Evaluating the Impact of Scope 3 Decarbonization Mandates on Upstream Supplier Selection and Green Procurement Practices in the Oil and Gas Sector of Developing Economies

• Abi cit

  Lautech

  Author

The global energy transition has placed unprecedented pressure on oil and gas operators to decarbonize not only their direct operations but also their complex value chains, with Scope 3 emissions—representing over 90% of total sector emissions—emerging as the critical compliance frontier. This study investigates how mandatory Scope 3 decarbonization mandates reshape upstream supplier selection and green procurement practices in developing economies, where institutional capacity limitations, data infrastructure gaps, and competing developmental priorities create unique implementation challenges. Using a mixed-methods research design combining Analytic Hierarchy Process (AHP) and TOPSIS multi-criteria decision analysis with qualitative case study evidence from Nigeria, Indonesia, and Colombia, the research evaluates 187 supplier selection decisions across 24 procurement categories. The findings reveal that environmental criteria now account for 44% of supplier evaluation weight, with environmental management systems (15.1%) and occupational health and safety (14.4%) emerging as the dominant sub-criteria. The integrated AHP-TOPSIS framework achieved an 89.4% predictive accuracy in identifying compliant suppliers, significantly outperforming traditional cost-centric approaches (62.3%). The study concludes that Scope 3 mandates are fundamentally restructuring supplier markets, creating bifurcation between early-mover suppliers capable of meeting decarbonization requirements and laggards facing market exclusion. The validated multi-criteria framework offers a replicable procurement decision-support tool for oil and gas operators navigating the transition to low-carbon value chains in developing economy contexts.

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