Carmakers’ global emissions 50% higher than reported

(Transport and Environment, 28 Sep 2022) Car manufacturers are misleading investors by significantly underestimating the total distance travelled and fuel consumption of cars, as mandatory Scope 3 emissions reporting represent a ‘ticking carbon bomb’ for asset managers.

Carmakers’ global emissions are on average 50% higher than what they report with Hyundai-Kia and BMW underreporting emissions by as much as 115% and 80% respectively, a new Transport & Environment (T&E) report shows. With obligatory scope 3 (lifetime) emissions disclosure set to be introduced in 2023, asset managers with exposure to carbon intensive carmakers face a ‘ticking carbon bomb’, says T&E. 

In 2023, the EU will introduce a requirement that financial institutions disclose their scope 3 emissions (indirect emissions)[1]. The new requirement will hit asset managers with exposure to carmakers hard. Unlike manufacturers of furniture or mobile phones, the vast majority (98%) of a car company’s emissions come under scope 3 – primarily the use of the cars [2].

But, as T&E’s analysis shows, carmakers’ already high scope 3 emissions are likely far larger than officially reported. 

Luca Bonaccorsi, director of sustainable finance at T&E, said: “For green investing to be effective, we need accurate data. Carmakers are trying to pull the wool over investors eyes by underreporting the lifetime emissions of their cars. This makes a mockery of carmakers’ green claims.”

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Transport and Environment, 28 Sep 2022: Carmakers’ global emissions 50% higher than reported