Automakers almost as carbon-heavy per euro as oil companies – NGO

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BERLIN – The carbon emissions of a car over its lifetime are so high that investing in car manufacturers finances almost as much carbon per euro as investing in an oil company, according to a study by the environmental NGO Transport & Environment released Wednesday.

A million euros invested in the oil giants Shell, BP and Exxon Mobil finance around 5,000 tonnes of carbon dioxide, while the same amount finances an average of 4,500 tonnes in the automotive sector, according to calculations by the NGO based on the 2020 data.

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The researchers used data provided by the world’s nine largest automakers on the average tonnes of carbon emitted by their vehicles over their lifetime, as well as the size and composition of their fleets, compared to their market capitalization.

The findings have important ramifications for financial institutions across the European Union, which will soon have to disclose lifetime emissions – known as Scope 3 – of their investments under new EU rules that will come in in force in 2023.

So far, financial institutions are only required to disclose the so-called scope 1 and 2 emissions of their investments, with reference to those generated in the production process.

But for cars, 98% of emissions are generated over the lifetime of the product from the fuel used to power the vehicle, as shown by automakers’ own calculations available in sustainability reports.

Adding Scope 3 to the mix will make auto stocks much dirtier at a time when investors are under increasing pressure to prove the environmental credibility of their investments, the researchers warn. (Report by Victoria Waldersee edited by Mark Potter)