ESG Disclosure: Gaps In DAX-40 GHG Reporting Show Pitfalls F...| MENAFN.COM

Wednesday, 05 October 2022 10:02 GMT

ESG Disclosure: Gaps In DAX-40 GHG Reporting Show Pitfalls For Investors Ahead Of EU's SFDR


(MENAFN- ValueWalk)

Only half of companies in Germany's benchmark DAX-40 stock market index have reported on more than four of 16 categories for indirect greenhouse gas emissions, presenting fund managers with a headache as new EU environmental regulations come into force.

Fund managers are due to start ESG reporting, including indirect or so-called scope-3 GHG emissions, on their investment portfolios from next year when the EU's Sustainable Finance Disclosure Regulation (SFDR) comes into force.

Get Our Activist Investing Case Study!

Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below!

Q2 2022 hedge fund letters, conferences and more

July Hedge Fund Performance And Data From PivotalPath

PivotalPath has released their monthly report, the Pivotal Point Of . . . SORRY! This content is exclusively for paying members. SIGN UP HERE If you are subscribed and having an account error please clear cache and cookies if that does not work email or click Chat. Username or Email Password Remember me Lost your password?

Find A Qualified Financial Advisor

Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes . Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now .

But there is problem of regulatory timing . Larger companies themselves start reporting only in 2025 on their 2024 figures to comply with the EU's Corporate Sustainability Reporting Directive (CSRD). Until that happens, DAX-40 disclosure shows how uneven the available data are.

“The pressure on companies to report their CO2 emissions is steadily increasing - both through regulation and from investors,” says Bernhard Bartels, managing director at Scope ESG Analysis.

“While most companies already comprehensively report their direct or scope-1 emissions and the emissions from energy consumption (scope-2), there are major differences in the reporting of indirect or scope-3 emissions,” Bartels says.

“Inconsistent ESG reporting, by no means confined only to Germany's larger companies, complicates the task for fund managers invested in these companies to make consistent decisions in putting together sustainability-linked portfolios,” he says.

Gaps In DAX-40 GHG Reporting

Seven DAX-40 companies have not reported on scope-3 GHG emissions at all. Six have reported on no more than two categories. Less than 50% have reported on the most relevant category“use of sold products” and only 26 provide information on the emissions in“purchased goods and services.” In addition, companies use different methodologies to account for their indirect emissions.

“The results indicate that the complexity of capturing scope-3 emissions varies greatly between industries,” says Bartels.

“Take banks and insurance companies which rely on the scope-3 emissions of their borrowers to report their own scope-3 emissions. Other sectors face the problem of complex and sometimes unstable supply chains that make it difficult to calculate emissions all along the value chain, with the textile industry a good example,” he says.

About Scope Group

 

With more than 250 employees operating from offices in Berlin, Frankfurt, Hamburg, London, Madrid, Milan, Oslo and Paris, Scope Group is the leading European provider of independent credit ratings, ESG and fund analysis. Based on forward-looking and innovative methodologies, Scope offers a European perspective that contributes to greater diversity of opinion for institutional investors worldwide. More on

Updated on Aug 15, 2022, 2:37 pm

MENAFN15082022005205011743ID1104700807


Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.