What Motivates Companies to Take the Decision to Decarbonise? ^†

Abstract

What motivates industrial companies to decarbonise? While climate policy has intensified, the specific factors driving corporate decisions remain underexplored. This article addresses that gap through a mixed-methods study combining qualitative insights from a leading automotive supplier with quantitative data from over 800 manufacturing companies in Germany. The study distinguishes between internal motivators—such as risk reduction, future-proofing, and competitive positioning—and external drivers like regulation, supply chain pressure, and investor expectations. Results show that internal economic logic is the strongest trigger: companies act more ambitiously when decarbonisation aligns with their strategic interests. Positive motivators outperform external drivers in both influence and impact on ambition levels. For instance, long-term cost risks were rated more relevant than reputational gains or regulatory compliance. The analysis also reveals how company size, energy intensity, and supply chain position shape motivation patterns. The findings suggest a new framing for climate policy: rather than relying solely on mandates, policies should strengthen intrinsic motivators. Aligning business interests with societal goals is not only possible—it is a pathway to more ambitious, resilient, and timely decarbonisation. By turning external pressure into internal logic, companies can move from compliance to leadership in the climate transition.

1. Introduction

1.1. Background

The COVID-19 pandemic brought many aspects of life to a standstill worldwide, yet its impact on emission levels was only temporary. Long-term atmospheric concentrations of greenhouse gases (GHG) were unaffected; in fact, emissions have continued to rise [1,2,3]. As large parts of the economy required rebuilding after the pandemic, this moment offered a unique opportunity to address structural weaknesses and prepare for emerging challenges. These included outdated or insufficient infrastructure, insecure and non-resilient energy systems, a lack of digitalisation across education, workplaces, public services, and industrial processes, as well as fragile supply chains. Vast recovery programmes incorporated environmental and resilience considerations [4,5]. However, amid tightened interim climate targets [6], heightened social expectations [7], and clear warnings from climate scientists, the Intergovernmental Panel on Climate Change (IPCC) underlined that “Urgent action [is] required to deal with increasing risks” [8]. The war in Ukraine and its implications for energy markets, price volatility, global supply chains, and geopolitical security concerns have further accelerated European ambitions to decrease dependency on fossil fuels. In response, policymakers across the EU have raised their goals for renewable energy deployment, energy efficiency, and even immediate demand reductions [9,10].

Yet, despite these developments, progress on energy efficiency remains slow. The Energy Efficiency Watch Survey (EEW4) [11] highlights that many stakeholders lack a compelling reason to decarbonise—especially one that resonates with their top priorities, such as jobs and competitiveness. This is particularly regrettable, as these topics are rated as highly important by a majority of stakeholders across the EU27. This underlines the need for a narrative that highlights benefits and cost savings—rather than relying on pure regulation forcing stakeholders to act. Identifying the relevant factors that may drive or motivate stakeholders thus becomes vital to plot this new narrative [11].

1.2. Existing Knowledge on Drivers and Motivators—And Where It Falls Short

A vast range of literature investigates factors that influence companies to adopt more climate-friendly or emissions-reducing measures. These studies typically distinguish between the drivers, motivators, and barriers. While barriers describe obstacles to action, they are not the focus of this paper. Instead, we concentrate on the factors that trigger or support the decision to decarbonise. In their review, Sousa Jabbour et al. [12] conclude that the most cited factors include political, regulatory, and governance measures, while technological and market factors are mentioned less often. Biresselioglu et al. [13] find that motivators prevail at higher levels of decision making—such as among policymakers and international energy providers—whereas they tend to be neglected at lower, individual levels. Other studies use empirical methods to assess the actual drivers of decarbonisation. Focusing on UK FTSE 100 companies, Okereke [14] identifies motivations such as financial gain, credibility, fiduciary duty, risk guidance, and ethical considerations. In contrast, drivers include energy prices, changes in the market, regulations and directives, investor demands, and technological change. Palsson and Kovács [15], Wong and Shahidi [16], and Boiral et al. [17] analyse decarbonisation across different sectors and geographies, including transport, construction, and manufacturing in countries such as Sweden, Australia, and Canada. They find that internal factors—such as company strategy or organisational culture—often outweigh external ones, such as stakeholder pressure or fear of penalty [15,16] and that companies committed to tackling climate change have better financial performance. Boiral et al. [17] argue that economic motivation is not the key factor behind a company’s commitment to reduce greenhouse gas (GHG) emissions, which is more strongly influenced by environmental and social concerns (internal).

