Highlights
- EU businesses lead way in investments in climate mitigation and adaptation, with 61% having already invested and 53% planning to do so.
- Use of advanced digital technologies on the rise as 74% of European firms embrace advanced technologies to enhance competitiveness.
- Faced with trade shocks, firms are investing in more resilient and secure supply chains.
Companies in the European Union weathered relatively well the health, price and trade shocks of the last four years and have increased their ambitions for green and digital transformation, according to a survey by the European Investment Bank (EIB).
The EIB's Investment Survey 2024 , released today (Oct 23) at the World Bank-IMF Annual Meetings in Washington, paints a picture of leadership of EU businesses in the green transition and the reinforcement of their supply chains in the face of heightened geopolitical risks and supply-chain disruptions.
Many firms in Europe are satisfied with their investment levels over the past three years and are committed to tackling climate change and embracing digital technologies, the survey shows. It covers a total of around 12,000 companies in all EU countries as well as a comparison sample in the United States.
While the share of EU companies expecting to increase rather than decrease investment has halved to a net balance of 7% in 2024, compared with last year, businesses in Europe continue to outpace their US counterparts and lead in investments to slash emissions that cause climate change or cope with the impact of severe weather. The latest Investment Survey shows that 61% of EU firms have invested in tackling climate change, compared to 56% in 2023 and 53% in 2022. The green transition impose transformation, but also brings opportunities. More than a quarter of EU firms -27%- view the transition to a net-zero economy, as an opportunity over the next five years.
"The commitment of EU firms to the green and digital transitions illustrates the potential of the European economy," said EIB President Nadia Calviño. "The survey confirms that public-private partnership is at the heart of strategic investments to sustain the competitiveness, security and autonomy of the EU in global markets."
Around 90% of EU and US firms have taken measures to reduce greenhouse gas emissions. Key strategies adopted include investment in waste reduction and recycling and energy efficiency. EU companies are more likely than US ones to have enacted sustainable transport options, opted for renewable-energy generation and set emissions-reduction targets. One in three EU companies -34%- sees the green transition as a business risk compared with 42% in the US.
In the EU, 37% of total investments by businesses are directed towards intangible assets such as research, skills and know-how, highlighting a strategic focus on innovation and digital solutions.74% of EU businesses reported using digital technologies, marking a 4% increase from last year. Meanwhile, the US continues to lead at 81%.
Looking ahead to the next three years, however, many European companies are prioritising replacement investments over capacity expansion, with only 26% of EU firms planning to expand operations in the next three years compared with 47% of US firms.
"The focus of EU companies on innovation is welcome and must be supported", added EIB President Nadia Calviño. "That is why the EIB Group is working on new Action Plan to reinforce the integration of Europe´s Capital Markets and thereby channel private savings into productive investment in Europe".
The business environment remains a concern for firms in the European Union and the United States, with lack of skilled labour and uncertainty about the future as one of the key concerns in both regions. Business investment is still hindered by high energy costs, which pose significant obstacles for 46% of EU businesses.
The majority (60%) of EU exporters report that they still have to comply with different standards and consumer protection rules from one Member State to the next, highlighting that market fragmentation persists.
"European firms are making strides in addressing both climate change and the digital transformation," said EIB Chief Economist Debora Revoltella. "But boosting EU investment requires a less fragmented EU single market."
The survey also underscores the importance of robust supply chains. Concerns about trade disruptions have eased compared to last year, but firms did not see improvements in terms of new regulations, tariffs or trade restriction. EU companies are well integrated into global trade and substantially benefited from it in the past. In a new world with rising geopolitical tensions, EU firms are reacting by enhancing the resilience of their supply chains in looking at economic security and efficiency.
The 2024 report serves policymakers, economists and business leaders by providing insights into the investment landscape and identifying actions needed to foster economic growth and resilience. For more information and the full report, visit our website here.
Background information
The European Investment Bank (EIB) is the long-term lending institution of the European Union and is owned by its Member States. It provides finance and expertise for projects that contribute to the EU's policy objectives. The EIB works closely with public and private-sector partners to support sustainable investment, job creation, economic growth and innovation across Europe.
On October 7th, European Union Finance ministers have welcomed an Action Plan to be deployed by the European Investment Bank (EIB) Group, to support the development of the EU's Capital Markets Union. One key objective of the Action Plan is closing the funding gap throughout the company and innovation cycle; the EIB Group plans to scale up support for the EU venture capital and private equity markets, to help retain the most innovative scale-ups in Europe.
About the report
The EIB Group Survey on Investment, which has been carried out since 2016, is a unique annual survey of some 12,000 firms. Data for the latest edition was collected in mid-2024 from companies in all EU Member States. The survey also includes a sample of businesses in the United States. The survey collects data on company characteristics and performance, past investment activities and future plans, sources of finance, financing hurdles and other business challenges such as climate change, digitalisation and international trade.
