The latest insights from the We Mean Business coalition

Business backs bold EU climate targets

EU companies are more concerned than ever about climate risk – with EU-headquartered organizations twice as likely (49%) to view climate risk as a top10 business concern compared to their counterparts elsewhere. They are also among the most engaged in climate policy: a 2025 study from Influence Map found that 52% of the European companies it tracks demonstrate science-aligned or partially science-aligned climate policy engagement, up from just 24% in 2019. And so, as the European Union faces a pivotal moment for its future climate policies and targets, business has been speaking up.

Over the coming weeks, the European Union is set to make decisions that could shore up the region’s energy security, industrial competitiveness and global standing, as well as locking in the emissions cuts science demands. The proposed 90% cut in greenhouse gas emissions by 2040, put forward by the Commission in July, is now moving through the political process, with critical decisions in the coming weeks by the EU Council and Parliament. Meanwhile, the EU’s new national climate plan (NDC) under the Paris Agreement, with a 2035 timeframe is due by the end of September.  A robust NDC that tracks to the 90% 2040 target will put the EU firmly on the path to a safer, more prosperous future, and give business the certainty it needs to invest, while also sending a signal globally that the EU is still prepared to lead. 

Despite geopolitical uncertainty, business is backing this path because the case for a level of ambition aligned with the science could not be stronger. Climate impacts are already a business reality. German fund manager and insurer Allianz, recently stated that this year’s heatwaves may have already cut half a percentage point off European GDP. Businesses know the cost of inaction far outweighs the cost of transition. Findings from WBCSD’s Business Barometer show that 92% of global business leaders expect the cost of inaction to be higher, while 61% anticipate rising climate-related costs within the next year alone. The economic benefits for action are compelling. More than 100 large companies from Arup to Schneider Electric have worked as part of Climate Group’s EP100 energy-efficiency imitative to save $1.7 USD billion whilst reducing their emissions by more than the annual emissions of Brazil.  

Critically, business is already moving to seize the opportunities of a thriving clean economy but needs policy stability and a clear direction of travel to go faster. Supportive policy will create the conditions to develop the green jobs and innovation needed to ensure Europe’s position as a global leader in the transition to a climate neutral economy. 

EU businesses and investors call for robust targets 

In May 2025, more than 150 businesses and investors, coordinated by CLG Europe, signed a joint letter urging the EU to adopt a 2040 target of at least 90% emissions reductions. The signatories include CEOs, major investors, and sector networks from across Europe. Their message is unambiguous: a robust climate target is a driver of economic resilience, energy security, and competitiveness.

Linda Sundberg, Head of Sustainable Investing of Svenska kyrkan said: “A robust EU 2040 climate target is essential to give both investors and businesses the long-term clarity needed to accelerate the transition to a net-zero economy. Ambitious climate targets reduce uncertainty, guide strategic decisions, and will unlock capital for sustainable technologies and infrastructure. At the same time, the science is clear and so is our responsibility. The choices we make today will shape the lives of future generations. A bold EU target sends a strong message that Europe is committed to a just and science-based transition that protects both people and planet.” 

Alice Steenland, Chief of Strategy, Sustainability and Marketing of Signify said:    

“Poll after poll has confirmed that citizens and businesses from across the world and across the political spectrum are – still! -  asking governments to be more ambitious on climate action. Europe now has an opportunity to lead by setting a 90% emissions reduction target by 2040. This target is science-based and feasible – we know because Signify set the same target for our own climate transition plan. If we can do it, the European Union can do it too – we can do this together.”  
 

Business executives back an accelerated clean energy transition  

To achieve its emissions targets for 2035 and 2040, the EU will need to seize the opportunities of an accelerated transition from fossil fuels to a more stable and resilient clean energy economy – and there is overwhelming support for a rapid shift across major European economies. A landmark global poll of business executives in 15 countries, including Germany, Italy and Poland, shows that globally 97% of business leaders support the transition, with nearly 78% calling for a fully renewables-based system by 2035 or sooner.

