Decoupling Firm Growth From Carbon Emissions: A Supply Network Role Perspective

Abstract

To achieve meaningful progress in carbon neutrality, absolute carbon emissions must be reduced. One possible approach is to decouple firms' growth trajectories from their emissions. Adopting a supply network perspective, this study examines how firms in different network roles decouple their growth from carbon emissions across all scopes. Focusing on the aerospace and defense industry's supply network, we apply an ego-temporal exponential random graph model (ego-TERGM) to empirically infer four previously conceptualized firm roles—negotiator, orchestrator, executor, and compromiser—based on structural and nodal characteristics. The findings of our exploratory analysis reveal significant differences in decoupling performance: the firms in roles characterized by denser ego networks decouple more effectively, while those in roles characterized by central and monopolistic positions tend to perform worse. These differences reflect the influence of power dynamics and network dependencies on firms' decoupling abilities. Central firms must navigate complex demands, while those in denser network roles experience stronger normative pressures to conform to sustainable practices. Beyond these network effects, decoupling can be further supported by setting more ambitious emissions targets, adopting moderate growth strategies, and prioritizing environmental innovation.