MarketKfW: Companies must do more for climate

KfW: Companies must do more for climate

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State development bank KfW surveyed 11,000 companies about their investments in climate protection. Conclusion: Much is already being done, but still not enough.


Undoubtedly, 55 billion euros is a proud amount. Fritzi Köhler-Geib, chief economist at Kreditanstalt für Wiederaufbau, is almost moderate when he says, “A lot is already being done, but more needs to be done.”

If you look at the investment gap of German companies in terms of climate protection, this is a rather understatement. This was clearly demonstrated by the KfW survey of 11,000 companies of all sizes.

Only one in ten companies works for climate neutrality

In 2021, every eight euros of all investments by German companies went to energy transition projects. Still, a total of 55 billion euros is very little. To truly achieve climate neutrality in Germany by 2045, private companies alone will need to invest around 120 billion euros annually.

For orientation: there should be a total of 190 billion euros, of which around 50 billion should be carried by private households. So the real burden is actually on the companies. Companies invest most in climate-friendly mobility measures (47 percent), followed by improvements in the energy efficiency of their buildings through insulation or the installation of heat pumps (32 percent).

Measures to generate or store renewable energy ranked third (27 percent). According to KfW, there is a contradiction that needs to be resolved. “In the German economy, climate protection is considered a challenge for entrepreneurship,” says Fritzi Köhler-Geib. However, “only ten percent of all companies currently strive for climate neutrality in the future”.

Small companies have to catch up

First of all, many small companies that represent the overwhelming majority in Germany are being called upon to do more. According to Köhler-Geib, there must also be “awareness” that climate neutrality “concerns us all”. On average, large companies in Germany spent 251,000 euros on climate protection last year.

Small and micro companies are only 23,000 Euros. So there is a clear gap in the middle. But large companies also have completely different financing options. For example, you can issue corporate bonds.

Financing deficit of 60 billion euros per year

In addition, they have a completely different responsibility to customers or finance when it comes to climate protection. For shareholders or financiers, green transformation is now at the top of the list of priorities. A situation that will soon affect small companies, as Fritzi Köhler-Geib explains:

The more big companies and banks commit to their climate protection goals, the more these small companies will achieve.

Fritzi Köhler-Geib, KfW Chief Economist

However, the framework conditions for such investments must also be appropriate. Above all, it is important to identify economic incentives and have as little bureaucracy as possible when investing in climate protection. After all, climate neutrality means not only environmental responsibility for the German economy, but also a huge opportunity.

For Fritzi Köhler-Geib, Germany is “in a good starting position. It is “technologically exceptionally positioned” to take advantage of growing markets. A win-win situation: for the climate and the German economy. A financing gap needs to be closed as soon as possible.

Source: ZDF

Ben
Ben
I am Ben Stock, a highly experienced professional with over 7 years of experience in the news industry. I specialize in market section writing and have published numerous high-quality articles on various topics under my name. My passion for journalism has helped me to develop an in-depth understanding of the industry, enabling me to stay up-to-date on all the latest trends and developments.

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