Sustainability Really Does Pay Off

The ESG measures implemented by European companies are increasingly bearing fruit. This not only boosts their own sales, but also stimulates Europe as a business location. However, continued commitment is needed to ensure that this remains the case.

Sustainability has evolved from a buzzword into an economic factor. As revealed in the "Sustainability Value Creation" study conducted by the auditing firm KPMG, 75 percent of the 354 European companies surveyed have found that sustainability has a financial impact. ESG, which encompasses the three pillars of environmental, social, and governance, is thus realizing its tangible potential.

Revenue Through Sustainability Is Now an Issue

Efficiency gains and growth in new markets are contributing to this. This development is also affecting companies' priorities.

• For example, 54 percent are now focusing on revenue growth and
• access to capital (41 percent).
• Factors such as risk reduction (59 percent) and
• efficiency gains (55 percent) remain relevant.

ESG Investment Willingness Increases

Our data shows a clear reassessment of ESG: the question of whether sustainability has a business case has been answered. Now it's a matter of which measures make the greatest financial and competitive contribution—and how this success can be measured. Done right, sustainability becomes a catalyst for operational and commercial success."

comments Thimo Stoll, partner at KPMG in Germany, on the study results. In fact, the companies surveyed are willing to further intensify their efforts: 36 percent already invest more than ten percent of their total investments in sustainability-related measures. According to forecasts, this share could rise to 59 percent in the next three years.

Green Tech Boosts the Economy

For companies, ESG is therefore increasingly becoming a financial lever, which also stimulates willingness to invest. This is confirmed by the Green Tech Atlas 2025 published in the summer by the Federal Ministry for the Environment and the Federal Environment Agency (UBA). According to the atlas, nine percent of Germany's gross value added is now attributable to companies that offer environmentally and climate-friendly technologies and services. While gross value added was still at 314 billion euros in 2023, it could grow to over 620 billion euros by 2045.

"The GreenTech Atlas 2025 shows that the sector is a strong pillar for German industry as a whole in times of crisis and change," is the clear conclusion of UBA President Dirk Messner. This is also reflected in the number of people employed in the German green tech sector, which has been growing faster than the economy as a whole since 2010. In 2023, the sector employed 3.4 million people, about three times as many as in the automotive industry.

Don't Squander the Lead in Green Technology

According to the study, more than half of all green tech patent applications worldwide come from the US, Japan, and Germany. The efforts of companies in other European countries are also paying off, propelling Europe to the forefront of the sustainability sector. However, China is catching up fast and could soon overtake this lead. It is therefore not only worth intensifying our own efforts, but also rigorously implementing the measures already taken.

However, according to the KPMG study, this is precisely where the problem lies. The majority of companies (54 percent) do not yet regularly quantify the financial benefits of their ESG measures. Poor data quality, unclear evaluation methods, and the complexity of many ESG measures make measurability noticeably difficult, which also hinders progress.

This is a partly automated translation of this german article.