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Tesla’s impact report reveals huge supply chain emissions

Tesla’s 2022 Impact Report reveals huge supply chain emissions, highlighting the importance of reporting indirect emissions.

Tesla’s 2022 Impact Report reveals its supply chain emissions were much higher than previously disclosed and account for most of the company’s total climate impact. The report stated that Tesla’s supply chain emissions for 2022 is equivalent to roughly 30.7 million tons of carbon dioxide.

Last year, Tesla had only reported its Scope 1 and 2 emissions, which amounted to around 2.5 million metric tons of carbon dioxide. However, this did not account for the emissions generated from its supply chain, Scope 3, which can make up a significant portion of a company’s overall carbon footprint. The disclosure highlights the importance of considering both direct and indirect emissions when assessing a company’s carbon footprint. 

The carbon footprint of a company is usually divided into three groups or “scopes.” Scope 1 includes direct emissions from a company’s operations, such as factories, offices, and vehicles. Scope 2 encompasses emissions from a company’s electricity use, heating, and cooling. Scope 3 includes all other indirect emissions, such as those from supply chains and the lifecycle of a company’s products. Tesla’s Scope 1 and 2 emissions for 2022 amounted to only 610,000 metric tons of CO2, a small fraction of its total emissions.

Tesla’s supply chain emissions accounted for most of the company’s total climate impact, with the goods and services Tesla procured from third-party vendors amounting to about 22.3 million tons of carbon emissions in 2022. 

The largest source of Tesla’s Scope 3 emissions comes from emissions related to battery emissions, which accounted for 27% of the total in 2022, followed by aluminium and steel emissions at 18% and 8%, respectively. The remaining 47% falls under the “all others” umbrella category. 

Majority of emissions in the battery supply chain are generated by the chemical processing of lithium, nickel and cobalt. Extraction, transportation and upgrading processes contribute the remaining smaller amounts.

It is important to note that Tesla has lagged behind other automakers in sharing details about its greenhouse gas emissions. Ford, for example, has garnered “A” grades for its climate change disclosures since 2019, while Tesla earned “F” grades from the CDP, a nonprofit that evaluates companies’ environmental reporting. However, Ford’s carbon footprint is much larger than Tesla’s, at over 337 million metric tons of CO2 in 2022.

Tesla’s 2022 Impact Report sheds light on the importance of accounting for a company’s entire carbon footprint, including its indirect emissions from its supply chain. As regulations surrounding emissions reporting continue to evolve, it is crucial for companies to take a comprehensive approach to environmental responsibility and sustainability.

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