies.

2.2. Circular Economy and Scope 3 Carbon Footprint

Within this framework, SSCM of Scope 3 activities, encompassing both upstream and downstream parts of the entire value chain, plays a pivotal role in ensuring circularity. It is particularly visible within the integrated principles of the 3Rs and the extended 9Rs, including refuse, rethink, reduce, reuse, repair, refurbish, remanufacture, repurpose, and recycle [25]. As such, the volumes of indirect emissions, constituting the most significant portion of a product’s carbon footprint, can be decreased significantly through CE methods. This is to say that sustainable supply chain management based on CE principles directly emphasizes minimization of wasted resources through active reintroduction of already utilized inputs [26], which in turn may ensure a more optimized product creation cycle in terms of Scope 3 emissions levels embedded within supplier-related activities such as material sourcing and recovery and other pre- and post-consumer processing stages of GVC.

This is primarily achieved through the CE strategies, including product redesign for durability and recyclability of its counterparts, which is responsible for reducing the need for raw material extraction, waste management, and external manufacturing processes [27,28], all significantly associated with Scope 3 emissions. However, it is essential to notice that such SSCM CE mechanisms inherently imply the need for co-innovation capabilities, where a focal corporation has to assess not only the stages of product life under its direct gaze but also reach stages of lifecycle beyond that, including sourcing of counterparts, product’s distribution, use, processing, and end-of-life treatment practices through its supplier network directly responsible for each of the stages. We argue that this is essential to ensure that circular economy practices determined by the reporting firm are both effective in terms of tying the ends of the product life cycle by essentially connecting downstream and upstream flows and respond to the Scope 3 environmental issues occurring within GSCs. As a result, a GSC designed for circularity should inherently address Scope 3 activities [29].

2.3. Advanced and Emerging Market Cross-Border Interactions for Circular Global Value and Supply Chains

It can then be argued that Scope 3 emissions represent a critical nexus for interactions between focal firms in advanced economies and their suppliers in emerging economies. These suppliers are often deeply involved in upstream activities like raw material procurement and downstream processes such as end-of-life treatment, including waste collection and disposal [30]. Given that Scope 3 activities encompass these comprehensive GSC interactions, the Global North–South dynamics concept becomes particularly relevant to the issue. Ultimately, a truly sustainable and circular supply chain placed within the global context calls for a well-established focal firm–supplier interaction where both representatives of advanced and emerging economies are able to sync up their respective activities and responsibilities for reduced environmental impact and increased resource efficiency.

Some recent research has touched on the subject of emerging economies acting as both sourcing and dumping grounds of the current value chains, essentially being responsible for the base material supply and the end-of-life treatment of products used in advanced nations. Most agree that the region’s industry-imposed obligation has been largely associated with immense local environmental burden, which is not accounted for by reporting focal firms due to the specific focus of sustainability reporting on the Scope 1 and 2 agenda, as well as being overall lost in complex international trade flows. This, in turn, aggravates the long-term global consequences of the issue of negligence by transforming it from a regional to a cross-border scale [6,9,30]. Justified through the notion of cost and competitive advantage [31], such environmentally damaging and underregulated upstream and downstream supply chain flows continue to grow with prominent cases in the electronics and chemical industries [30,32,33]. It is then possible to conclude that the cheaper and more efficient Scope 3 activities, such as raw material sourcing and product disposal, are becoming, given the persisting lack of cross-border indirect emissions accountability, a more significant incentive for focal firms in advanced economies to increase their production capabilities and output. All of this essentially leads to a more prominent total global carbon footprint that neither party is lawfully accountable for. No research to our knowledge, however, has explicitly reviewed how a more rigid SSCM CE-focused buyer–supplier interaction can work in favor of carbon neutrality through a reduction in reliance on continuous virgin material extraction and disposal in the context of advanced and emerging economies. This type of interaction is essential because it directly addresses the environmental impacts embedded within Scope 3 emissions, fostering a more sustainable and equitable global supply chain, as well as potentially reducing the environmental burden shift of emerging economies.

