Germany’s biggest companies not reporting Scope 3

Inconsistent emissions data from DAX-40 companies poses problems for fund managers

Skyline of downtown Frankfurt in Germany


Natasha Turner

“Major differences” in the reporting of Scope 3 emissions from German companies will cause headaches for funds managers, a European data company has found.

A Scope ESG Analysis report found only half of companies in Germany’s benchmark DAX-40 stock market index have reported on more than four of 16 categories of indirect greenhouse gas (GHG) emissions.

It also found seven DAX-40 companies have not reported on Scope 3 GHG emissions at all and six have reported on no more than two categories. Less than 50% have reported on the category ‘use of sold products’ and only 26 provide information on the emissions in purchased goods and services.

“While most companies already comprehensively report their direct or Scope 1 emissions and the emissions from energy consumption (Scope 2), there are major differences in the reporting of indirect or Scope 3 emissions,” said Bernhard Bartels, managing director at Scope ESG Analysis.

Reporting issues

Fund managers are due to start ESG reporting, including indirect or Scope 3 GHG emissions, on their investment portfolios from next year when the EU’s Sustainable Finance Disclosure Regulation comes into force.

But there is problem of regulatory timing, the report said. Larger companies only start reporting in 2025 on their 2024 figures to comply with the EU’s Corporate Sustainability Reporting Directive. Therefore, the data appears inconsistent.

For example, banks and insurance companies use their borrowers’ Scope 3 emissions reporting as their own, while other industries have difficulty calculating emissions along their value chain.

“Inconsistent ESG reporting, by no means confined only to Germany’s larger companies, complicates the task for fund managers invested in these companies to make consistent decisions in putting together sustainability-linked portfolios,” Bartels added.

There is also an issue with targets. According to 2021 reported figures, only 50% of the DAX-listed companies defined an explicit quantifiable Scope 3 target. And Scope ESG Analysis found these targets differ substantially in size (10-40%), timing (2025-35), base year (2015-2018), and relevant business segments.

The report concluded: “Reduction objectives for indirect GHG emissions are often not available even if partially reported across companies and industries.”


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