Module 2, material investment, compares the rate at which each company has been reducing its manufacturing emissions per vehicle produced over the past five years, by reference to a well below 2-degree emissions reduction pathway. While most automotive sector emissions occur when vehicles are driven, a notable amount of emissions are generated during production.
Automotive manufacturing emissions primarily come from combustion of fossil fuels for power and heat both on and offsite. This module therefore reflects the companies’ ‘material investments’ in manufacturing efficiency. It comprises indicator 2.1 and accounts for 0.4 out of the performance assessment score of 20.
Of the 30 keystone companies assessed this year, only four stronger performers in this module ranking have achieved past manufacturing emissions intensity reduction trends that fully align with their well below 2-degree decarbonisation pathways. These companies and their annual reduction rates (in kilograms CO2e per vehicle) are:
Tata – reduction rate of 231
BMW – reduction rate of 72
Daimler – reduction rate of 35
Mazda – reduction rate of 23
By contrast, the manufacturing intensity trends of Ford and Kia show annual increases of 16 and 4 kilograms per vehicle respectively. Both are assessed as fully unaligned and perform poorly in this module ranking. The majority of companies assessed show weak alignment on this indicator. This is unexpected given that emissions reductions often reflect other efficiencies in processes that companies are likely to be making, and which also bring carbon cost savings.
Several companies, especially those headquartered in China, could not be assessed for this module due to a lack of data. However, disclosure is improving with some Chinese headquartered companies beginning to report scope 1 and 2 emissions. For example, Geely has reported its scope 1 and 2 emissions since 2016.
In this assessment, the highest manufacturing emissions intensity figure across the sample is 2.42 tonnes CO2e per vehicle produced and the lowest 0.26 tonnes CO2e per vehicle produced. This wide range of intensities suggests that there is likely opportunity for many companies to reduce emissions from the production phase of their cars.