Many Bavarian companies explained that this share remains limited mainly because of their lack of confidence in economic developments and uncertainty in political conditions.
For the third consecutive year, the German economy has shown signs of weakness. The Bavarian Business Association (vbw) considered it remarkable that, despite these difficult circumstances, companies continue to dedicate 11 percent of their expenditures to climate protection projects, maintaining last year’s level. Bertram Brossardt, the chief executive officer of vbw, called this a clear sign of the business sector’s strong environmental awareness.
Achievement of Climate Goals Remains Uncertain
However, whether these investments will be sufficient to achieve medium-term climate protection targets remains disputed. The ifo Institute in Munich expressed confidence that Germany is on track to meet the targets set by the Federal Climate Protection Act for 2030 and 2045.
The think tank Agora Energiewende gave a less optimistic assessment, doubting that the measures introduced so far will be enough to meet the 2030 targets. Even more skepticism came from the Council of Experts on Climate Change, which advises the federal government. In its report published in May, the council warned that, from the current standpoint, the 2045 target remains well out of reach.
Bureaucracy and High Energy Costs Burden Companies
According to the vbw, the current restraint in climate-related investments by businesses is understandable. Bavarian companies are facing a variety of challenges that make investment decisions difficult. In addition to globally weak economic conditions, the vbw cited politically driven competitive disadvantages in Germany, such as high electricity prices compared to international markets and excessive bureaucracy. Brossardt called for decisive action from the government to provide clear incentives for industrial transformation and to ensure greater reliability and predictability in energy and climate policy.
The Chamber of Industry and Commerce (IHK) for Munich and Upper Bavaria also criticized obstacles, pointing out that planning and approval processes remain lengthy and are increasingly deterring companies. According to the IHK, more Bavarian firms are now shifting their investments abroad.
Corporate Responsibility Increasing but Implementation Often Stalls
Nevertheless, awareness of the need for climate protection measures has grown significantly among Bavarian businesses. In the latest Energy Transition Barometer of the IHK, 85 percent of the companies surveyed reported pursuing their own climate goals. In 2021, this figure was only 45 percent. However, concrete implementation of these goals often fails due to financial or structural hurdles.
The ifo Institute expressed particular concern about developments in the transport sector, which includes the major automobile manufacturers. Germany risks missing its emission targets in this area. The Bavarian carmaker BMW reaffirmed its climate strategy, stating its goal to reduce CO₂ emissions across the entire supply chain by 90 percent by 2050 compared to 2019 levels. However, BMW emphasized that, in practice, it is difficult to separate climate-specific investments from other corporate expenditures. The company plans to invest more than nine billion euros across the group this year.
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