In this sense, the present research attempts to examine the sustainable management of primary producers located in advanced economies with a focus on their suppliers, which are predominantly based in emerging economies. This focus allows us to review indirect emissions produced by the focal company within upstream and downstream product pathways, including raw material procurement and disposal. As such, this study highlights the interdependence between advanced economies, where primary firms face stringent sustainability regulations, and developing regions, where these emissions are often displaced due to weaker environmental policies, cost-saving practices, and comparative advantages. This research underscores the need to address this global shift of emissions and explores how technology-driven collaborative efforts between focal firms and suppliers in developing countries could not only effectively mitigate Scope 3 emissions and contribute to a sustainable circular economy within GSCs but also effectively create conditions to ensure circularity of the entire production process.

Precisely, through a theme-based analysis of present literature and industry case studies, the present research aims to answer the following questions:

• What are the existing and proposed types of collaborative SSCM efforts between the principal firm in an advanced economy and its emerging economy supplier?
• Through what technology-driven mechanisms can a collaboration-based SSCM of GSCs enhance CE initiatives, which are largely associated with minimizing environmental damage on a global level?
• How can technology-driven focal firm-emerging market supplier collaboration be effective in fostering long-term sustainability outcomes in the context of cutting down on global emission release?

3. Methodology

In order to provide a comprehensive review and analysis of sustainability-oriented technology-driven forms of cooperation between buyers and suppliers, we implemented the methodology of a theme-based analysis of present literature and industry cases. The approach enables a complex discussion of proposals within academia and factually implemented or initiated cooperation measures for cross-border connectivity, aiming for a sustainability agenda. Namely, a theme-based analysis of present research on related issues of the notion of cooperation and collaboration, the role of high technology in enhanced information sharing, and industry case studies based on self-disclosed primary (ESG and general annual) reports of companies are used for discourse analysis.

A thematic analysis of present literature has been proven to be a viable methodology in the field of research on management of sustainability practices due to its flexibility and ability to identify patterns across massive qualitative data [34,35]. To be more exact, it is possible to argue that with the sustainability concept encompassing a wide range of environmental and socioeconomic factors, it is beneficial to undertake an approach that could enable a comprehensive view of the underlying issues. Traditionally, thematic analysis entails the creation of specific codes and themes for literature analysis, with codes being larger concepts and themes depicting specific topics within the codes [36]. As the present research focuses on a narrow concept of technology-enabled cross-border cooperation within Scope 3 activities for CE, a non-standardized theme-based analysis with identification of solely themes is implemented. This partial approach allowed for sufficient flexibility yet methodological stringency to review a diverse range of sources. Namely, past scientific literature was used to actively identify and inform themes, which were then incorporated into real industry practices for further analysis. Recent research published within the past 10 years on the issues of supply chain cooperation and collaboration, the role of high technology in enhanced information sharing, and technological advancements in SSCM is taken into consideration for the analysis, ensuring coverage of up-to-date and applicable sustainability initiatives.

The integration of industry cases within the themes enables the present research to systematically review the level of implementation of cross-border cooperative SSCM measures and identify possible gaps. A number of leading companies in chemicals, fast-moving consumer goods, diamonds, and electronic industries with extensive global supply and value chains, such as LG Chem, Samsung, De Beers, Unilever, and Solvay, are reviewed due to their stance as fast-moving innovators in respective fields with more extensive than typical reporting of sustainability agendas and respective results. The companies’ sustainability, ESG, and general reports, as well as public announcements and pages from the official websites for the years 2021–2024, were reviewed, as some firms’ reports for the preceding year were unavailable during the data collection period. Given the multi-layered nature of Scope 3 activities in the cross-border setting of GVC and GSC, a mixed methodology of non-standardized theme-based analysis of current literature and select industry cases provides both theoretical depth and empirical context to the discussion. The dual approach makes it possible to capture normative theme-based prescriptions illustrated by examples of primary firm–supplier dynamics in industry settings, which enables the development of a GVC framework as an extended version of a previously proposed model of sustainable manufacturing for a circular economy [20].

