Report: Climate protection drops as a priority for German firms

Climate protection and sustainability are losing momentum among companies in Germany, with many citing political uncertainty and weak market incentives as obstacles, a report published by the Bertelsmann Foundation on Thursday showed.

Nearly 60% of more than 800 companies surveyed said sustainability had declined in priority internally, up from just 14% a year earlier, according to the Sustainability Transformation Monitor released in cooperation with the Mercator Foundation.

While 73% of firms in the real and financial economy still anchor responsibility for sustainability at board or executive level — unchanged from last year — many appear to be slowing their efforts.

The report's authors said companies view uncertain political frameworks and a lack of market incentives as the main barriers to further transformation, a rise of 30 percentage points year-on-year.

The share of companies planning new sustainability initiatives fell by 7 percentage points.

Without clear and reliable signals from policymakers and markets, the transformation risks entering a phase of stagnation, said Jakob Kunzlmann, sustainability expert at the Bertelsmann Foundation.

At the same time, the proportion of companies setting their own climate targets increased to 59% from 53% and among banks to 65% from 46%.

It is an important signal that more companies are tracking emissions and sticking to climate goals, said Philipp Wesemann of the Mercator Foundation, adding that concrete investment plans and timelines were now crucial.

The Germany government has committed to achieving climate neutrality by 2045. The report presented on Thursday is intended to provide stakeholders with a data basis for decision-making.