Assessing eco-efficiency in global supply chains: an extended DEA approach with dimensionality-adjusted decomposition

Assessing eco-efficiency is important for guiding sustainable production. The rapid development of global supply chains (GSCs) has profoundly changed both the productive and environmental performances of production entities worldwide. With the emerging green supply chain rules and environmental, social, and governance (ESG) criteria, assessing entities’ eco-efficiency in GSCs becomes increasingly relevant. To this end, this paper develops an extended eco-efficiency measurement approach using the data envelopment analysis (DEA) technique within the multi-region input-output (MRIO) framework, where the intermediate inputs sourced along GSCs and embodied emissions are included to evaluate individual entities’ eco-efficiency in the GSC context. A dimensionality-adjusted decomposition method is developed to further quantify the productive and environmental impacts of GSCs on eco-efficiency, adapted for both static and dynamic contexts. The proposed approach is applied to study eco-efficiency in GSCs for 22 manufacturing sectors across 49 major economies during 2000–2019. It is found that the industrialized economies take the lead in eco-efficient manufacturing in GSCs and are also improving to reduce negative GSC impacts. Improvements in GSC-related performance have become an increasingly important source of global eco-efficiency gains, particularly for labor- and capital-intensive manufacturing. The results inform targeted measures to promote eco-efficient manufacturing in GSCs.