To mark New York Climate Week, the global technology platform Clarity AI has presented its new study, “Carbon Reporting Trends: Has Global Progress Stalled?” The report shows that greenhouse gas (GHG) emissions disclosure by companies has reached a point of stagnation: 80% of companies in the MSCI ACWI index report their Scope 1 and 2 emissions, but only 60% disclose at least part of their Scope 3 emissions. The study also highlights significant regional disparities and ongoing challenges in the quality of Scope 3 data.
“Despite advancements in emissions disclosure in recent years, our results show a concerning stagnation,” said Nico Fettes, Director of Climate Research at Clarity AI. “With increasing disclosure requirements for financial institutions regarding financed emissions, the demand for detailed and accurate corporate emissions data continues to grow. However, many companies still do not provide the comprehensive information necessary for effective climate risk analysis. This lack of transparency not only hampers informed decision-making by investors and stakeholders but also limits the public’s ability to understand and respond to climate risks, thereby affecting efforts towards a more sustainable future.”
Only 60% of Companies Report Scope 3 Emissions
While nearly 80% of companies in the MSCI ACWI index have disclosed their Scope 1 and 2 data, only 60% report any of their Scope 3 emissions, leaving a significant gap. This result reflects a slowdown in the growth of Scope 3 disclosure, particularly in emerging Asian markets, where only 41% of companies report these emissions, compared to nearly 90% in Europe and Japan.
Scope 3 Data Quality Improves by 130%, but Gaps Persist
Since 2019, the quality of Scope 3 emissions data has improved by more than 130%, according to Clarity AI’s internal reliability models. This improvement is largely due to more companies reporting both a greater number of categories and more relevant Scope 3 categories. However, the overall quality of these data still falls short of what should be considered sufficiently high-quality disclosure, highlighting the need for more robust reporting practices.
U.S. Companies Are Closing the Gap in Scope 1 and 2 Disclosure
Companies in Europe and Japan lead in Scope 3 emissions disclosure, with nearly 90% reporting this data. In contrast, emerging markets in Asia are falling behind, with only 41% of companies disclosing Scope 3 emissions. However, the growth rate of disclosure has stabilized across all regions.
In the United States, significant progress has been made. Since 2019, when the disclosure rate was much lower, U.S. companies have reached a 90% disclosure rate for Scope 1 and 2 emissions, almost matching their European and Japanese counterparts. Nevertheless, like the global trend, only 60% of U.S. companies report any of their Scope 3 emissions, underscoring the ongoing challenge of achieving comprehensive emissions disclosure, even in regions where Scope 1 and 2 reporting has improved significantly.
For Amaya Uriarte