4. Theme-Based Analysis of Current Research and Industry Cases

The funnel diagram (Figure 3) summarizes the undertaken theme-based analysis of circularity-oriented cross-border cooperative practices, where each theme, starting from the unified strategies, feeds into the next theme by providing both theoretical and industry-case ground for identifying and informing the overall objective of circularity via closed-loop GVCs. Although technology can also be considered a driving supplementary force rather than a stand-alone theme, it is crucial to review the prominent tools and mechanisms through which circularity can be addressed in the context of a global-scale firm–supplier relationship.

Collaboration between focal firms and suppliers has been increasingly recognized as a cornerstone of sustainable supply chain development, where enhanced connectivity across the entire value chain, including focal firms and suppliers, is expected to lead to significant green improvements. We argue that the pursuit of dynamic cooperation between advanced and emerging economies in the context of focal firm–suppliers’ collaborative relationship within Scope 3 activities fosters beneficial grounds for the notion of material and other resource sustainable circularity. This means that such cross-border communication can create opportunities for technology transfer and capacity building in sustainable practices across entire industries, without regional limitations. Moreover, cooperation directly incentivizes suppliers’ active participation in supporting GVC environmental conduct that takes into consideration the regional context of proposed standards, ensuring that focal firm-driven SSCM policies are feasible and appropriate in the locale. That is because global supply chains, due to their complexity, may fail to address such factors due to the negligence of regional and technological constraints [37]. By engaging suppliers in initiatives such as eco-design, closed-loop systems, and waste reduction, focal firms can make their operations feasible and advantageous to all GVC actors throughout their extended supply chains. Technology, specifically technology-sharing in this sense, may play a pivotal role in enabling such cooperative efforts for GVC participants, namely, buying firms and their globally scattered suppliers, to receive crucial information on, analyze, and co-improve upstream and downstream processes for enhanced GHG reduction. As such, argued further through the theme-based analysis, we demonstrate how effective CE-based SSCM calls for cross-border buyer–supplier cooperation rather than mere assessment, emphasizing the importance of collaborative practices between the two parties in Scope 3 activities.

4.1. Unified Strategies (Cooperation, Collaboration, Inclusion, and Engagement)

The essence of unified strategies of primary corporations placed in advanced economies and their globally dispersed suppliers can be characterized and shaped in a number of ways, all of which are argued to ensure that sustainability flows “across their [entire] supply chains” [38]. Potential notions of collaboration, cooperation, inclusion, engagement, and others have been applied extensively to the sole idea of coordinated and unified sustainability measures attempted by the counterparties of GVCs. For instance, Chauhan et al. [19] grouped such initiatives into topics of collaborative innovation, information and knowledge sharing, resource sharing, transportation, product greening, advertising, inventory management, and forecasting, encompassing almost the entirety of the value chain with strictly cooperative notions. However, other researchers have frequently referred to some level of coordination as “supplier engagement” or “external horizontal collaboration” [15], still demonstrating a more tier-based and segregated approach to supply chain, where focal firms are seen as the driving force of the sustainability practices and standards due to regional regulatory measures, while suppliers are largely depicted as followers rather than co-initiators. Moreover, some research does not differentiate between strictly joint and focal firm-driven practices, grouping producer-driven and mutual incentives into collaborative efforts [18].

It is thus crucial to define a more specific definition of collaboration between firms and suppliers within the context of international cooperation between the two sides in Scope 3 activities. The present research refers to collaboration as both co-creative practices, as well as an overall inclusion of external downstream and upstream supply chain actors into the establishment of a greener GVC. We argue that such an approach enables not only the review of a larger share of technology-driven cooperative and inclusion practices for a more systemic framework, but mainly the emphasis of the idea of the progressive state of current industrial practices, highlighting the persisting need for focal firm-enforced governance in the context of sustainable cross-border value creation.

4.2. Technology-Driven Cooperation

We maintain that it is the integration of advanced digital technologies that is a crucial component in facilitating effective collaboration in cross-border SSCM for CE. Precisely, a continuous flow of information and knowledge sharing, enabled through such tools as AI, Internet of Things (IoT), blockchain, and Cloud SCM, is argued to be the major force fostering dual-advantageous cooperation throughout the entirety of the supply chain. We demonstrate that high-technology-based data harvesting, which is then transformed into information and actionable insights, enhances important factors such as traceability, transparency, predictive capabilities, and integration, which in turn can enforce circularity in upstream and downstream processes. Moreover, it is precisely technology that can aid firms in overcoming the most frequently faced points of friction that tend to be associated with GSCs: the inability of primary firms to ensure continuous monitoring and capacity building of their developing suppliers due to physical barriers.

