German companies must double down on climate investments to move towards climate neutrality
Clean Energy Wire
Companies in Germany invested about 55 billion euros in climate action measures in 2021 but still have to double their financial efforts to get on track towards the country’s 2045 greenhouse gas neutrality target, a survey conducted by state-owned development bank KfW has found. One in four companies carried out climate investments last year, but only one in ten has a clear ambition to become “climate neutral,” the “first and so-far only representative” survey carried out among “all German companies” has found, KfW said. Total company investments stood at 433 billion euros in 2021, meaning one in eight euros invested went into climate measures. “That’s an impressive sum and a good start, but more needs to happen still,” Fritzi Köhler-Geib, economist at KfW, said. In order to achieve greenhouse gas neutrality in Germany by the middle of the century, investments of up to 5 trillion euros will be necessary, equalling 190 billion per year, with 120 billion coming from private businesses, she said. “Consequently, the level of ambition needs to double in the next years.” Most businesses (77%) already investing in climate measures expected their investments to remain stable in 2022, whereas 18 percent even expected to increase them this year. “The current energy crisis has two opposing effects on the investment climate,” Köhler-Geib explained. “On the one hand, high prices for fossil energy create incentives for switching to renewables and improving efficiency. On the other hand, the extreme uncertainty regarding economic prospects due to the energy crisis means that investment plans often are being put on hold or given up on entirely.”
Most investments went into climate-friendly mobility (47%), followed by energy efficiency in buildings and heat pumps (32%) and measures to generate or store renewable power (27%). More than half of the companies said they had made climate action part of their strategy. Most surveyed businesses said the biggest contribution needed by policymakers would be to simplify licensing procedures for new investments.