Companies call for ambitious 2040 climate target as EU 'closes in' on 2030 goals

Companies are calling on the EU to set a 90% GHG reduction target for 2040, as the European Commission announces that the bloc is nearly on track to meet its 2030 goals.

Over 150 business leaders and investors have signed a letter urging the EU to adopt a net GHG emissions reduction target of at least 90% by 2040 in order to strengthen the business case for decarbonisation.

Corporate Leaders Group (CLG) Europe renewed the call for a robust 2040 target this week with the newly added signatures of Allianz, EDF, Ethos Foundation, Henkel, Hewlett Packard Enterprise (HPE), Interface, LBP AM, Nexi, Schneider Electric, Triodos Bank and Vattenfall.

A 90% reduction in greenhouse gas emissions would be in line with the European Commission’s 2040 target recommendation – which the group calls “a step in the right direction”.

However, the companies argue that “90% should be considered as the floor rather than the ceiling for ambition”, and that the plan should prioritise emissions mitigation and set clear limits for the use of nature-based and technological carbon removals – which, along with carbon capture and storage, are a key part of the Commission’s recommendation.

“A 2040 EU emission reduction target of at least 90% provides long-term certainty to investors. This clarity enables confident capital allocation. Aligning national policy with climate science will help avert climate impacts. It will also unlock investment in sustainable infrastructure. We encourage policymakers to deliver the clarity and ambition that investors are ready to support,” said Günther Thallinger, Member of the Board of Management of Allianz SE, Investment Management, Sustainability. 

The EU is set to formally announce its 2040 climate target in the coming weeks.

EU Member States ‘closing the gap’ to 2030 climate goals

CLG’s renewed call comes the same week as some good news from the European Commission on the EU’s 2030 climate goals.

According to the revised national plans announced by Member States following the Commission’s recommendations in December 2023, the EU is “closing in collectively on a 55% reduction in greenhouse gas emissions, as committed in the European Climate Law, and reaching a share of at least 42.5% of renewable energy”, the Commission has announced.

The new assessment shows that the EU is on track to cut emissions by around 54% by 2030, from 1990 levels if countries implement their existing policies fully. As of the end of 2023, EU emissions are already down by 37% compared to 1990. 

“Europe is proving that reliable and predictable science-based targets and adequate regulation deliver. The updated National Energy and Climate Plans show that the green agenda is not just a target but a way to modernise our economies and to bet on industrial innovation and more opportunities for Europeans. Our task now is to deepen in our capacities and boost action with no delays. We can deliver 55% and we need to build the conditions to reach 90% by 2040. Competitiveness, security, wealth creation and inclusiveness depend on our capacities to move forward a consistent and comprehensive political action plan,” commented Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition.

EU-wide initiatives such as the Clean Industrial Deal and the Affordable Energy Action Plan are set to complement national climate plans by mobilising investments in industrial decarbonisation and clean technology, the Commission added.