Additionally, it is important to note that technological enablers in this sense are maintained as a shared capability, which is primarily provided by focal firms from advanced economies. This idea goes hand-in-hand with research and institutional proposals, calling for governance (producer)-driven expertise and resources in reducing the environmental impact of indirect emissions sourced by suppliers [20,29]. To further illustrate this point, the concept of embedded corporate social responsibility (CSR) in the global supply chain can be demonstrated, as it emphasizes the need for technological infrastructure creation and maintenance to ensure CSR extends beyond the focal firm’s own value creation processes to its immediate suppliers and subsidiaries [39]. As a result, this approach further showcases why we argue that it is essential to review primary firm-driven supplier inclusion incentives, as the nature of producer–supplier cooperation in GSCs, encompassing advanced and emerging economies, may not have yet reached the stage of a perfectly symmetric partnership.

Ultimately, high-technology solutions are integral to enabling efficient collaboration in largely disintegrated Scope 3 activities, encompassing upstream and downstream flows of product creation. They allow for transparent information sharing, efficient tracking, and co-development, ensuring that sustainability initiatives are both effective and equitable across the entire GSC.

4.3. Transparency and Traceability: Ensuring Error-Free Objective Information Flow

As can be concluded from the previous section, the notions of transparency and traceability are closely related to the idea of tracking and sharing untampered information and knowledge. Transparency, in this regard, refers to information that is timely, error-free, and free of subjective intervention, while traceability encompasses the ability of all GVC actors to access this information and identify its truthful origin. Both notions are often linked due to identical monitoring technologies used in supply and value chains to both track the information and ensure its transparency.

It is precisely the notion of transparency within the entirety of the product creation process that is the backbone of sustainable procurement and management in GVCs. Whilst most heavy regulations are applied to focal firms, it is often their direct voluntary responsibility to track environmental adherence of their suppliers, as most emissions of such kind fall in the category of Scope 3 byproducts. As such, the critical issue of attempted greenwashing is often associated with auditing processes, the reports of which have been frequently noted to be ineffective in surfacing environmental problems and misconduct at a supplier level, while giving buyer companies the image of ethical sourcing [40]. Furthermore, third-party auditing, which still remains one of the widely used methods of regulatory verifications, is prone to “deception”, human error, and more intense methods of “hiding” prompted by suppliers’ own incentive to avoid any sort of penalties and reputational damages [41]. For instance, as noted by LG Chem, the chemical manufacturing firm that initiated an external auditing procedure of one of their main suppliers, Huayou Cobalt and CDM, attempted to conceal facts and mislead auditors, which were clearly exemplified during the procedure [42,43].

In this regard, technology-based solutions, such as blockchain and IoT, have been proposed and demonstrated as viable alternatives or additions to third-party assessments. Namely, blockchain technologies, essentially built for inviolable, secure, and connected storage of data sourced from different parties, have been argued to ensure full transparency within multi-tier supply chain settings, as well as lead to significant positive environmental impact by enabling a reduction in GSCs’ carbon footprint [44]. Whilst dramatically decreasing paper flow and fuel used in auditing report-making processes, such as transportation, investment, and others, blockchain record-keeping also promotes SSCM traceability and monitoring capabilities [44], which are both integral components for establishing simultaneously tamper-proof data flow and continuous connectivity between producers and their suppliers by breaking down regional constraints binding most GSCs. Consequently, it may be proposed as a valuable substitution or simply aid in the process of human assessments of the level of adherence of geographically distant suppliers to environmental and socioeconomic codes of conduct induced by primary producers, encouraging less corrupted and faulty reporting.

