Corporate Carbon Disclosure Rates Plateau at 80%, with Only 60% Reporting Scope 3 Emissions

Clarity AI’s new study unveils stagnation in global emissions disclosure and shortcomings in Scope 3 data quality

New York – September 23, 2024 – On the occasion of New York Climate Week, Clarity AI, the leading global sustainability tech platform, announced the release of its latest study, Carbon Reporting Trends: Has Global Progress Stalled? The study highlights a plateau in global corporate greenhouse gas (GHG) emissions disclosure rates, with 80% of MSCI ACWI companies reporting Scope 1+2 emissions, yet only 60% disclosing at least some Scope 3 emissions. The whitepaper also reveals significant regional disparities and ongoing challenges with the quality of Scope 3 data.

“Despite substantial progress in emissions reporting over the past few years, our findings show a concerning stagnation in disclosure rates,” said Nico Fettes, Climate Research Director at Clarity AI. “With increasing disclosure requirements for financial institutions related to financed emissions, the demand for detailed and accurate corporate emissions data continues to rise. However, many companies are still falling short in providing the comprehensive information needed for effective climate risk analysis. This lack of transparency not only prevents investors and stakeholders from making informed decisions, but also affects the broader public’s ability to understand and respond to climate risks, ultimately impacting our collective efforts towards a more sustainable future.”

Only 60% of companies report any Scope 3 emissions

Almost 80% of companies in the MSCI ACWI index have disclosed their Scope 1+2 data, but only 60% report at least some of their Scope 3 emissions, highlighting a significant gap. This represents a slowdown in the rate of increase in Scope 3 reporting, with companies in Asian emerging markets disclosing Scope 3 data at a notably lower rate—just 41% compared to nearly 90% in Europe and Japan.

Scope 3 data quality increases by over 130%, but gaps remain

The quality of Scope 3 emissions data has increased by over 130% compared to 2019, as measured by Clarity AI internal reliability models. One of the main factors behind this improvement is the growing number of companies disclosing both more and relevant Scope 3 categories. Despite this progress, the overall quality of Scope 3 data remains below high standards, underscoring the need for more robust reporting practices.

U.S companies closing the gap on Scope 1+2 emissions disclosure

Companies in Europe and Japan lead in Scope 3 emissions disclosure, with nearly 90% reporting this data. In contrast, Asian emerging markets lag behind, with only 41% of companies disclosing any Scope 3 emissions. The overall growth in disclosure rates has recently plateaued across all regions.

In the U.S., however, notable progress has been made. Starting from a much lower baseline in 2019, U.S. companies have now achieved a 90% disclosure rate for Scope 1+2 emissions, nearly catching up to their European and Japanese peers. Nonetheless, the U.S. still mirrors the global trend when it comes to Scope 3 emissions, with only 60% of companies reporting at least some of their Scope 3 emissions. This highlights the ongoing challenge of comprehensive emissions reporting, even in regions where disclosure rates for Scope 1+2 have significantly improved.

For more information or to access the full study on Carbon Reporting Trends, please visit: https://clarity.ai/

About Clarity AI

Clarity AI is the leading sustainability tech company, leveraging advanced technology and AI to provide data-driven environmental and social insights to investors, corporates, governments, and consumers. AI has been at the core of Clarity AI’s offering from the start, supporting a fully flexible set of data solutions, insights, analytics capabilities, and tools used for portfolio management, corporate research and engagement, benchmarking, regulatory reporting, online banking, and e-commerce. Clarity AI was named a leader by independent research in The Forrester Wave: ESG Data & Analytics, Q3 2024.

Within the investment sector, Clarity AI serves a direct network of clients managing over $60 trillion in assets and includes firms like Invesco, Nordea, Lazard Asset Management, and Santander. Our strategic partnerships with financial institutions such as BlackRock, the London Stock Exchange Group (LSEG), BNP Paribas, Caceis, or SimCorp, allow thousands of users to access Clarity AI advanced data analytics capabilities through their usual investment platforms, ensuring a seamless workflow experience. Clarity AI has offices in North America, Europe, and the Middle East. For more information www.clarity.ai

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