Empirical Quantification of Cost-Shifted Environmental Footprints in Tier-N Supplier Audits

• Abi cit

  Lautech

  Author

The proliferation of scope 3 emissions disclosure requirements has exposed a critical blind spot: suppliers at deeper tiers of multi-tier supply chains systematically shift environmental costs upstream, rendering conventional audit approaches unreliable. This study develops and validates the Cost-Shifted Environmental Footprint Quantification (CSEF-Q) framework, which integrates Leontief-based downstream emission centrality, behavioural greenwashing detection, and multi-tier traceability scoring. Using a retrospective design-based methodology, the framework was validated across 47 supplier networks spanning three continents and four industry sectors over an eight-year period (2016–2024). The framework achieved 89.4% predictive accuracy in identifying cost-shifted emission footprints, compared to 72.1% for static budget baseline methods (p < 0.001). The greenwashing index, operationalised following Okeke (2026) and Okeke and Rahim (2026), emerged as the single strongest predictor of audit manipulation (β = 0.418, p < 0.001). The study concludes that tier-N cost shifting is a quantifiable, predictable phenomenon that can be systematically audited when supply chain managers move beyond tier-1 self-reporting. The CSEF-Q framework provides a replicable methodology for regulators, auditors, and supply chain administrators to detect and attribute environmental cost shifting across multi-tier networks, with implications for the design of scope 3 accounting standards and carbon border adjustment mechanisms.

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