Fundamentally, blockchain technologies are set to provide an environment for storing, managing, and using encrypted data sourced from the entirety of the supply chain journey and its counterparties, resulting in a chronological and reliable information bank [45]. Specifically in the context of Scope 3 cross-border cooperation between suppliers and focal firms, both upstream and downstream activities data can be largely utilized through blockchain, AI, and IoT solutions. For example, in 2021, a Belgian chemical company, Solvay, incorporated blockchain into the upstream flow of their supply chain in India by initiating transaction record-keeping for local farmers to track and oversee the entire journey of their farmed plants to Solvay’s sold products, which consequently translated into improved farming training capabilities and farming volume planning and brought attention to more just raw plant pricing based on data sourced to around 2000 guar producers in the first year [46,47]. In a similar manner, yet a different focus, De Beers, a British company, initiated a blockchain and IoT-based platform called Tracr in order to track the full path of diamonds from mining to retail to enhance consumer trust through an ongoing technology-driven coordination with their suppliers, creating a sustainable approach of the company in the market [48]. Such technology integration in upstream processes can potentially allow focal firms to reduce indirect carbon footprint levels by reducing the need for extensive external audits of main operations activities, which are some of the most unaccounted for yet still significant contributors to Scope 3 emissions [4] and drive more ethical and green activities among its supplier network through tamper-resistant data collection and constant connectivity with raw material suppliers from emerging economies and developing countries.

To extend on the environmental effects of technology-enabled inclusion of suppliers from emerging economies and direct collaboration within SSCM practices, the case of transformation within Unilever’s palm oil supply can be used as an example. Since 2016, in response to evidence linking crude oil production to deforestation, the company, heavily reliant on the resource, has begun initiating a gradual shift to fully certified sourcing only [49]. This case also demonstrates that technology-driven cooperative sustainability measures in raw material extraction and refining can become more beneficial solutions in the long run than prompt switching to alternative sourcing. This is due to the fact that although other types of oil are often claimed to entail a lower carbon footprint in sourcing, this is largely due to the overall smaller volume of extraction of their alternatives [50]. As such, starting off from roughly 20% of certified volume of all the palm oil sourced, Unilever started a global traceability and monitoring system with an initial focus on Indonesian and Malaysian counterparts in order to monitor the sourcing of palm oil, which allowed local hubs, refineries, and the focal company itself to trace the real volumes of deforestation and biodiversity loss and reach almost complete certification coverage across their palm oil supply network [49,51,52]. This was largely enabled by cooperative measures between the focal company and its suppliers in emerging world regions, stemming from continuous information, knowledge, and expertise-sharing in the form of training and necessary technology introductory trial runs. In this sense, the integration of cooperation-based traceability and transparency technologies into SSCM of the primary firm played a key role in providing the necessary foundation for identifying sustainability gaps in their GSC and launching appropriate co-innovative measures for a greener Scope 3.

4.4. Prescriptive and Predictive Capabilities: Gaining Understanding and Improving Decision Making in Circular GVCs

Moreover, as stated before, by enabling well-established connective capabilities between buyers and sourcers, technology can also enhance sustainability in the downstream activities of the GSCs. Technology-driven cross-border cooperation between suppliers and focal firms makes it possible for all actors involved to assess the current state of the entirety of GVC and enhance the comprehension of the product lifecycle beyond each actor’s obstructed view of the pipeline. Having access to more complete information with a diverse range of sources from different parts of the GVC may, in turn, improve their mutual decision making for a more sustainable course of action (prescriptive capabilities), as well as determine potential downfalls linked to the current state of events (predictive capabilities).

What could be considered waste is instead reintroduced into the value chain as a new input, which essentially minimizes the need for overly depleting material extraction [44,53]. Equally crucial is that, while previously outsourced to developing countries, high volumes of waste, which are often piled in landfills and not utilized or recycled, can be disposed of in a more sustainable manner, entailing a lower carbon footprint. A prominent case of such a Scope 3 downstream activities sustainable gap is e-waste management and recycling, which have been highlighted as one of the major facilitators of the global emission leak from advanced to emerging economies, as a larger share of waste management processes is held by developing world regions with fewer sustainability capabilities [31]. A number of electronic companies, with prominent waste management counterparties located in emerging economies, have initiated collaborative and self-measures for responsible waste management through active product recycling [54].

