A new study co-authored by scientists from Watershed, Stanford, the World Wildlife Fund, and CDP found corporate supply chain emissions have been significantly underestimated.
The study, published in Nature Communications, found that carbon footprints from over 400 companies’ supply chains missed about two billion tons of greenhouse gas emissions, roughly equivalent to the annual emissions of Russia or India.
The discrepancy arises from the use of the single-region emissions model USEEIO, which assumes that all of a business’ suppliers are located in the United States. Researchers compared corporate emissions measurements produced using USEEIO against those produced using Watershed’s global model, CEDA.
Nearly half of the missing emissions were attributed to suppliers in China, which relies heavily on coal. The biggest gaps emerged in energy-intensive manufacturing sectors such as steel and concrete, construction machinery, fabricated metals used for cars and infrastructure, and electronic components.
“Supply chains are global, so a model that assumes everything is made domestically is going to give us a wrong answer,” said Dr. Steve Davis, professor of Earth System Science at the Stanford Doerr School of Sustainability, lead author of the study, and chair of Watershed’s Science Advisory Board.
Corporations seeking to track and reduce emissions in their supply chains have the potential to make a meaningful difference in global carbon pollution, Davis said. Use of models that ignore foreign suppliers can blind companies to emissions hotspots and opportunities to cut carbon.
“When available tools neglect international sources of emissions, companies’ sustainability decisions suffer,” said Michael Steffen, Watershed’s head of climate analytics and a co-author of the study. “But we know the fix: use data and models that reflect the differences in manufacturing processes around the world. We’re committed to building and sharing such global models with everyone so we can all make progress together.”
In August 2025, Watershed, Stanford, and ERG launched Cornerstone, a sustainability data initiative, to release a global data model freely available and easy to use. This model will merge USEEIO and CEDA, the world’s two most widely-used models for scope 3 carbon accounting. Cornerstone aims to release the merged model in late 2026, and to account for emissions from land-use changes and deforestation in later research and iterations. The group released updated open source versions of both datasets in October 2025.
You can access the full study here. Additional study co-authors include Andrew Dumit, Dr. Mo Li, and Yohanna Maldonado of Watershed; Martha Stevenson of the World Wildlife Fund; Tatiana Boldyreva of CDP; and Dr. Sangwon Suh, who is affiliated with both Watershed and the University of California, Santa Barbara.