The literature thus mainly identifies two determining factors that lead companies to take action on climate change—drivers and motivators. Okereke [14] (p. 479) defines motivators as factors that “arise more or less directly from the raison d’être of business to maximise profit […] [;] motivational factors on their own are capable of inciting corporations to undertake carbon management actions.” Drivers, by contrast, are described as “the factors that have the potential to ‘force’ corporations to take climate response action even when they would not have ordinarily wanted to do so”. While this conceptual distinction is useful, it remains unclear which specific factors fall into each category across different industrial sectors.

A number of studies examine motivations for advancing corporate sustainability (CS) [18,19], including how (low-cost) business models can benefit from it. Those studies identify normative motives—such as ecological and social responsibility—as key motivators for increased CS, followed by reputation and cost or risk management. Shareholder, political, and social pressure rank lowest. The benefits of CS range from implicit contracts that mitigate reputational risks and enable risk-sharing with suppliers, to strengthened leadership by motivating management and employees. However, these studies refer to corporate sustainability in a broader sense and are not explicitly linked to the specific topic of decarbonisation.

1.3. Identifying Drivers and Motivators for Decarbonisation: Plotting a New Narrative

The industrial sector plays a pivotal role in achieving climate goals: it accounted for 28.0% of final energy consumption, 18.4% of energy-related emissions, and 23.1% of Germany’s total greenhouse gas (GHG) emissions in 2019 [20,21,22]. Moreover, it shapes how products and components across all other sectors are designed, sourced, and manufactured—thus influencing their entire life cycle performance [23] (p. 2). Given this central role, it makes sense to examine more closely how manufacturing companies operate, decide, and act.

The number of companies pledging to comply with the Paris climate goals is steadily increasing, as are those that announce climate, carbon neutrality, or net-zero goals. What set of triggers leads these companies to take the decision to decarbonise in the first place? As pointed out by Buettner et al. [24] (p. 17), “the understanding […] which factors, besides regulation and carbon tax, play a role in the decision to decarbonise, is essential to tailor schemes and services appealing to these trigger points. Of similar relevance is the (relative) weighting of the individual factors.”

Recent announcements to become climate neutral (or carbon neutral) may initially be perceived as if environmental consciousness were the dominating motivation, but in fact, they often serve other underlying needs, intentions, values, or strategies—or result from external pressure. Establishing what these underlying factors are will help to (a) understand how companies that have not yet come forward with decarbonisation plans can be triggered to do so and (b) inform supporting bodies on how and where they can help best.

To address this, the article aims to identify drivers and motivators that potentially influence such decisions. As explained in the literature review, drivers can be understood as mainly external pressure points that indirectly trigger—or sometimes even force—companies to take action. Motivators, on the other hand, are internal considerations, ranging from purely business-oriented, profit-maximising concerns to more abstract, value-based determinants. Experiencing pressure—whether originating from a driver or a motivator—can positively or negatively affect an underlying need, value, or ethical position of the responsible actor or the parameters by which their performance is evaluated. Since key contributions by scholars such as Okereke [14] were published, more than a decade has passed. Economic conditions, environmental pressures, and business culture have evolved, necessitating re-examination.

Our interest lies in exploring how companies respond to these internal and external pressures, and how such responses can be harnessed to support both corporate and societal goals. This includes understanding what influences the internal calculus of a company’s leadership: what core needs, values, risks, ambitions, priorities or constraints shape their reasoning? The challenge is not merely to identify abstract categories but to locate the concrete factors that move companies from inertia to action.

Identifying effective triggers is hence essential to leverage the fundamental logic of doing business: the pursuit of profit. Profit results from the difference between income (revenue) and expenditure (costs), which is influenced by internal and external actions and decisions (positively or negatively). Companies reflect these dynamics in a “profit function,” aiming to optimise the constellation of decisions that maximise profit [25] (pp. 23–26). As these conditions change, this optimal constellation becomes a moving target, requiring continuous adjustment.

