We show that suppliers adopt climate action policies in line with their customers’ emission-reduction commitments. These spillovers reflect bargaining dynamics rather than supply chain reconfiguration. Suppliers’ policy adoption does not translate into real abatement, capital investment, or green innovation unless the supplier has high gross margins. Our results suggest that economic frictions create the gap between announced climate ambitions and realized outcomes. Strengthening commercial terms — through better pricing, or shared investment frameworks — can reduce this gap.