Major German companies reduce emissions by combined 4% along entire value chain in 2023
Clean Energy Wire
The 40 large companies listed in the German DAX stock market index reduced their full value chain greenhouse gas emissions by a combined four percent in 2023, compared to the previous year, found an analysis by consultancy EY. The results of the analysis include emissions from sources that are owned or controlled by a company, for example purchased energy; and those that come from outside of the company, for example in their supply chains or the use of their products – referred to as scope 1, 2 and 3 emissions respectively. If scope 3 emissions are removed, then the emission reductions in 2023 increase to 14 percent. “Overall, the German economy is making good progress in reducing CO2 emissions,” said Simon Fahrenholz, head of sustainability consulting in the strategy and transactions division at EY. “Of course, the top companies in particular have a leading role and the responsibility to act. The numbers show that they are currently living up to this responsibility.”
Fahrenholz, however, warned against complacency and said that this speed of emissions reductions will not continue. Many of the companies reduced their emissions by switching to renewable energy, which he says has a “strong effect”, but that it only “comes into play once”. Energy consumption across the companies sank, but not to the same degree as emissions did. “Reducing energy consumption is one of the most important and sustainable levers for achieving a reduction in greenhouse gas emissions,” said Fahrenholz.
Many companies have announced plans to reduce their carbon footprint. However, on closer inspection, many ambitious-sounding pledges ring hollow. A report published in July found that if the 40 largest companies in the DAX stock market index did not reduce their emissions, global average temperatures would rise by almost 5°C above pre-industrial levels. Similarly, a 2022 report found that long-term emissions reductions plans for major DAX companies were insufficient to reach net zero targets.
