UK lags behind in €124bn European low-carbon investment table
British companies are lagging far behind their European neighbours in low-carbon investment after contributing only 3% of the continent’s €124bn (£104.2bn) green spending last year.
A report has revealed that German-listed companies invested 11 times more in low-carbon investments such as electric vehicles, renewable energy and smart energy grids than UK firms.
London-listed companies spent €4bn on green research and technologies compared with €44.4bn from German groups, including the carmaker Volkswagen, which invested more than a third of Europe’s total low-carbon spending in 2019.
The report, from the climate disclosure organisation CDP, said Germany, Spain and Italy topped the company league table for low-carbon investment last year while the UK finished sixth, below France and Denmark.
The report, which was co-authored by the global management consulting firm Oliver Wyman, reflected well on countries that are home to major manufacturers and utilities that have made heavy investments in electric vehicles and renewable energy projects in the last year.
By contrast, UK companies did not fare as well in the investment rankings because much of the country’s green infrastructure spending is outsourced to foreign companies, including Spain’s Iberdrola, the owner of Scottish Power, and the Danish wind power giant Ørsted.
The report warned that despite the €124bn investment in green solutions across the continent, low-carbon spending will need to double if Europe hopes to meet its climate targets.
On average, companies included in the report dedicated about 12% of their annual spending to low-carbon technologies but this will need to rise to 25% to help create a carbon-neutral Europe.
UK and EU leaders have agreed to be climate neutral, or “net zero”, by 2050in a bid to keep global temperatures from climbing to levels that could lead to catastrophic climate chaos.
Steven Tebbe, the managing director of CDP in Europe, said achieving this goal means that Europe’s economy needs to cut its emissions at the rate of nearly 8%, which requires “a fundamental transformation of our economic business model”.
He said: “The investment decisions taken by European companies and their owners will make or break whether we are successful – and they need to double down.”
The report found that almost 900 listed European companies invested a total of €59bn in new low-carbon capital investments and €65bn in research and development last year.
The biggest areas of new investment were in research and development of electric vehicle technologies, which reached €43bn across Europe, and capital investment in renewable energy, which reached €16bn. Investment in energy grid infrastructure and smart energy technology climbed to €15bn and €8bn respectively.
“Across many types of investment, the business case for transitioning businesses on to a low-carbon pathway is clear and the opportunities vast,” Tebbe said.
The CDP estimates that the potential value of Europe’s new low-carbon business opportunities could reach €1.22tn – more than six times the €192bn of green investment required to realise this financial benefit.
“But overall current investment levels are still short of putting European firms on track for net zero emissions,” he said.
“For industries where decarbonisation is more challenging, there is a serious need for financial markets and policymakers to create better conditions for low-carbon investment and deliver stronger incentives to drive investment into breakthrough technologies, where capital expenditure is often high and returns long-term.”
We’ve got an announcement…
… on our progress as an organisation. In service of the escalating climate emergency, we have made an important decision – to renounce fossil fuel advertising, becoming the first major global news organisation to institute an outright ban on taking money from companies that extract fossil fuels.
In October we outlined our pledge: that the Guardian will give global heating, wildlife extinction and pollution the urgent attention and prominence they demand. This resonated with so many readers around the world. We promise to update you on the steps we take to hold ourselves accountable at this defining point in our lifetimes. With climate misinformation rife, and never more dangerous than now, the Guardian’s accurate, authoritative reporting is vital – and we will not stay quiet.
We chose a different approach: to keep Guardian journalism open for all. We don’t have a paywall because we believe everyone deserves access to factual information, regardless of where they live or what they can afford to pay.
Our editorial independence means we are free to investigate and challenge inaction by those in power. We will inform our readers about threats to the environment based on scientific facts, not driven by commercial or political interests. And we have made several important changes to our style guide to ensure the language we use accurately reflects the environmental emergency.
The Guardian believes that the problems we face on the climate crisis are systemic and that fundamental societal change is needed. We will keep reporting on the efforts of individuals and communities around the world who are fearlessly taking a stand for future generations and the preservation of human life on earth. We want their stories to inspire hope.
We hope you will consider supporting us today. We need your support to keep delivering quality journalism that’s open and independent. Every reader contribution, however big or small, is so valuable