Study: Companies in the DACH region are overall not yet making a sufficient contribution to achieving the 1.5°C target

Hamburg, October 5, 2023 - Despite detailed climate strategies to reduce emissions, the companies that published their carbon footprints for 2021 and 2022 did not reduce CO₂ e-emissions sufficiently in 2022 to meet the requirements of the United Nations' 1.5°C target. A look at the companies' emissions figures communicated in their reports shows that total emissions decreased by only one percent year-on-year in 2021/2022 across all indices. This is the conclusion of the study by BDO AG Wirtschaftsprüfungsgesellschaft and Kirchhoff Consult AG, for which the 200 companies from the DAX 40, MDAX and SDAX as well as the SMI and ATX were examined based on sustainability reports and non-financial statements.*

Climate management: companies with scientifically validated targets show greatest reduction successes

However, the joint study also shows that the companies that have already committed to short-term and scientifically validated reduction targets in accordance with the Science Based Targets Initiative (SBTi) were able to reduce more than nine percent of their Scope 1 and Scope 2 emissions - i.e., direct emissions from their own business activities as well as indirect emissions from purchased energy - in the reporting year 2022.

"This result indicates that a commitment to absolute greenhouse gas reductions with the support of SBTi is having an impact," said Dr. Jan-Ole Brandt, Senior Consultant at Kirchhoff Consult AG. "Despite the small overall contribution that companies are making to the 1.5°C target so far, and despite their partial dependence on basic conditions that need to be created politically, there is already some evidence that they are on a good track overall. In more than three quarters of all sustainability reports examined, a detailed climate balance sheet is published for the year 2022, and around two thirds follow the recommended guidelines of the Task Force on Climate-related Financial Disclosures (TCFD). This provides greater transparency and forms the basis for successful climate management."

„Fit for CSRD“ are mainly the big players

With the adoption of the Corporate Sustainability Reporting Directive (CSRD), there will also be an obligation to have sustainability reporting externally audited in the future: Accordingly, more than three quarters (76 percent) of all companies surveyed had already had their non-financial statements externally audited before the CSRD came into force. However, this applies mainly to larger companies: NFEs from the SDAX have the lowest audit density at 58 percent. The same is true of voluntary sustainability reports: here, almost two-thirds (64 percent) have an external audit. In the SDAX, the figure is just 33 percent.

In terms of materiality, most companies are prepared: 96 percent of companies refer to a materiality analysis in their voluntary sustainability reports. "However, as the NFE analysis shows, so far only just over a quarter of companies also take into account the principle of dual materiality according to CSRD - i.e., financial and impact materiality. In the SDAX, however, not even one in five," says Viola Möller, Partner Sustainability Services at BDO.

These and other results on the topics of executive compensation, women in management positions, EU taxonomy and the Supply Chain Due Diligence Act (LkSG) can be found here in our study (German only).

Suitable images are available for download here:

Graphic 1: Greenhouse gas emissions 2021/2022 (German only)
Graphic 2: External verification of sustainability reports (German only)

_{*The study is based on a descriptive category system-based secondary data analysis of the sustainability reports and non-financial reporting according to CSR-RUG of all DAX 160, ATX and SMI companies as of June 30, 2023.}