ESG Reporting in the Automotive Industry: CSRD, Scope 3, and the EV Transition

The automotive industry faces a unique ESG reporting challenge: the overwhelming majority of its lifecycle carbon emissions — typically 75 to 90 percent — occur not in manufacturing plants or corporate offices, but in the use phase of the vehicles it produces. Under ESRS E1 and the GHG Protocol's Scope 3 Category 11 (use of sold products), automakers in scope for CSRD must disclose these use-phase emissions — a figure that, for a major OEM producing millions of vehicles annually, can run to hundreds of millions of tonnes of CO2 equivalent.

Scope 3 Emissions: The Dominant Reporting Challenge

For vehicle manufacturers, Scope 3 emissions are not a peripheral reporting item — they are the central disclosure. Category 11 (use of sold products) typically accounts for 80 to 90 percent of an automaker's total carbon footprint. Reporting this accurately requires fleet-level data on average fuel efficiency, annual vehicle kilometres travelled, and fuel type mix across the full product range. For OEMs with legacy combustion vehicle lines alongside growing EV portfolios, this calculation is complicated by the need to project how fleet composition will shift over the vehicle lifetime.

Supply Chain Due Diligence Under ESRS and CSDDD

Automotive supply chains are among the most complex in global manufacturing — a typical passenger vehicle contains components from thousands of suppliers across dozens of countries. Under ESRS S2 (Workers in the Value Chain) and ESRS E1, automotive companies must disclose both the social and environmental risks present in their supply chains. The EU Corporate Sustainability Due Diligence Directive (CSDDD) imposes additional obligations to identify, prevent, and remediate adverse human rights and environmental impacts in tier-one and, where relevant, deeper supply chain relationships. Cobalt sourcing for EV battery production and mica sourcing from high-risk geographies are two areas where automotive ESG reports face particularly intense scrutiny.

The EV Transition Plan Disclosure

ESRS E1 requires companies to disclose a climate transition plan — a credible, time-bound strategy for aligning business operations with 1.5°C pathways. For automotive companies, this means disclosing the pace and funding of the shift to battery electric vehicles, the decommissioning timeline for internal combustion engine production, the investment in charging infrastructure, and the assumptions underpinning fleet decarbonisation trajectories. Investors and analysts scrutinise these disclosures intensely, using them to assess whether OEMs' stated transition commitments are credible or aspirational.

Key ESG KPIs for Automotive Reporting

• Average fleet CO2 emissions (g/km) — regulated under EU fleet emissions standards (Regulation 2019/631)
• Scope 3 Category 11 absolute emissions (tCO2e) — required under ESRS E1
• Percentage of revenue from zero-emission vehicles — transition plan indicator
• Supplier ESG audit coverage (%) — ESRS S2 and CSDDD due diligence indicator
• Recycled material content in new vehicles (%) — ESRS E5 resource use
• Lost Time Injury Rate (LTIR) in manufacturing — ESRS S1 health and safety
• Gender representation at management level — ESRS S1 diversity indicator

Where Automotive Companies Struggle Most

The most consistent pain point in automotive ESG reporting is Scope 3 data quality — specifically, getting accurate activity data from thousands of independent suppliers for Categories 1 (purchased goods and services) and 11 (use of sold products). Many companies still rely on spend-based emissions factors for Category 1, which produces estimates with wide uncertainty ranges. Building supplier-specific data collection programmes requires dedicated procurement team engagement and, often, supplier capacity-building support. Companies that address this systematically reduce their reporting uncertainty and strengthen their credibility with both regulators and investors.