For instance, by co-developing necessary technological infrastructure and knowledge capabilities, given the provision of the essential regional context, Samsung was able to establish continuous cooperation with seven recycling companies in India and launch new products consisting of 90% of recycled materials [54,55]. More importantly, through cooperative technology-based responsible waste collection, the producer was able to enhance its understanding of the overall usage of products by consumers, giving insight into potential extension of product life, which can directly lessen the Scope 3 downstream environmental footprint. Finally, by actively utilizing 16% of recycled parts recovered from waste management and reintroduced in new cycles of value creation, the focal firm was able to significantly reduce its carbon emissions in material sourcing [56]. This is especially crucial to note in the context of primary producers incorporated in advanced economies, with their product end-of-life treatment co-actors placed in emerging world regions.

Overall, cross-border cooperation, along with the inclusion of suppliers into the primary firm’s SSCM, can be mainly attributed to the use of technology for establishing or enhancing information sharing between the focal firm and its co-actors within upstream and downstream activities. Indeed, it has been largely discussed that it is information “exchange” and “logistics” that ultimately lead to the sustainability of supply and entire value chains through tracking of material pathways and promoting data-driven decision making based on cooperation [57,58]. As summarized in

Table 1. Theme-based analysis breakdown: theme sources and industry cases.

Themes	Sources
Unified Strategies	Sudusinghe, J. I.; Seuring, S. Supply chain collaboration and sustainability performance in circular economy: A systematic literature review. [15] Allenbacher, J.; Berg, N. How assessment and cooperation practices influence suppliers’ adoption of sustainable supply chain practices: An inter-organizational learning perspective. [18] Chauhan, C.; Kaur, P.; Arrawatia, R.; Ractham, P.; Dhir, A. Supply chain collaboration and sustainable development goals (SDGs). [19] Klebert, S. Corporate climate action: 3 essential steps to reduce Scope 3 emissions. [38]
Technology-driven Cooperation	Kazakova, E.; Lee, J. Sustainable Manufacturing for a Circular Economy. [20] Butt, A. S.; Alghababsheh, M.; Sindhwani, R.; Gwalani, H. Role of supplier engagement to reduce Scope 3 emissions in circular supply chains. [29] Andersen, M.; Skjoett-Larsen, T. Corporate social responsibility in global supply chains. [39]
Traceability and Transparency	Mefford, R. N. Sustainable CSR in Global Supply Chains. [40] LeBaron, G.; Lister, J. Ethical audits and the supply chains of global corporations. [41] Audit Report on Huayou Cobalt. LG Chem. [42] Audit Report on CDM. LG Chem. [43] Upadhyay, A.; Mukhuty, S.; Kumar, V.; Kazancoglu, Y. Blockchain technology and the circular economy: Implications for sustainability and social responsibility. [44] Gaur, V.; Gaiha, A. Building a Transparent Supply Chain. [45] Solvay launches blockchain platform for its Guar sourcing supply chain to empower Indian farmers. Solvay. [46] 2021 Annual Integrated Report. Solvay. TracrTM. De Beers. [47] Palm Oil Story. Unilever. [49] Beyer, R.; Rademacher, T. Species richness and carbon footprints of vegetable oils: can high yields outweigh palm oil’s environmental impact? [50] SAP, Unilever pilot blockchain technology supporting deforestation-free palm oil. [51] Sustainability. Unilever. [52]
Predictive and Prescriptive Capabilities	Bekrar, A.; Ait El Cadi, A.; Todosijevic, R.; Sarkis, J. Digitalizing the closing-of-the-loop for supply chains: A transportation and blockchain perspective. [53] 3 Ways We Are Reducing E-Waste. Samsung. Care for Clean India. Samsung. [54] Circular Economy. Samsung. [56] Palm Oil Story. Unilever. [49] Abalansa, S.; El Mahrad, B.; Icely, J.; Newton, A. Electronic waste, an environmental problem exported to developing countries: The GOOD, the BAD and the UGLY. [31]

, present theme-based analysis demonstrated how such broad concepts of supply chain connectivity for sustainability may be narrowed down to specific upstream and downstream processes and technologies, as well as depicted through the cross-border Global North and South interplay in response to the global emissions shift.

