Europe's top firms must double low-carbon investment: study

This post was originally published on this site

By Simon Jessop

LONDON (Reuters) – Europe’s top companies need to more than double their current level of spending on low-carbon projects to meet the European Commission’s flagship goal of ‘climate neutrality’ by 2050, according to a report released on Tuesday.

The major study of 882 publicly-traded companies across multiple sectors by climate research provider CDP and consultancy Oliver Wyman showed they spent 124 billion euros ($134.1 billion) on capital investment and research and development in 2019.

That amounted to around 12% of total investment. To be on track to meet the goal of net-zero emissions by 2050 however, that figure needs to jump to 25%, said CDP Europe’s Managing Director Steven Tebbe.

The biggest areas for new investment were electric vehicle technologies, with spend of some 43 billion euros, renewable energy, at 16 billion euros, and energy grid infrastructure, at 15 billion euros, 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,” Tebbe said.

“But there is a huge opportunity to do more, and we need to see more action across the board.”

While doubling capex spend was “a big ask”, Tebbe said the costs of inaction were higher still. The companies assessed account for around three-quarters of the EU’s total emissions and the same 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, which works with companies and investors to help them manage their climate risk, is largely backed by funding from philanthropic and government grants.

European policymakers are aiming to reduce emissions targets to 50%-55% below 1990 levels by 2030 and to achieve climate neutrality by 2050 as part of a 1 trillion euro ($1.1 trillion) European Green Deal. [nL8N29J2QN]

In a bid to achieve its goal, the EU last week opened a public consultation on how companies report the social and environmental impact of their activities, amid concern the current rules on corporate sustainability disclosures are not tough enough.

($1 = 0.9246 euros)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add Comment