Investigating comparability within corporate avoided emissions quantification

Amid the growing prevalence of avoided emissions reporting within corporate ESG disclosures and expanding capital flows toward climate solutions, the proliferation of methodologies for avoided emissions quantification allowing significant discretion raises concerns regarding their comparability. This study examines how methodological flexibility affects avoided emissions estimates, using the Tesla Model 3/Y electric vehicles as a case study. While existing literature highlights methodological variability, it has not quantified the range of potential outcomes arising from these differences. This study addresses that gap by demonstrating that both the application of distinct methodologies and variations within individual guidance frameworks yield highly divergent estimates, ranging from −10 million tons CO₂e to 230 million tons CO₂e of avoided emissions from 2024's production of Tesla Model 3/Y electric vehicles. These findings suggest that avoided emissions disclosures risk lacking comparability and usability, potentially facilitating greenwashing and undermining the effective allocation of capital toward climate solutions. Reflecting on the case study findings and process, this paper recommends the standardization of avoided emissions methodologies, with the development of a formalized disclosure nomenclature as an initial step. Further research is required to support such standardization efforts and to address outstanding methodological challenges.