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Fossil Free & Environment

The transition from ICE vehicles to EVs means that emissions drop overall but that the lifetime emissions profile of the car shifts. Embodied emissions can represent up to 90% of the total lifetime emissions from electric vehicles, making it the single most important area for emissions reductions for EVs. For automakers to meet their climate commitments and keep emissions within a 1.5 degree pathway, they must therefore set scope 3 science-based targets for emissions reductions that include upstream/purchased goods and services. 

As the Science-Based Target Initiative details, automakers who act now on Scope 3 targets stand to benefit. Greenhouse gas-intensive segments of a value chain are inherently more vulnerable to risk from increasing resource prices, such as increasing production costs of key suppliers, tightening efficiency standards for products, or taxation on carbon emissions. Setting targets to reduce Scope 3 emissions is therefore an essential component of strategic risk management and can help reduce cost. With investors, regulators and civil society increasingly turning their focus to scope 3 emissions, automakers who take proactive action now can stay ahead of the curve. 

Setting and monitoring Scope 3 emissions targets can also unlock new business opportunities for the auto industry. As the global economy decarbonizes, “the map of GHG emission hotspots created through scope 3 accounting can dramatically improve companies’ ability to forecast these changes and thus identify emerging business opportunities, as well as at-risk business segments, early.”

Automakers can use their outsized leverage in global supply chains to drive up standards for emissions reductions in the industries their supply chains depend on.

What can automakers do?

  • Set science-based scope three targets that include upstream/purchased goods, and that include a 2050 and an interim year target(s).
  • Require their suppliers to provide science-based targets to reduce their own GHGs, and disclose the current percentage of suppliers that are doing this, which will ensure automakers’ own targets have credibility.