Dax companies significantly reduce emissions
In the realm of climate protection, the German industry is not exactly at the forefront. However, an analysis shows progress among the largest DAX companies: Last year, emissions decreased by around 14 percent. Experts say they are on a good path, but there is still much to be done.
The heavyweights of the German stock market have reduced their greenhouse gas emissions in the past year, according to a current evaluation. Compared to 2022, the direct emissions of DAX companies fell from 218 to 189 million tonnes of CO2 equivalents - a decrease of around 14 percent. This is evident from the analysis by the auditing and consulting firm EY, which evaluated the sustainability reports of the 40 companies. In these reports, they document their efforts towards climate neutrality.
The decrease amounts to almost 30 million tonnes of CO2 equivalents, which corresponds to the annual emissions of 17.4 million average new cars with a mileage of 15,000 kilometers, according to EY. In total, 32 DAX companies reduced their emissions, while seven emitted more greenhouse gases than in 2022. One company did not provide any information. The chip manufacturer Infineon and the insurer Allianz recorded the largest percentage decrease, while the sports car manufacturer Porsche AG had the largest increase. In 2023, the building materials company Heidelberg Materials was the largest emitter, followed by the energy company RWE and the chemical company BASF.
The numbers include emissions from processes in ongoing operations, such as machinery, own power plants, or the company's fleet. However, they also include greenhouse gases emitted during the production of purchased energy, for example, when a company buys electricity or district heat from a supplier with fossil power plants.
Expert warns against complacency
Simon Fahrenholz, head of EY's sustainability consulting, praises the German economy for making good progress in reducing emissions, with top companies taking a leading role.
However, Fahrenholz does not expect the current pace to continue. Many companies have so far focused on individual measures, such as switching to renewable energy sources, which is relatively easy to implement and has a strong effect. However, this effect is only one-time, as shown by the fact that the energy consumption of DAX companies has decreased much less than their emissions.
Fahrenholz warns against complacency despite the good development: "The further reduction of the CO2 footprint will not happen automatically." On the contrary, many companies are currently under pressure due to, for example, uncertain business prospects. "There is a risk that the sustainable transformation of the business model will become a back burner issue and not receive enough attention." To tackle the mammoth task, companies need to integrate decarbonization holistically into their corporate strategy.
Indirect emissions are much higher
The analysis also considers another category of emissions: those that cannot be directly attributed to the companies because they occur at upstream and downstream stages of the value chain, such as the supply chain, transport, product use, and disposal. If these are included, DAX companies are responsible for emissions of around 3.5 billion tonnes - nine percent of the world's total greenhouse gas emissions last year. The decrease compared to 2022 is then only four percent.
According to Fahrenholz, companies' ability to gain insight into their indirect emissions is limited: To increase transparency and reduce these emissions, comprehensive efforts are required. For instance, corporations must negotiate with suppliers and waste management companies. Changes in product development are also necessary. "This takes time, and successes may only become apparent after several years."
The decrease in CO2 emissions from the transport of goods within the DAX companies was not specifically mentioned in the analysis, but overall emissions saw a significant decrease. According to expert Simon Fahrenholz, businesses need to holistically integrate decarbonization into their corporate strategy to reduce indirect emissions, which include those from transport, as gaining insight and reducing them requires considerable efforts and time.
