European companies spent €124 billion on reducing their carbon footprint in 2019 – but a report claims that is just half what they needed to spend if the EU is to reach its net-zero carbon target by 2050.

The CDP, a UK-based organisation specialising in environmental reporting, revealed in its latest report that Europe’s biggest 882 companies — which have emissions equivalent to 75% of the EU’s total — reported investing 12% of their capital expenditure in reducing carbon emissions in 2019.

“The reported low-carbon capital investment is only half of what is needed to put the European corporate sector on track for net-zero in 2050. Overall capital expenditure needs to increase from 12 to 25%,” the CDP stressed.

Companies in high-emitting sectors including materials, energy and transport drove the investments, accounting tor 5%, 38% and 50% respectively.

Most of the money, €65 billion, was poured into research and development with the remaining €59 billion invested in low-carbon electric utility technologies including renewables.

According to CDP, more investment is needed in the materials sector which comprises companies in the cement, chemicals, metals and mining and steel industries. These account for 38% of reported scope 1 and 2 emissions or direct and indirect emissions companies have control over.

Ratching up low carbon investments offered attractive economics, the CDP argued with companies identifying “€1.22 trillion of new revenue opportunities from low-carbon goods and services — more than six times the investment needed to realise them”.

The EU Commission announced last year that the bloc aims to become the world’s first net-zero continent by 2050 and unveiled a series of measures to transition the economy into a more environmentally friendly one.

EU member states must also cut their emissions by 40% compared to 1990 levels, and increase the share of renewable energy to 32% by 2030.

To achieve the target, Steven Tebbe, CDP Europe managing director, highlighted that “2020 must be our super decade of climate action.”

“This requires a fundamental transformation of our business model. The investment decisions taken by European companies and their owners will make or break whether we are successful – and they need to double down,” he added.