Portfolio · ESG Analysis

Corporate Carbon Footprint Analysis

Where emissions actually sit and whether companies are disclosing them

This analysis examines the structure of corporate greenhouse gas emissions across four sectors automotive, apparel, food & beverage, and technology to assess the gap between where emissions are operationally reported and where they materially reside within value chains. A secondary focus is disclosure quality: whether companies with high Scope 3 dependence are reporting proportionally to their exposure.

Coverage: 13 listed companies across 4 sectors Scope: GHG Protocol Scopes 1, 2 and 3 Data period: Most recent disclosed reporting year Sources: Corporate sustainability reports · CDP disclosures
Purpose of this Analysis

Why We Conducted This

Investors and analysts increasingly rely on corporate carbon disclosures to assess transition risk and sustainability positioning. However, disclosure quality varies substantially and the emissions that carry the greatest financial and regulatory risk (Scope 3, value-chain) are also the least consistently reported.

This analysis was designed to test two related questions: first, does carbon exposure in practice sit primarily within operational boundaries (Scope 1+2) or across value chains (Scope 3)? Second, do companies with the highest indirect exposure disclose proportionally more detail or does disclosure depth remain disconnected from actual risk?

The 13-company, 4-sector sample was selected to compare structurally different carbon profiles: asset-heavy manufacturing (automotive, cement), supply-chain-intensive consumer goods (apparel, food), and operationally light but indirectly exposed technology businesses.

Key Learnings

What the Analysis Shows

1

Scope 3 dominates across all four sectors. In every sector analysed, value-chain emissions exceed operational emissions by a substantial margin. This is structural, not incidental it reflects where production, sourcing, and end-use emissions physically occur.

2

High Scope 3 exposure does not predict disclosure depth. Companies with near-total Scope 3 dependence vary widely in how many categories they disclose. This gap represents a material blind spot for investors relying on reported data for risk assessment.

3

ESG ratings are methodology-dependent, not comparable across providers. Divergence in ESG scores for the same company reflects fundamentally different frameworks. Ratings should be treated as directional inputs, not objective assessments.

Analysis 1 : Emissions Structure by Sector

Operational vs. Value-Chain Emissions: Where Carbon Actually Sits

Each sector carries a fundamentally different carbon structure. Automotive dominates in absolute Scope 3 scale, driven by vehicle use-phase emissions. Apparel and food & beverage are supply-chain driven the majority of emissions occur in raw material production and agricultural sourcing upstream of the company's own operations. Technology appears operationally light but retains a substantial indirect footprint through hardware manufacturing, data infrastructure, and employee-related emissions. The common thread: in all four sectors, managing Scope 1+2 alone is insufficient to address the companies' real carbon exposure.

Where emissions actually sit: operational vs value-chain footprint by sector
Analytical observation: The log-scale separation between Scope 1+2 and Scope 3 values confirms that operational emissions are, in most cases, an order of magnitude smaller than value-chain emissions. Companies whose transition strategies focus primarily on their own operations are addressing a fraction of their actual carbon footprint.
Analysis 2 : Disclosure Quality vs. Exposure

Scope 3 Dependence Does Not Drive Consistent Disclosure

This chart plots the relationship between a company's Scope 3 share of total emissions (a proxy for value-chain dependence) and the number of GHG Protocol Scope 3 categories it discloses. A well-functioning disclosure system would show a positive correlation , companies most exposed to Scope 3 risk should be disclosing more categories. The data shows this relationship is weak and inconsistent across sectors, indicating that disclosure decisions are driven by factors other than exposure magnitude (e.g. reporting burden, regulatory requirement, stakeholder pressure).

High Scope 3 exposure does not translate into consistent disclosure
Analytical observation: Companies with Scope 3 shares above 90% and fewer than 8 categories disclosed represent the clearest instances of disclosure-exposure misalignment. As CSRD and SEC climate disclosure requirements expand, this gap is likely to narrow but it currently represents a meaningful information risk for investors relying on disclosed data to assess transition exposure.
Investment Implications

How to Apply This Analysis

The divergence in ESG ratings across providers is not a data error, it reflects fundamentally different methodologies, scopes, and weighting systems. ESG scores should not be treated as objective or directly comparable indicators of sustainability performance. For investment purposes, this analysis points to three practical implications.

01
Ratings are directional, not absolute
A single ESG score does not capture a company's full sustainability profile. Differences between providers reflect what is being measured risk exposure, disclosure quality, or actual emissions impact rather than errors in the data.
02
Provider selection must match strategy
Risk-focused investors may find Sustainalytics more relevant; long-term positioning analysis may align better with MSCI or CDP frameworks. Selecting a provider without understanding its methodology introduces misalignment between score and intent.
03
Multi-source analysis reduces blind spots
Relying on a single ESG rating introduces structural blind spots, particularly around Scope 3 exposure where disclosure is incomplete. A combined view across providers and direct engagement with raw disclosure data offers a more balanced basis for decision-making.
Bottom line: ESG ratings should function as analytical inputs, not decision outputs. Investors who understand the methodological structure behind these scores and who cross-reference them against raw emissions data are better positioned to distinguish genuine sustainability leadership from disclosure-driven performance.
Methodology

Data & Approach


Data Sources

All emissions data was sourced from publicly available corporate sustainability reports, CDP climate questionnaire disclosures, and official annual filings. Where multiple reporting years were available, the most recent complete disclosure year was used. Data was not adjusted for acquisitions or divestments unless explicitly restated by the company.

Company Sample

Thirteen companies across four sectors were selected to provide structural diversity in carbon profiles: Automotive (BMW Group, Mercedes-Benz, Stellantis, Volkswagen Group); Apparel (Adidas, Puma, H&M Group); Food & Beverage (Nestlé, Unilever, Heineken); Technology (Siemens AG, SAP SE, ASML). Selection was based on data availability and sector representativeness, not ESG performance.

Scope Definitions

Emissions are classified under the GHG Protocol Corporate Standard. Scope 1 covers direct operational emissions; Scope 2 covers purchased energy (location-based or market-based as reported); Scope 3 covers value-chain emissions across up to 15 standard categories. Disclosure depth is measured by the number of Scope 3 categories for which data was provided, irrespective of whether the category was assessed as material.

Limitations

Where Scope 3 data was incomplete or not provided for specific categories, disclosure gaps were recorded rather than estimated. Sector-level aggregates represent unweighted averages of company-level data and should not be interpreted as market-representative benchmarks. ESG rating comparisons are illustrative of methodological divergence and do not constitute investment recommendations.