Study finds inconsistency in Scope 3 reporting by German companies

A study by ESG-focused ratings agency Scope, has found that Scope 3 reporting is inconsistent across a sample of large, publicly listed firms in Germany. According to the study, there is significant variation in the degree and content of indirect emissions reporting. For example, seven firms in the DAX-40 (German stock market index) do not report Scope 3 data and only 50% have set a Scope 3 target. Among these targets, there is variation in timing, scale and base years. A likely reason for this inconsistency is that Scope 3 is challenging to measure. The study finds that: “The impact of Scope 3 emissions on ratings is limited because most rating providers process the information provided by corporates without further analyst input. “ It suggests that corporates rarely report on emissions related to purchased inputs or from the use of sold products because it is “difficult to account for emissions out of their direct control”.