5. Limitations and Future Research Opportunities

Given the limited availability of industry Scope 3 data, the present research is based on companies’ self-reported voluntary disclosures of sustainability initiatives, which are largely provided in the form of textual content. As such, a quantitative analysis of claims and effects may be necessary for further research. Moreover, a non-standardized approach to methodology was undertaken, which allowed for flexibility in reviewing a more diverse range of sources in a comprehensive manner for the identification and illustration of a selected range of themes. This also suggests that future research may uncover more themes as industry practices continue evolving and circularity-oriented technological cross-border cooperation gets implemented in various sectors with different contextual premises. Finally, further comparative analysis of such unified strategies may be necessary to investigate sector-specific application of practices outlined.

6. Discussion and Framework Extension

What can be seen through the theme-based analysis is that technology-driven cooperation in Scope 3 activities creates opportunities not only for the primary firm to assess the state of their suppliers’ and downstream actors’ green conduct and enhances firms’ capabilities in initiating Reverse Logistics through continuous correspondence. This, in turn, can be effectively used to create the necessary conditions for SSCM circularity via more efficient raw material sourcing and their reintroduction into a new value creation cycle.

As such, rather than viewing cooperation between primary firms and suppliers in Scope 3 activities as an object within SSCM for circularity, we present an integrated perspective on the framework of sustainable manufacturing for a circular economy. Previously proposed in the form of three interconnected pillars of the sustainable supply chain, materials, production and design, and governance and management, the framework highlights the necessity of ensuring specific technological practices and methods in driving a green and socioeconomically efficient product creation cycle [20]. In this sense, it is solely the focal firm that is highlighted as the driving force behind circularity, which generally fails to account for the global scale of the value chain.

To develop this argument, we placed supplier–focal firm cooperation at the forefront of the GVC CE pillars, where factors of traceability and transparency and prescriptive and predictive capabilities driven by technology directly feed into all four pillars, acting as the governing body that activates and integrates circularity (Figure 4). As such, rather than viewing circularity as the body driven through a top-down approach feeding into strategies for its value chain, more complex circularity of the GVC is ensured via direct integration of indirect upstream and downstream Scope 3 actors. Suppliers, then, not only comply with sustainability requirements through enhanced traceability and transparency but also actively contribute to strengthening this governance through improved prescriptive and predictive capabilities.

This is because collaboration and cooperation in Scope 3 activities, including both upstream sourcing and downstream waste management, involve and address repeated and new material design, logistics, organizational governance, and production. Managerial agenda of advanced focal firms, which is underscored as the leading force in product manufacturing circularity, can and should take into account cooperative characteristics, issues, and other information and knowledge gained from interaction with their major suppliers located in emerging economies [59]. Therefore, the circular economy in GVCs emerges not from isolated governance improvements but from coordinated cross-border ecosystem management. As such, connectivity in indirect operations exists in the space between individual GVC actors and locales, which makes Scope 3 a crucial driving platform for sustainable integration [60].

Finally, such an extended approach to a framework of sustainable GVC based on circularity is also aligned with the major issue of power imbalance, which is often implicitly associated with interactions of focal firms from advanced economies and their suppliers from developing regions and emerging economies. By proposing that it is the cooperative efforts of both that need to be addressed for activation and maintenance of a truly sustainable GVC, the notion of a buying firm as an entirely dominant body of strictly regulatory and assessment responsibilities is eliminated with upstream and downstream actors depicted as essential co-creation partners with a direct input in sustainability practices across the entire CE of a product creation.

7. Conclusions

The present research highlights the interplay between focal firms and their suppliers in the context of advanced and emerging economy dynamics in underreported Scope 3 activity carbon footprint management. We argue that it is technology-driven cooperative efforts, which enforce factors such as traceability, transparency, and predictive and prescriptive capabilities within Scope 3 activities, that need to be addressed to ensure the activation and maintenance of a truly sustainable GVC. Moreover, the present paper extends upon the previously developed framework of sustainable value creation for a circular economy by re-establishing the integral position of actors involved in indirect relationships with the focal company’s processes in ensuring a more comprehensive approach to driving sustainability in the context of global value chains. This strategy is argued to promote the inclusion of the necessary regional context for the introduction of appropriate environmental practices and standards by the focal firm in its globally scattered supply chain.