From new green infrastructure projects to electric vehicle fleets and renewable power, companies see new business opportunities in developing low carbon products and services that amount to over €1.2 trillion.Steven Tebbe, Managing Director, CDP Europe
To avoid the worst impacts of climate change, global temperature rise must be limited to no more than 1.5°C, requiring global carbon emissions to decline to net-zero by the middle of the century. Accordingly, the EU has set a new target to reach net-zero emissions by 2050. Most of the low-carbon investment needed to achieve this goal must come from the private sector, so the extent to which European companies’ low-carbon investment plans are compatible with this objective is a critical question.
This report, jointly published by CDP and Oliver Wyman, aims to answer that question by examining European companies’ 2019 disclosures to CDP. For a set of 882 companies comprising over 70 percent of European market capitalization, the report analyses patterns in low-carbon investment by sector, the economics of emissions reduction initiatives and the critical question of whether corporate investment patterns are consistent with the net-zero goal.
Five key findings:
Number One: In 2019, 882 European companies responsible for over 2.3 GtCO2e of emissions reported €124 billion of new low-carbon investments to CDP.
Number Two: More investment in transformational breakthrough technologies is needed – particularly in the materials sector.
Number Three: Low-carbon capital investment must double to place the European corporate sector on track for net-zero emissions by 2050.
Number Four: The business case for low-carbon investment is clear: companies expect to avoid 2.4 GtCO2e while contributing over €40 billion to their bottom line.
Number Five: Closing the low-carbon investment gap requires action on multiple fronts.