Sustainability Remains Executive Priority in German Companies Amid Declining Momentum

A recent study highlights that sustainability continues to be the responsibility of company executives in Germany, with 73% of firms placing this mandate at the board or executive level. However, the urgency and internal focus on sustainability initiatives are waning, as 59% of companies report a decline in sustainability’s priority, up sharply from 14% last year.

This trend emerges from the fourth Sustainability Transformation Monitor (STM), which surveyed 822 German companies across sectors. Political uncertainty and a lack of market incentives are cited as significant barriers to advancing sustainability transformations. Although 86% of companies monitor their greenhouse gas emissions and 59% have set climate targets—an increase from 53% last year—only 17% see a clear business case for sustainability efforts. Moreover, 70% indicate that insufficient economic incentives hinder progress.

Despite recognizing some financial benefits, only 30% of companies and 37% of banks consider sustainability important in financing discussions, signaling a diminishing role of sustainability data in credit decisions. The report underscores the necessity for reliable political frameworks and market tools like CO2 pricing to drive further engagement.

The STM aims to provide evidence-based insights to support cooperation between businesses, banks, and policymakers in overcoming these challenges. As sustainability remains top-level responsibility, the decline in internal momentum poses a significant test for Germany’s corporate sustainability ambitions moving forward.