German companies increasingly adopting science-based climate targets – report
Clean Energy Wire
A new report by the German CEO Alliance for Climate and Economy and sustainability consultancy Better Earth indicates that climate protection has a major impact on the strategic decisions of companies and is increasingly becoming a success indicator for management. An increasing number of companies are using climate science findings to guide their actions, while short-term market needs are becoming less important, the report found. There is still a lot of room for improvement when it comes to the concrete implementation of CO2 reduction plans, however. More than 50 companies were surveyed on their decarbonisation plans. Almost half of them have set a science-based climate target or are in the process of developing one. While public policy has set clear reduction goals, it has not provided businesses with an exact roadmap to reaching them, the report notes. “Technological progress facilitates climate action, but it is not the solution on its own.” At the same time, climate action has become a criterion for measuring the success of CEOs and represents a competitive opportunity, according to the surveyed companies. While companies have developed a clear position on climate action, translating it into action is seen as “their current biggest challenge”. The increasing orientation toward science made it tougher for companies to be included in sustainability funds without showing concrete results.
The surveyed businesses are increasingly orienting themselves towards science-based requirements. Nearly 50 percent have or are currently developing science-based targets (SBT). Value chains remain the biggest challenge, however. Complex supply chains and procurement portfolios, differing standards and incomplete information on purchased goods all pose major hurdles.