"Doubling Down: Europe’s Low Carbon Investment Opportunity": the CDP study on green investments
"EU leaders have agreed on a new target for climate neutrality by 2050: a clear signal for companies, investors and citizens of what Europe's future will be like. Achieving this goal means that the decarbonisation of our economy must move forward at a rate of almost 8% per year. This requires a fundamental transformation of our economic model ", declared the Managing Director CDP Europe in the new CDP publication published on February 25th.
"Doubling Down: Europe's Low Carbon Investment Opportunity" is the name of the new CDP study presented at the CDP Europe Awards, dedicated to new green investments capable of promoting the transition to climate neutrality, the net-zero emissions objective of the European Union to 2050.
The study, conducted on a sample of 882 European companies, estimated that in 2019 these companies, responsible for more than 3.2 GtCO2, invested around 124 billion euros in low carbon investments through the CDP system. The study shows how these investments are driven by highly impacting sectors such as energy and transport.
Despite the commitment and willingness of the private sector, CDP declares that investments in innovative technologies, especially in the materials sector, are necessary for a carbon neutral transition: this in fact represents only 5% of low-emission investments, despite being responsible 38% of Scope 1 and Scope 2 emissions. In particular, companies in the cement, chemicals, metals, mines and steel industries must be able to develop revolutionary technologies if they want to implement decarbonisation, as foreseen by EU ambitions.
CDP also declares that capital investment must double in order to put European firms on the right track of zero net emissions by 2050. The report uses CDP data on low carbon capital investment and associated emission reductions to estimate the annual capital investment required for the transition to a carbon neutral economy.
In the study, however, it is clear that the low-carbon investment business case offers interesting economic advantages and long-term opportunities: companies have expected to avoid over 2.4 GtCO2 thanks to new investments - more than the annual emissions of Germany, the United Kingdom, Italy, Poland and France put together - contributing over 40 billion euros to profits. Among the most profitable emission reduction initiatives have been investments in energy efficiency processes.
What is clear from the CDP study is that to bridge the gap in low-carbon investments, action is needed on multiple fronts.
"2020 must be the decade of climate action" concludes the Managing Director CDP Europe.