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Smoke rises from a chimney of a garbage processing plant on the outskirts of the Belgian city of Brussels, March 10, 2016.

Yves Herman/Reuters

Europe’s top companies need to more than double their current level of spending on low-carbon projects to meet the European Commission’s flagship goal of ‘climate neutrality’ by 2050, according to a report released on Tuesday.

The major study of 882 publicly-traded companies across multiple sectors by climate research provider CDP and consultancy Oliver Wyman showed they spent 124 billion euros (103 billion pounds) on capital investment and research and development in 2019.

That amounted to around 12% of total investment. To be on track to meet the goal of net-zero emissions by 2050 however, that figure needs to jump to 25%, said CDP Europe’s Managing Director Steven Tebbe.

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The biggest areas for new investment were electric vehicle technologies, with spend of some 43 billion euros, renewable energy, at 16 billion euros, and energy grid infrastructure, at 15 billion euros, the report said.

“Some European companies are making bold new low-carbon investments to roll out renewables, build greener infrastructure, buy electric vehicles and make manufacturing more energy-efficient,” Tebbe said.

“But there is a huge opportunity to do more, and we need to see more action across the board.”

While doubling capex spend was “a big ask,” Tebbe said the costs of inaction were higher still. The companies assessed account for around three-quarters of the EU’s total emissions and the same amount of its stock market capitalization.

“To help fill this investment gap, there’s a serious need for policy-makers and investors to help companies finance the breakthrough technologies of the future,” he added.

CDP, which works with companies and investors to help them manage their climate risk, is largely backed by funding from philanthropic and government grants.

European policy-makers are aiming to reduce emissions targets to 50%-55% below 1990 levels by 2030 and to achieve climate neutrality by 2050 as part of a 1 trillion euro ($1.1 trillion) European Green Deal.

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In a bid to achieve its goal, the EU last week opened a public consultation on how companies report the social and environmental impact of their activities, amid concern the current rules on corporate sustainability disclosures are not tough enough.

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