The state—or other actors—may intervene in this pursuit of profit when entrepreneurial actions cause societal harm, by shifting the underlying framework conditions [25] (pp. 432–439). This can occur by increasing or decreasing revenue expectations (shifting the revenue function), or by raising or lowering associated costs or risks (shifting the cost function). Ideally, such interventions align corporate behaviour with socially and ecologically desirable outcomes. If this alignment succeeds, behaviour is adjusted intrinsically. If not, measures may be perceived as externally “motivated” (= imposed) and met with reluctance, requiring enforcement. To avoid inefficiencies, it is crucial to identify factors that lead to self-motivated (intrinsically motivated) decarbonisation.

This raises the following question: which ingredients help shift a company’s profit function toward the societally desired trajectory of climate neutrality? These ingredients—and their relative shifting intensity—likely vary across companies.

Hence, building on a 2021 ECEEE conference paper [26], this article aims to close the identified gap by investigating which specific factors (= pressure points) motivate manufacturing companies to decarbonise, and how these can be categorised as drivers or motivators. To ensure the broad applicability of findings and explore differences between company types, a quantitative component is essential that assesses the ranking and relative importance of motivators across company sizes, sectors, and energy intensities.

In summary, understanding the underlying needs, values, and business considerations—as well as external pressures—makes it possible to trigger company responses that both meet business needs and serve societally desired outcomes. “Change through anticipative steering” (#CTAS) [27] builds on this logic by identifying pressure points (drivers) and subtle triggers (motivators).

1.4. Research Objectives, Approach, and Article Structure

A strong and convincing narrative that breaks the ice from the entrepreneurial perspective—by activating the intrinsic wish to decarbonise (internal ambition) and enabling external actors to trigger this wish (external pressures)—is crucial. This is especially relevant given the limited uptake of decarbonisation and rising risks from volatile energy prices, supply insecurity, and emissions costs.

Moreover, evidence shows that intrinsic motivators lead to higher ambition levels than external drivers. Policies that strengthen motivators may therefore yield better outcomes than those relying solely on external pressure.

This paper makes two main contributions: (1) it identifies effective triggers for decarbonisation, and (2) it explores how understanding these triggers can improve the way decarbonisation and its business benefits are communicated to companies and their stakeholders. The overarching question resulting from this is: What motivates companies to decarbonise? To answer this, the following research questions are explored:

• Why do companies pledge to decarbonise?
• What factors potentially influence their decision?
• What are the key pressure points for decarbonisation?
• How do these pressure points lead to action?
• Is environmental consciousness the real motivator—or are other factors more influential?
• Which triggers are most effective in fostering self-motivated, high-ambition decarbonisation?

The remainder of this paper is structured as follows: Section 2 outlines the methodology and data. Section 3 presents a qualitative case study from the manufacturing sector and a quantitative assessment based on the Energy Efficiency Index of German Industry. Section 4 discusses the findings, and Section 5 concludes with implications and future research directions.

In doing so, this paper contributes to a deeper understanding of how companies can be encouraged to intrinsically embed sustainability into their decision-making logic—not as an obligation imposed from outside, but as something they want to do and see as aligned with their own priorities and success metrics. This also supports broader societal goals, particularly SDGs 9 (Industry, Innovation and Infrastructure), 11 (Sustainable Cities and Communities), and 13 (Climate Action) [28].

2. Methodology

This study follows a sequential exploratory approach, combining qualitative insights with a structured quantitative survey. It aims to identify key factors that motivate or drive manufacturing companies to decarbonise and to assess their relative importance across different company profiles (including company size, sector, energy intensity, supply chain position, and specific decision-making determinants).

2.1. Qualitative Foundations

The qualitative component is based on participatory observations from professional engagements with German manufacturers on energy efficiency and decarbonisation, as well as publicly available sources (e.g., climate pledges, media coverage, corporate statements). The automotive sector—particularly Bosch—served as a focal point, given its influential role within German industry and its strategic relevance for broader decarbonisation discourse. Emerging patterns and themes were used to guide the design and interpretation of the quantitative analysis.

