Companies wanting to thrive need to face up to the challenge of climate change and they are increasingly convinced that reducing carbon emissions can have a positive impact on market demand, reputation and even supply chains.
The good news is that a significant chunk of them across the EU, UK and US are increasingly convinced reducing emissions is good for business, shows data from a major new survey by the European Investment Bank (EIB).
The EIB asked 13,300 companies – ranging from SMEs to large corporations – to assess the impact of reducing CO2 emissions on market demand for their products. Across the 29 countries surveyed, an average of 27.8% of companies said it had a positive impact, while only 17.3% said it had a negative impact.
Companies in France were most positive, with 52.8% saying that reducing emissions had a positive impact on market demand, versus 9.7% who said it did not. In general, western European countries were more likely to cite reducing emissions as having a positive impact than those in eastern Europe.
Companies in all but four countries – Cyprus, Romania, Greece and Estonia – said reducing emissions was more likely to have a positive than negative impact on market demand. Greek companies saw the least value in reducing emissions, with just 13.7% saying it boosted market demand, versus 17.1% who said it did not.
“Our engagement with companies from across different sectors has shown that businesses see significant potential in a transition to net-zero emissions,” says Ana Musat, head of policy at the Aldersgate Group, a UK climate think tank .
However, governments must now set a “clear direction of travel” to maximise the economic benefits, she adds. It is through “regulation, market mechanisms and investment in skills, [that] private investment will flow into low-carbon solutions and facilitate a timely transition that maximises opportunities for business”, she says.
Companies are more likely to see market demand benefits in countries where a greater share of the population is highly motivated to tackle climate change, the analysis suggests.
Seven European countries surveyed by the EIB were also surveyed by the UN. Of those seven countries, Polish people were least likely to believe we should do “everything necessary” to fight climate change. In the EIB survey, Polish companies were also least likely to see a positive impact on market demand when reducing emissions, with only 24% of them saying this was the case.