Some 78 per cent multinational companies plan to remove by 2025 suppliers that endanger their carbon transition plan according to a study by Standard Chartered. According to Carbon Dated, which looks at the risks and opportunities for suppliers in emerging and fast-growing markets as large corporates transition to net zero, MNCs expect to exclude 35 per cent of their current suppliers as they transition away from carbon. The study also found that-- Supply chain emissions account for an average of 73 per cent of MNCs’ total emissions and More than two thirds (67 per cent) of MNCs say tackling supply chains emissions is the first step in their net-zero transition, rather than focusing on their own carbon output. It also said that Suppliers in 12 key emerging and fast-growing markets can share in USD1.6 trillion worth of business if they can remain part of MNC supply chains. According to the study the MNCs are increasing the pressure on their suppliers to become more sustainable, with companies based in emerging and fast-moving markets facing the biggest challenge. Some 64 per cent of MNCs believe emerging market suppliers will struggle more than developed market suppliers to meet their emission reduction targets, with a further 57 per cent prepared to replace emerging market suppliers with developed market suppliers to aid their transition. MNCs are concerned that emerging market suppliers are failing to keep pace with for two key reasons; insufficient knowledge and inadequate data. Some 56 per cent of MNCs believe that the lack of knowledge among emerging market suppliers (41 per cent for developed market suppliers) is a barrier to decarbonisation. Also read: Carbon dioxide levels hit 50% higher than preindustrial time With MNCs struggling with the quality of data, two-thirds are using secondary sources of data to plug the gap left by supplier emissions surveys. A further 46 per cent say that unreliable data from suppliers is a barrier to reducing emissions. The study also reveals that the current approach taken by MNCs could create a USD1.6 trillion opportunity for the net-zero club: those businesses reducing emissions in line with MNC net-zero plans. This represents a major opportunity for net-zero-focused suppliers across the 12 markets in this study, but also quantifies the potential losses to companies not embracing net-zero transition. Market                 Annual export revenue at risk China                  USD512.3bn India                   USD273.7bn Hong Kong           USD205.5bn Singapore            USD146.6bn South Korea         USD142.5bn The UAE              USD119.6bn Malaysia              USD65.3bn Nigeria                USD34.3bn South Africa        USD33.7bn Indonesia            USD25.6bn Bangladesh          USD18.7bn Kenya                 USD3.9bn MNCs are also willing to spend more on net-zero products and services. Some 45 per cent said they would pay a premium, of 7 per cent on average, for a product or service from a net-zero supplier. Also read: Carbon neutrality by 2050: The world's most urgent mission MNCs are exploring other ways to help their suppliers’ transition to net zero. Some 47 per cent are offering preferred supplier status – a sales advantage – to sustainable suppliers, and 30 per cent are offering preferential pricing. Some MNCs are going further, offering grants or loans to their suppliers to invest in reducing emissions (18 per cent) or data collection (13 per cent). Bill Winters, Group Chief Executive of Standard Chartered said: “It’s no surprise that as multinational companies transition to net zero, they will have to ask to their suppliers to evidence their own transitions. However, suppliers – especially those in emerging and fast-growing markets - cannot go it alone. “MNCs need to incentivise their suppliers to help them kick start their transition journey, but governments and the financial sector have a role to play too by creating the right infrastructure and offering the necessary funding. “Decarbonisation is vital for the survival of the planet, but a vibrant trade ecosystem is essential for maintaining an interconnected global economy. We must work together to ensure the supply chain is decarbonised in a way that delivers shared prosperity across the world.” Carbon Dated surveyed 400 sustainability and supply chain experts at MNCs across the globe.

The Group of Seven wealthy democracies agreed Saturday to support a global minimum corporate tax of at least 15% in order to deter multinational companies from avoiding taxes by stashing profits in low-rate countries. G-7 finance ministers meeting in London also endorsed proposals to make the world's biggest companies - including U.S.-based tech giants - pay taxes in countries where they have lots of sales but no physical headquarters. Britain’s Treasury chief Rishi Sunak, the meeting's host, said the deal would “reform the global tax system to make it fit for the global digital age and crucially to make sure that it’s fair, so that the right companies pay the right tax in the right places.” U.S. Treasury Secretary Janet Yellen, who attended the London meetings, said the agreement “provides tremendous momentum” towards reaching a global deal that “would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the U.S. and around the world.” France cheered Saturday’s agreement and claimed credit for acting as its catalyst. Also read: G-7 vows ‘equitable’ world vaccine access, but details scant “We made it! After 4 years of battle, a historic accord was reached with G7 member states,” French Finance Minister Bruno Le Maire tweeted. “France can be proud!” The meeting of finance ministers came ahead of an annual summit of G-7 leaders scheduled for June 11-13 in Cornwall, England. The U.K. is hosting both sets of meetings because it holds the group’s rotating presidency. The endorsement from the G-7 could help build momentum for a deal in wider talks among more than 140 countries being held in Paris as well as a Group of 20 finance ministers meeting in Venice in July. The G-7 has also been facing pressure to provide vaccines for low-income countries facing new surges of COVID-19 infections and to finance projects to combat climate change. A statement Saturday from the two-day finance ministers' meeting said only that they welcomed increased funding commitments by member countries and looked forward to more. International discussions on the tax issue gained momentum after U.S. President Joe Biden backed the idea of a global minimum of at least 15% — and possibly higher — on corporate profits. The tax proposals endorsed Saturday have two main parts. The first part lets countries tax a share of the profits earned by companies that have no physical presence but have substantial sales, for instance through selling digital advertising. Also read: G-7 major economies pledge cooperation to deal with virus The G-7 statement echoes a U.S. proposal to simply let countries tax part of the earnings of the largest and most profitable companies — digital or not — if they are doing business within their borders. It also supported awarding countries the right to tax 20% or more of profit exceeding a 10% profit margin. Part of the agreement is that countries such as France that have imposed digital services taxes would remove them in favor of the global agreement. The U.S. considers those unilateral digital taxes to be unfair trade measures that single out big U.S. tech companies such as Google, Amazon and Facebook. The other main part of the proposal is for countries to tax their home companies' overseas profits at a rate of at least 15%. That would deter the practice of using accounting schemes to shift profits to a few very low-tax countries. Nations have been grappling with the question of how to deter companies from legally avoiding paying taxes by resorting to tax havens — typically small countries that entice companies with low or zero taxes, even though the firms do little actual business there.