According to a survey conducted by the Ifo Institute, German companies allocated an average of 9.3 percent of their investments towards climate protection measures within their own operations in 2025. They are planning to increase this share moderately for the coming years, targeting 10.6 percent for 2026 and 10.5 percent for 2027.
Ifo researcher Gerome Wolf noted that this planned growth is not substantial, especially considering that climate-friendly investment demand is expected to peak during this period-a peak necessary to meet the emission targets set in the Paris Agreement and by the German government itself.
The commitment varies significantly across different industrial sectors. Service providers are planning the highest share of climate investments for 2026, at 12.2 percent, followed by the construction industry, which targets 10.5 percent. Manufacturing is estimated at 8.8 percent, and trade at 8.5 percent. Notably, construction is the only sector planning to extend its share into 2027 (at 11.2 percent).
While the survey data does not provide a definitive answer as to why the investment figures are not rising more rapidly, Wolf suggested that companies might be prioritizing different objectives due to diminished competitiveness in export markets and rising geopolitical risks.
A current study from the institute further indicates that corporate caution regarding climate investments could be linked to high political economic uncertainty. In his analysis, Wolf explained that a high carbon dioxide price alone is insufficient to make the use of fossil fuels unattractive or to compel companies to shift to climate-friendly alternatives if the future price path for emissions remains highly uncertain. He concluded that reliable regulatory frameworks are thus essential for businesses to successfully implement the energy transition.
