Climate footprint of DAX companies: What if the world did business like this?

What if the entire world operated like a certain company? And by how many degrees would it heat up? The Frankfurt sustainability consulting firm “Right.based on science” asks these questions and appropriately calls its evaluation “What if”.

The team evaluates companies’ sustainability reports. This year there are emissions and financial data from a total of 71 DAX companies, from the leading index DAX, the MDAX and the SDAX. The data is then put in relation to the goals of the Paris Climate Agreement, with a limit of 1.7 degrees of global warming by 2100.

Degree number should make the climate goal clear

It is a methodology that is intended to have a simple number at the end to compare climate protection efforts. Deutsche Telekom, for example, is just above the Paris target - at 1.8 degrees. It started at 5 degrees. The trend is positive, which makes Robert Metzke, Head of Corporate Responsibility, happy.

The group is focusing on "green" electricity and more efficiency, keeping total energy consumption constant despite the constantly increasing amounts of data and has "reduced energy consumption, for example, from over 90 kilowatt hours per terabyte to 48 kilowatt hours per terabyte," said Metzke. Telekom wants to be climate neutral by 2040.

Telekom is a positive example, but the report as a whole does not show a completely positive trend, says Hanna Helmke, managing director of "Right.based on science": "We have more companies that have deteriorated than have improved." That shows that “a bit of momentum has gone out.” Your consulting company has not only been calculating degree targets for several years, but also sells software that is intended to make it easier for companies to achieve climate neutrality.

Emissions and value creation

The report's calculations look at emissions, but also at companies' balance sheets and put them into perspective. To put it simply, that meant: If the balance sheet is worse, emissions would also have to shrink; If this doesn't happen, the number of degrees deteriorates. One example is the Leverkusen-based company Bayer. In the report it is currently on the way to 7.5 degrees.

This is due, among other things, to the billion-dollar legal disputes that are involved, says Helmke. Bayer itself does not share this assessment. You have to look at the overall picture, emphasizes Daniel Schneiders, who is responsible for sustainability issues at Bayer. Bayer's business model with a combination of pharmaceuticals and agriculture is unique: "And we don't see that reflected in the report's approach either."

But we are in contact with the makers. The group wants to be climate neutral by 2050 at the latest. Bayer also faces some challenges, such as decarbonizing the supply chain and raw materials; this is “challenging”.

Which industries are having a hard time?

At first glance, the report does not provide a clear statement as to which sectors have the most difficulty in operating more CO2-efficiently. With the exception of the chemical industry. According to managing director Hanna Helmke, it continues to be difficult for them to reduce emissions. However, it can already be seen from the past few years that the climate goals companies have set themselves often have nothing to do with reality. Some companies have ambitious goals but don't put in enough effort.

Others have no goals or low goals, but according to the analysis they are doing very well. Helmke is looking excitedly at industries that she believes have a lot of potential to shift course by a few degrees - like the steel industry.

According to the report, Salzgitter AG, for example, is currently at 6.4 degrees, but wants to save a lot of climate-damaging gas in the next few years by purchasing and producing its own hydrogen. The company is currently producing around 8 million tons of CO2. According to the company, they want to be climate neutral by 2030.

The influence of climate reports

Climate economist Paul Lehmann from the University of Leipzig notes critically that in times of economic downturn, some companies could see worse emissions values.

Nevertheless, such reports could motivate and also create pressure on companies. That is why it is important to have different instruments to promote climate neutrality, for example emissions trading.