Mercedes-Benz

No leading practices were identified for this company.

Mercedes has a comprehensive low-carbon transition plan informed by climate scenario analysis that has considered the implications of a 1.5°C scenario. The company’s transition plan contains relevant short- and long-term actions, including expanding its battery manufacturing factories. Moreover, the company has implemented board-level oversight of climate change issues, and its board has expertise in sustainability-related topics, having a supervisory board member who has served many years as the Director of the University of Cambridge Institute for Sustainability Leadership. The company also includes metrics related to greenhouse gas (GHG) emissions reductions within its board’s long-term incentive plan.

Mercedes did not increase its low-carbon vehicle sales at the rate required by its 1.5°C pathway between 2019 and 2023. In 2019, its low-carbon vehicle sales accounted for 1% of total sales, which increased to 12% by 2023. It also plans to increase BEV sales to 50% by 2030. However, the company must continue significantly increasing this share, with zero-emissions vehicles accounting for 67% of its global vehicle sales by 2030 to remain aligned with its 1.5°C pathway.

Mercedes collaborates with local public authorities to design future climate-aligned policies and participates in pilot programmes to test such policies. The company is a significant partner in the implementation of several long-term, climate-related policies and partnerships such as the advancement of EV charging availability and integration of Zero Emission Vehicle standards. The company also has a policy to increase such collaboration in more of its operational jurisdictions and is taking concrete steps towards this.

Mercedes has not set sufficient intermediate targets. Setting regularly spaced intermediate targets will help the company incentivise near-term actions on its longer-term decarbonisation goals. Additionally, the company’s upstream and downstream scope 3 emissions targets could not be assessed as no data was found of the company’s base and reporting year emissions intensity. The company’s target to become net zero across scope 1, 2 and 3 emissions by 2050 could not be assessed as it is unclear if it plans to use offsets. Reducing emissions related to its operations and products should remain the company’s priority. Furthermore, the company should disclose the proportion of each target that will be met through direct action, rather than including offsets.

Mercedes has implemented board-level oversight and incentives for managing the low-carbon transition. The company has a comprehensive low-carbon transition plan backed by financial content and informed by climate scenario analysis that has considered the implications of a 1.5°C scenario. However, it does not disclose the carbon price used. Mercedes can improve its performance by including and disclosing a carbon price that aligns with the expectations set out in the International Energy Agency’s (IEA’s) Net Zero Emissions (NZE) Scenario.

In 2023, the low-carbon shares of its overall capital expenditure (CapEx) and research and development (R&D) investment were 24% and 36% respectively. Yet, only 12% of Mercedes’ total vehicle sales consisted of low-carbon vehicles in 2023 and its revenue from low-carbon activities was just 14%. Reducing emissions aligned with a 1.5°C pathway requires companies to continue increasing their sales of low-carbon vehicles and reducing ICE vehicle sales. Mercedes should step up its ambition to meet its 1.5°C pathway, which requires 67% of automobile sales in 2030 to consist of low-carbon vehicles.

Mercedes publicly demonstrates support for the Paris Agreement. However, the credibility of Mercedes’ statements on climate change is undermined by its continued membership and board roles in trade associations that have opposed climate policy. Mercedes is on the board of the European Automobile Manufacturers Association and the German Association of the Automotive Industry. Both have advocated against key EU climate policies, standards and targets. Mercedes can improve its credibility by rapidly ending its board and membership roles in trade associations with a negative stance on climate policy.

The company commits to engaging in social dialogue with workers and unions. It also discloses the categories of stakeholders it engages with on a just transition. Furthermore, the company demonstrates ongoing social dialogue and meaningful engagement with affected stakeholders.  However, no evidence was found of the company undertaking low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning. 

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s actions to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks.  The company discloses the actions it takes to provide reskilling and upskilling, as well as training and education opportunities for workers and affected stakeholders. For instance, it has qualification programmes and trains its employees on sustainability-related topics. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to reskill or upskill.  

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders.  No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers. 

The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. It also discloses a human rights due diligence process that includes the identification and assessment of salient human rights risks. Furthermore, it takes action to mitigate these risks in its own operations and its supply chain. However, it does not engage with affected stakeholders. The company has a grievance mechanism available to workers and external stakeholders. 

The company commits to respecting the health and safety of its workers and expects the same commitment from its business relationships. However, there is no evidence of the company having set a time-bound target for paying all workers a living wage or limiting required working hours to 48 hours per week. The company does not disclose the proportion of its direct workforce covered by collective bargaining agreements. It discloses some indicators of workforce diversity, including the gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. The company has a commitment towards gender equality and women’s empowerment. 

The company commits to protecting personal data but does not disclose a privacy statement regarding the use of personal data. Additionally, it does not disclose its global tax strategy or board accountability for the strategy. The company does not have a policy prohibiting bribery and corruption, but it includes anti-bribery and anti-corruption clauses in its contracts with business relationships. However, it does not describe the process to identify bribery and corruption risks and impacts in its operations. The company does not have a lobbying and political engagement policy and does not specify that it refrains from making political contributions.