Green spending surges at European companies, claims EU

Firms report big increases in taxonomy-aligned capex, according to a review from the European Commission

The European Commission has released an update on how companies are using its green taxonomy, claiming there has been a boom in spending on eligible activities over the past year.

In the three-page review, the Commission said capital expenditure into taxonomy-aligned projects had increased significantly in 2024.

“In 2023, around 600 European companies reported capital investments into taxonomy-aligned activities of €191bn. Thus far in 2024, companies have already reported €249bn, signalling significant growth,” it stated.

It is not clear from the document where the data for capital expenditure is drawn from, but it includes firms’ reporting for the 2023 financial year and, where that is currently unavailable, for the 2022 financial year. Companies in Norway, Switzerland and the UK are included in the figures, despite not being obliged to disclose in line with the EU’s framework.

“These numbers are expected to grow further as companies start to report on the four environmental objectives of the taxonomy,” suggested the Commission.

Beginning this year, companies are required to expand their taxonomy disclosures to cover biodiversity, water, waste and circular-economy objectives in addition to the existing duty to report on climate mitigation and adaptation activities.

For each environmental objective, firms should explain how much of their revenues are generated by activities that qualify under the taxonomy, and how much of their capital expenditure is allocated towards such activities.

“On average, around 20% of companies’ capital investments are aligned with the taxonomy,” the Commission claimed.

As of May 2024, German companies reported the highest levels at €114bn, followed by France (€63bn), Spain (€60bn) and Italy (€48bn).