Looking at the EU Member States surveyed, 78% of German business leaders said accelerating renewables will reduce exposure to volatile energy imports, with over 80% citing renewable access as a key factor in investment, supplier selection, and location decisions. In Italy, 98% favour speeding up the shift to renewables, and 76% want government investment prioritized in renewables-based electricity over gas. In Poland, nearly nine in ten business leaders want rapid acceleration to renewables-based electricity, with two-thirds calling for a direct transition from coal without detours into natural gas.
 

Business action holding but policy clarity is needed  

Building on the results of the global business poll, WBCSD’s Business Breakthrough Barometer draws on insights from over 300 leaders in 50 countries. It underscores that business is holding firm but needs a supportive policy environment for to realize its decarbonization ambition. In Europe, where clean energy and climate policy are increasingly tied to industrial strategy, policy clarity has become a decisive factor in attracting investment.

According to the Barometer’s global findings, 91% of companies have maintained or increased their net-zero investments over the past year, with 56% citing long-term industrial competitiveness, rather than regulation, as their primary motivation. Almost all respondents (96%) believe governments must stay committed to achieving net zero. Yet this commitment is being undermined by a growing policy gap, with half of global companies reporting declining confidence in government support

However, the Barometer also found that countries in Asia and Europe are increasingly attractive destinations for investment according to 74% of business leaders surveyed due to their long-term approach that moves beyond targets to coordinated industrial plans, driven by energy security priorities and new economic opportunities. More evidence still that the EU must forge ahead with ambitious targets to shore up private sector investment.  

Against this backdrop, delaying or weakening policy would send the wrong signal at precisely the wrong time, undermining confidence just as the private sector is scaling up investment.

The path forward  

The political negotiations ahead will be complex.  Political disparities across EU member states means there is pressure to weaken the 90% target, despite the strong economic and business case for ambition that companies are highlighting.  This would be an error that the EU cannot afford. 

But to make the politics work, some “flexibilities” are being considered to make it easier for EU countries to meet their fair share of the target.  One of these flexibilities concerns use of international carbon credits.  

The current proposal marks a shift in the EU’s policy position in this area, potentially allowing high-quality carbon credits to meet up to 3% of the EU 2040 target, but with use starting only in 2036.  Use of such credits must adhere to the highest quality standards and rules need to be designed to ensure that there is no dilution of the essential domestic investment need to drive the EU’s own transition towards a competitive net-zero economy. But if done right, limited use of credits could play a vital role in mobilising finance for climate action in developing countries, while still safeguarding EU leadership – as our CEO María Mendiluce outlines in a new piece for Forbes. 

The EU NDC and the 2040 target are essential to set the direction of travel, and to have most impact they need to come together; decoupling them, as some have suggested, risks locking in lower ambition and missing a chance to align with the science-based trajectory of  90% reduction by 2040.  

Beyond the targets, delivery depends on a wider package of implementation legislation, including the Clean Industrial Deal, following on from the EU Green Deal that was adopted in 2019. Together, this groundbreaking legislation package can drive investment where it’s needed, while also responding to the new geopolitical landscape and challenges to global trade. It also needs to be well-aligned with ongoing reforms to sustainability regulations for business, which need to focus on simplification for businesses rather than outright deregulation.   

Yet the business voice remains clear. Unlocking business investment benefits everyone: creating fulfilling careers for this generation and the next, and strengthening communities by lowering bills, cleaning up air and water, and restoring nature so people have safer, healthier places to live, work, and raise children. Now is the moment for EU leaders to listen to that voice and provide policy certainty and cement Europe’s position at the forefront of the clean economy — sending the clearest possible signal that the EU is ready to lead: for itself and for the world. 

Follow @Andrew Prag for updates on the latest EU policy developments and what they mean for business.