KfW Climate Barometer 2024: KfW Research: Fewer companies are investing in climate protection

27.11.2024

German companies significantly increased their investments in climate protection last year. However, the number has decreased. This is shown by the latest KfW Climate Barometer.

Total expenditure increased by 12.1 percent to 85 billion euros. Adjusted for prices, this corresponds to an increase of 5.3 percent. Large companies accounted for the lion's share with EUR 50 billion, which corresponds to an increase of 19% compared to the previous year. Medium-sized companies, on the other hand, invested 35 billion euros, 10 percent less than in the previous year when adjusted for prices. These are the findings of the latest Climate Barometer published by the economic research department of the Kreditanstalt für Wiederaufbau (KfW).

The KfW Climate Barometer is based on a representative survey in which around 9,700 companies took part between February and June 2024. The survey was conducted by GfK GmbH on behalf of KfW Bankengruppe.

Another result of the annual analysis: even though the total amount invested has increased, the number of companies actively investing in climate protection measures has fallen sharply. Only 340,000 of the approximately 3.8 million companies in Germany made such investments in 2023. This corresponds to a decrease of 150,000 companies compared to the previous year. The proportion of companies investing thus fell to 9%, compared to 13% in 2022. The willingness to invest fell particularly sharply among SMEs. Nevertheless, the average investment amount in this segment rose by 38% to EUR 146,000.

Obstacles to investment

The KfW Climate Barometer identified several obstacles to climate protection investments. First and foremost is uncertainty about the economic viability of such measures. 47 percent of the companies surveyed cited this factor. Other obstacles include a lack of financial resources (37 percent) and long planning and approval processes (36 percent). These factors are a particular burden for medium-sized companies.

Climate protection measures focused primarily on climate-friendly mobility, such as electric vehicles and charging infrastructure. Other areas of investment included the use and storage of renewable energies and increasing energy efficiency in existing buildings.

Against this backdrop, KfW Research emphasizes that far greater efforts are needed to achieve the goal of climate neutrality by 2045. The corporate sector would have to invest around 120 billion euros annually. Currently, the investment gap is at least 35 billion euros, with additional funds required to make up for past shortfalls.

Despite the current challenges, around a quarter of the companies surveyed plan to increase their climate protection investments over the next three years. According to KfW Research, this could be a sign that the topic is becoming more important again.

Author: Davina Spohn, E&M powernews