DAX companies significantly reduce emissions
On climate protection, German industry is not exactly at the forefront. However, an analysis shows progress among the largest DAX companies: Last year, emissions fell by around 14 percent. Experts say they are on the right track, but there is still much to do.
The heaviest hitters on the German stock exchange have reduced their greenhouse gas emissions, 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 shown in the analysis by the audit 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 increased them. One company did not provide any information. The largest percentage decrease was recorded by chip manufacturer Infineon and insurer Allianz, while the largest increase was seen by sports car maker Porsche AG. The largest emitter in 2023 was building materials company Heidelberg Materials, followed by energy company RWE and chemical company BASF.
These figures include emissions generated by processes in ongoing operations, such as machinery, own power plants, or the company's vehicle fleet. However, they also include greenhouse gases emitted during the production of purchased energy, such as when a company buys electricity or district heating from a supplier with fossil fuel power plants.
Expert warns against complacency
Simon Fahrenholz, head of EY's sustainability consulting, praises the German economy's 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 immediate 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 progress: "The further reduction of the CO2 footprint will not happen automatically." In fact, many companies are currently under pressure due to uncertain business prospects, among other things. "There is a risk that the sustainable transformation of the business model will become a backburner issue and not receive enough attention." To tackle this mammoth task, companies need to integrate decarbonization holistically into their business 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 supply chains, transport, product use, and disposal. Including these, DAX companies are responsible for emissions of around 3.5 billion tonnes - nine percent of global greenhouse gas emissions last year. The decrease compared to 2022 is therefore only four percent.
According to Fahrenholz, companies' ability to gain an overview of 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 analysis from EY highlights the reduction in greenhouse gas emissions by the DAX companies, with a significant decrease of 14% last year. Many heavyweight companies on the German stock exchange have contributed to this decrease, reducing their direct emissions to 189 million tonnes of CO2 equivalents.
Despite this progress, Simon Fahrenholz, head of EY's sustainability consulting, warns against complacency, emphasizing that the further reduction of the CO2 footprint will not happen automatically due to various challenges faced by many companies.
