Decarbonizing supply chains in emerging economies: a multilevel analysis of regulation, ESG, and digitalization

This study investigates the interplay between regulatory frameworks, environmental, social, and governance (ESG) adoption, and digital transformation in driving supply chain decarbonization (SCD) within emerging economies, focusing on Nigeria as a critical case. Employing a multilevel analytical framework, we integrate macro (regulatory policies), meso (corporate ESG integration), and micro (technological enablers) dimensions. A cross-sectional survey of 306 firms across manufacturing, logistics, and extractive industries provides empirical insights, supplemented by structural equation modeling (SEM), to validate hypothesized relationships. The study identifies three core constraints to decarbonization: (a) fragmented regulatory structures and inconsistent enforcement mechanisms, (b) ESG adoption impeded by financial constraints (FC) despite increasing institutional pressures (IP), and (c) limited digital transformation due to infrastructural deficits and technological gaps. Findings highlight the role of digital tools, blockchain, artificial intelligence (AI), and Internet of Things (IoT) in bridging governance inefficiencies and enhancing ESG compliance, though their adoption remains constrained by economic and institutional limitations. The research informs policymakers on the need for regulatory coherence, financial incentives, and infrastructure development to enable ESG-driven supply chain sustainability. Firms are advised to leverage digital transformation as a strategic enabler while navigating regulatory and FC. This study integrates regulatory, corporate, and technological dimensions to provide a novel empirical foundation for understanding decarbonization in emerging economies. It offers actionable insights for policy and practice.