Price models as the missing link between sustainable business models and Scope 3 decarbonisation: Evidence from timber transportation

Abstract

Scope 3 decarbonisation requires more than corporate sustainability ambitions, reporting systems, or cleaner technologies. It also depends on the contractual and economic mechanisms through which supply-chain activities are governed. This paper examines price models as such mechanisms and investigates whether, and how, corporate Scope 3 ambitions are translated into the purchasing and contracting of timber transportation in the Swedish forest industry. Drawing on the Price Model Equaliser, the study analyses how the dominant price model structures value sharing, incentives, risks, and responsibilities between forest companies and external hauliers. Empirical data were collected through 39 semi-structured and in-depth interviews with 26 interviewees, complemented by archival material, annual reports, and participation in industry conferences. The findings reveal a clear disconnect: large forest companies articulate Scope 3 ambitions in public sustainability communication, but these ambitions are largely absent from the standardised price model used to purchase timber transportation. The current model rewards tonnes, distance, and short-term flexibility, while reinforcing cost pressure rather than incentivising lower emissions. The paper contributes to cleaner production research by showing that Scope 3 decarbonisation depends on price models that make lower-emission practices economically actionable. It contributes to sustainable supply-chain governance by conceptualising price models as micro-level contractual governance mechanisms, and to sustainable business model research by specifying the price model as a missing link between sustainability-oriented business model claims and the concrete contractual arrangements that shape behaviour in activity systems.