By Lara AlHassanieh | Staff Writer
Description: This article delves deeper into Tesla’s climate action goals and how one new disclosure in their 2022 environmental impact report raised several eyebrows on business transparency regarding what should be legally disclosed to customers and investors worldwide.
“Accelerating the World’s Transition to Sustainable Energy” is not only the slogan of Tesla, but it is also one of the first things that come to mind when buying an electric vehicle. With over 100,000 employees, Tesla prides itself in solving the world’s biggest problems and in avoiding 8.4 million metric tons of CO2 emissions in 2021. Although electric cars are considered to be more eco-friendly since they have 4% more battery-efficiency of a gasoline car, many questions were raised after Tesla published its environmental impact report in 2022, as indirect emissions appeared to be its main source of carbon emissions (also known as Scope 3 emissions).
To start, an understanding of sustainability should be established. Over the years, the word has been used often but rarely was the definition made clear. Currently, environmental sustainability is defined as the ability to maintain and conserve Earth’s natural environment in support of the wellbeing of current and future generations. Moreover, the term zero-emissions refers to no greenhouse gases (GHGs) released into the atmosphere while net zero emissions is the goal of achieving a balance between GHGs produced and GHG emissions released into the atmosphere. Thus, when Tesla cars are referred to as zero emission vehicles, it limits the considerations to the emissions of the vehicle itself, which are only a fraction of the direct emissions, and this has the potential to skew the public’s perception.
The beginning of Tesla’s 2022 environmental report highlighted the path to 100% sustainability by 2050, when three major areas need to be increased. Among which were the need for eleven times the electric vehicle production, can this be a truly sustainable route? And is the future truly electric? According to the report, each Tesla vehicle avoids 55 tons of CO2 emissions over its lifetime, assuming the internal combustion engine (ICE) vehicle maintains its fuel efficiency throughout its life and no improvement in grid emissions over time.
Delving deeper into the Scopes of sustainability as per Tesla’s definition, Scope 1 GHG Emissions are direct emissions from stationary and mobile combustion and process emissions. Scope 2 GHG emissions are produced from purchased electricity and heat, while Scope 3 is the indirect emissions occurring in the value chain of the reporting company, including upstream and downstream emissions. Tesla’s Scope 1 and Scope 2 emissions showed 202,000 and 408,000 tons of CO2 emissions, showing 29% reduction in manufacturing per vehicle. However, the major concern lies in the Scope 3 emissions, that showed around 30.1 million tons of CO2 emissions in 2022 alone.
Though companies tend to avoid disclosing Scope 3 emissions to show a low carbon footprint, it is perplexing when it comes to such a stark rise in emissions once it isn’t opted out like it was in 2021. The total CO2 emissions of Tesla amount to approximately 30.7 million tons which is about the same emissions as Angola, an African country with about 30.4 million people! This can be attributed to the emissions resulting from the extraction of the components of the battery such as lithium, cobalt, nickel, and graphite which is projected to increase 26-times, 6-times, 12-times, and 9-times respectively between 2021 and 2050. This creates a new set of challenges in terms of meeting these demands, added pressures of monopolization, and an inconsistent supply of these raw materials.
Revealing Scope 3 emissions is not legally required, leaving investors and customers equally unaware of the true environmental impact of the corporation. While Scope 3 emissions of Tesla are considered Scope 1 and 2 emissions of the other companies it’s in collaboration with, it is important to reflect on how not disclosing this valuable number can affect successful corporate climate action. Thus, making Scope 3 emissions an important indicator of readiness of businesses to adapt to a low-carbon economy in light of net-zero goals of countries such as the UK.
And as we begin embracing the 100% sustainability goal by 2050, it becomes even more imperative for companies like Tesla to not only focus on zero emissions of the vehicle when it is being driven, but also on the total emissions being produced in the process. Thus, redefining the benchmarks for environmental transparency. In light of global climate action, Scope 3 emissions should no longer be voluntarily disclosed, but should be used as a vital metric guiding the business readiness to navigate a low-carbon economy. Governments, investors, and consumers must all advocate for greater accountability and disclosure standards, ensuring that our pursuit of sustainable solutions aligns with a holistic understanding of environmental impact.
Links:
https://www.tesla.com/about
https://www.kia.com/lb/discover-kia/ask/are-electric-cars-better-for-the-environment.html#:~:text=Numerous%20research%20have%20shown%20that,that%20of%20a%20gasoline%20car.
https://www.tesla.com/ns_videos/2022-tesla-impact-report.pdf
https://www.microsoft.com/en-us/sustainability/learn/environmental-sustainability#:~:text=Environmental%20sustainability%20is%20the%20ability,of%20current%20and%20future%20generations.
https://www.nationalacademies.org/based-on-science/is-it-possible-to-achieve-net-zero-emissions#:~:text=Achieving%20zero%20emissions%20means%20releasing,oxide%20or%20other%20greenhouse%20gases.
https://www.tesla.com/en_gb/support/incentives
“https://www.climatecouncil.org.au/resources/what-does-net-zero-emissions-mean/”
https://www.sciencedirect.com/science/article/pii/S1364032123010341
“https://hsfnotes.com/esg/2023/10/24/uk-government-launches-call-for-evidence-on-scope-3-emissions-reporting/”