Decarbonizing Supply Chains in Emerging Economies: A Multilevel Analysis of Regulation, ESG, and Digitalization

As global efforts to combat climate change intensify, the decarbonization of supply chains has become a strategic imperative; yet, little is known about how this transition unfolds in emerging economies. This study examines the intricate relationship between regulation, environmental, social, and governance (ESG) practices, and digitization in driving supply chain decarbonization within Nigeria’s carbon-intensive sectors. Drawing on a multilevel analytical lens, we developed and empirically tested a structural equation model using survey data from 306 supply chain professionals across manufacturing, construction, energy, and logistics industries. Our findings reveal that regulatory stringency alone is insufficient in weak institutional environments; regulatory enforcement, rather than the formal existence of regulations, is the true catalyst for sustainable transitions. ESG-driven strategies exhibit strong mediating effects but are significantly constrained by firm-level challenges, including costs, technical expertise, and infrastructure limitations. Notably, digital innovations, particularly blockchain, AI, and IoT, emerge as critical enablers of carbon transparency and traceability, helping offset some of the institutional voids that characterize emerging economies. This study presents a rare, data-driven perspective on supply chain decarbonization in the Global South, making a significant contribution to sustainability theory and managerial practice. It provides actionable insights for policymakers, sustainability officers, and technology innovators seeking to align economic development with climate resilience in rapidly industrializing regions. JEL Classification Q54, Q56, M14, O13, O55