The share of European firms investing in climate has jumped by 10 percentage points in the last year alone, reaching 53% on average, according to fresh data collected by the European Investment Bank (EIB).
The increase was particularly pronounced in Central and Eastern Europe, up 15% and in SMEs, up 11%.
Energy-intensive manufacturers were also found to have a stronger appetite for climate investments than non-energy intensive firms, with 48% currently investing and 57% are planning to invest.
However, only 29% of the surveyed firms were optimistic about the net-zero transition, and around 32% were outright pessimistic.
The data also showed high uncertainty was dampening readiness to invest in energy efficiency, down 4% compared to 2021.
The answers received by the EIB derived from 12,500 investment firms across Europe responding to a broad spectrum of questions on corporate investment and investment finance, as well as a survey of EU municipalities.
Almost nine in ten EU firms were also shown to have taken up climate mitigation measures, with recycling and energy efficiency being the most popular. Overall, Western and Northern Europe has invested more in mitigation than Southern Europe and Central and Eastern Europe.
EIB chief economist Debora Revoltella said: “Europe’s future depends on our ability to transform and embrace the digital and green transitions. This calls for bold investment in climate action and climate mitigation. EU firms have realised that climate change is not a distant reality anymore.
“Many companies will continue investing in climate action to cope with soaring energy costs and play their part in the green transition. However, despite an increase in climate investment, ongoing uncertainty is weighing heavily on EU firms and dampening their readiness to invest in climate solutions.”
According to the EIB, more firms felt exposed to physical climate risks such as extreme weather events. Almost 60% of European firms reported facing physical risks, while only a third said that they had taken at least one action to protect their business from those risks. Southern Europe overall felt more exposed to physical risks.
The survey also showed that the energy crisis has spurred investment in energy efficiency solutions. Around 40% of European firms invest in energy efficiency, a share that went up from 2021. Western and Northern Europe, energy-intensive manufacturing and large firms led the trend.
Last month, Net Zero Investor looked into the EIB’s data on its public private partnership financing for green projects between 1990 – 2022, showing this approach may be even more effective than green subsidies.
