Majority of Germany's largest companies miss self-imposed decarbonization targets

On the way to net zero, the majority of companies in Germany's most important share indices have set themselves transparent and ambitious targets: 66% of companies have committed to long-term targets for their Scope 1 and Scope 2 emissions. The former include the direct emissions of companies, while the latter take into account the indirect CO₂ emissions resulting from the purchase of energy. Almost every company (90 percent) reports emissions in these two categories. Ambition and transparency are less pronounced in the area of Scope 3 emissions. Only around a third (33%) of companies set clear targets for the reduction of greenhouse gas emissions that occur indirectly in the organizations' upstream and downstream value chain.

This is shown by the "Decarbonization Study 2024", for which KPMG in Germany analysed the sustainability reports of the 160 largest DAX, MDAX and SDAX companies listed in Germany with regard to the status of their decarbonization. The findings were supplemented by the assessments of 30 top decision-makers from various large companies in the industrial sector, with whom KPMG conducted expert interviews for the study.

"The decarbonization of German industry is not failing for lack of will. Companies have long recognized that they need to act now in order to be successful in the long term. However, many companies are still struggling to put the goals they have set themselves into practice. The climate transformation remains a major challenge," says Benedikt Herles, Director and EMA Head of ESG Insights & Innovation at KPMG in Germany. More than half of companies (57%) are lagging behind their self-imposed targets for Scope 1 and Scope 2 emissions. The study reveals major differences in a sector comparison: While financial companies are still closest to their Scope 1 and Scope 2 targets (66.7 percent), only 16.7 percent of companies in the chemicals and materials industry are on track to achieve their targets according to self-communicated assessments.

 "We must take this development seriously, because as the world's third-largest economy, Germany has a major influence on global greenhouse gas emissions," says Herles. According to the study, the Scope 1 and Scope 2 emissions of the largest German companies are responsible for 0.5 percent of global greenhouse gas emissions.

With regard to the industrial sector, which is critical for Germany, the results of the expert interviews show that the majority of companies have not yet ventured a forecast as to when they could be climate-neutral or emission-free: 63% of the 30 companies surveyed have not set a specific year - although they certainly see long-term potential in decarbonization. More than half of those surveyed are convinced that the climate transformation will improve their competitive position. Only 11% expect a negative effect on long-term profitability. There is also a consensus on the importance of the transformation: 75% of respondents expect major changes in their business and operating models. They see potential for increasing value in the areas of energy management, green product innovation, the circular economy, transparent supply chains and digital climate technologies.

Clemens Reisbeck

Deputy Head Corporate Communications
KPMG AG Wirtschaftsprüfungsgesellschaft

T +49 89 9282 1722

creisbeck@kpmg.com