Leapmotor's Debut ESG Report Criticized for Insufficient Content

Technology Author: Yuehan Li Editor: chendi Nov 29, 2023 06:26 PM (GMT+8)

The automotive landscape is evolving with the rise of new contenders, among them Leapmotor (09863:HK), often dubbed the "Xiaomi of the automotive industry." Despite nearly selling 20,000 units in October and securing a close position behind Ideal and Xiaopeng (XPeng) among newcomers, Leapmotor's inaugural Environmental, Social, and Governance (ESG) report has triggered widespread concern and critique within the industry.

Compared to its counterparts, Leapmotor's ESG report spans only 63 pages, notably shorter than XPeng's 118 pages, NIO's 164 pages, and Ideal's 85 pages. The report's brevity raises red flags about its substance, lacking depth in professionalism, content comprehensiveness, and data disclosure — critical elements for assessing ESG reports.

The report falls short in presenting a comprehensive view of Leapmotor's environmental, social, and governance efforts. Instead, it predominantly emphasizes the technological aspects of its products, neglecting crucial areas like "Green Products and Technology," "Energy Consumption and Resource Management," "Carbon Emissions Management," and "Customer Service and Satisfaction," listed in the report's "Key Issues Matrix." Consequently, it fails to address the tangible environmental and social impacts of their technology. For instance, while mentioning a proprietary battery design enhancing range and performance, specifics about its implementation in vehicles or resulting carbon emissions reduction are absent.

Moreover, crucial metrics and data disclosures are lacking. Leapmotor fails to outline carbon reduction targets or commitments related to climate change, providing only partial data on Scope 1 and 2 emissions, which is insufficient.

Acknowledging resource limitations and financial constraints, Leapmotor's inability to comprehensively address all ESG issues is understandable. However, as the company seeks external investment and eyes international expansion, prioritizing pertinent ESG concerns impacting stakeholders is crucial. Leapmotor needs to integrate ESG responsibility into its business model, producing comprehensive and professional ESG reports to foster sustainable growth.

In summary, emerging automotive entities like Leapmotor must craft competent ESG reports to shape their corporate image, attract investments, and gain market acknowledgment. Refining report content to highlight specific ESG efforts and achievements is pivotal, elevating societal expectations and fostering sustainable development.

As Leapmotor extends its operations and intensifies global efforts, addressing consumer complaints diligently and adopting a responsible approach to ESG reporting becomes pivotal for competitiveness. This strategic maneuver will bolster corporate branding and drive long-term development.