The biggest companies in Europe need to invest more than double the present levels into low-carbon projects if they are to meet the European Commission's (EC) 2050 goal of 'climate neutrality', a report has said.
European Commission President Ursula von der Leyen outlined the details of the European Green Deal last year. Photo: European Parliament / Creative Commons Licence: CC BY
The study by climate research provider CDP and consultancy Oliver Wyman covered 882 publicly-traded companies across a range of sectors and found that in 2019 they spent a collective total of €124-billion - around 12% of total investment.
In order to meet the EC's net-zero emissions by 2050 target, that figure needs to be 25%, according to CDP Europe's Managing Director Steven Tebbe.
The biggest areas for new investment were electric vehicles - with spend of around €43-billion, renewable energy at €16-billion, and energy grid infrastructure at €15-billion, the report said.
“Some European companies are making bold new low-carbon investments to roll out renewables, build greener infrastructure, buy electric vehicles and make manufacturing more energy-efficient,” said Tebbe.
“But there is a huge opportunity to do more, and we need to see more action across the board.”
He added that while doubling capital expenditure was "a big ask", Tebbe added that the costs of inaction would be much higher. The companies assessed in the study account for around 75% of the EU's total emissions and a similar amount of its stock market capitalisation.
“To help fill this investment gap, there’s a serious need for policymakers and investors to help companies finance the breakthrough technologies of the future,” he added.
CDP receives much of its funding from government grants and philanthropic organisations and works with companies to help manage and mitigate their climate risk.
European policymakers are aiming to reduce emissions targets to 50% to 55% below 1990 levels by 2030 and to achieve climate neutrality by 2050 as part of a €1-trillion European Green Deal.
Last week, in a bid to achieve its climate goal, the EU began a public consultation on the ways in which companies report the social and environmental impact of their activities, amid concerns that current rules on corporate sustainability disclosures are not strict enough and studies which show certain industries are perceived as whitewashing their emissions.
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