2.2. Quantitative Survey and Dataset

The quantitative part draws on data from the Energy Efficiency Index of German Industry (EEI), introduced in 2013. The EEI captures expectations, intentions, and observations from companies across 27 manufacturing sectors. Its methodology is based on the German ifo business climate index [29]. This article focuses on the first data collection round of 2020 (May), which addressed motivations, priorities, and planned actions concerning decarbonisation. The survey was conducted during the first wave of COVID-19 in Germany, shortly after major climate policy announcements by the UN, the EU, and Germany [30,31,32,33]. A total of 864 responses were collected via a structured quantitative survey, administered through two channels—93% by telephone and 7% online. The questionnaire comprised 18 items, including questions on company size, energy consumption, revenue, and sector affiliation. Due to data sensitivity, some participants skipped individual questions; hence, response numbers vary by item.

In 2019, Germany’s 674,000 manufacturing companies generated a total revenue of nearly 3.43 trillion euros and employed approximately 11.6 million people. Of these, around 198,000 companies belong to the subsectors covered by the EEI survey [34].

2.3. Sample Composition

The EEI aims for balanced representation across company sizes (as defined by the European Commission [35]) instead of following the actual size distribution of manufacturing enterprises in Germany [34]. As explained by Buettner et al. [24] (pp. 3–4), this allows us to make statements on all company sizes.

Table 1. Sample composition by company size (n = 845).

Company Size	Number of Employees	Revenue in Million EUR	Total Population (N)	Observations (n)	Percentage of Sample
Micro	0–9	≤ 2	124,904	186	22.0%
Small	10–49	> 2 to ≤ 10	52,282	228	27.0%
Medium	50–249	> 10 to ≤ 50	15,282	248	29.3%
Large	> 249	> 50	5300	183	21.7%
Total			197,768	845	100.0%

provides the breakdown.

2.4. Sectoral Distribution

The survey targeted “core industries”, aiming for at least 24 responses per focus sector. “Core industries” refer to the eleven sectors with the greatest economic weight in Germany. Their corresponding NACE codes are listed in brackets (sorted by code): leather—(15), wood and cork—(16), paper—(17), chemical—(20), rubber and plastics—(22), non-metallic minerals—(23), basic metals—(24), fabricated metals—(25), electrical equipment—(27), machinery and equipment—(28), and motor vehicle (29) industries. Only sectors with at least 20 relevant answers are included in the sectoral analysis. Small and micro sectors are included if participation thresholds are met [24] (p. 4). The sector classification follows the German implementation of NACE Rev. 2, in alignment with international standards [24,36,37,38].

Table 2. Sample composition by sector (n = 864).

NACE Code	Sector	Total Population (N)	Observations (n)	Percentage n (N)
05 **	Mining of coal and lignite	~	8	~
06 **	Extraction of crude petroleum and natural gas	5	13	260.0%
08	Other mining and quarrying	1438	12	0.8%
10	Manufacture of food products	26,897	31	0.1%
11	Manufacture of beverages	2435	19	0.8%
12	Manufacture of tobacco products	62	8	12.9%
13	Manufacture of textiles	4637	18	0.4%
14	Manufacture of wearing apparel	3306	14	0.4%
15	Manufacture of leather and related products	1371	34	2.5%
16	Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials	12,944	39	0.3%
17	Manufacture of paper and paper products	1558	53	3.4%
18	Printing and reproduction of recorded media	10,986	24	0.2%
19	Manufacture of coke and refined petroleum products	89	13	14.6%
20	Manufacture of chemicals and chemical products	3280	48	1.5%
21	Manufacture of basic pharmaceutical products and pharmaceutical preparations	554	26	4.7%
22	Manufacture of rubber and plastic products	7090	64	0.9%
23	Manufacture of other non-metallic mineral products	9908	44	0.4%
24	Manufacture of basic metals	2374	42	1.8%
25	Manufacture of fabricated metal products, except machinery and equipment	44,106	64	0.1%
26	Manufacture of computer, electronic, and optical products	7935	21	0.3%
27	Manufacture of electrical equipment	6036	67	1.1%
28	Manufacture of machinery and equipment n.e.c.	15,964	72	0.5%
29	Manufacture of motor vehicles, trailers, and semi-trailers	2769	49	1.8%
30	Manufacture of other transport equipment	1276	15	1.2%
31	Manufacture of furniture	10,826	29	0.3%
32	Other manufacturing	19,985	30	0.2%
99	Other		7
	Total	197,831	864	0.4%

** micro sector (N < 10) with at least 50% of N participating, ~ figures not disclosed in official statistic due to small sector size and associated confidentiality issues.

provides an overview of sectoral participation.

In some micro sectors, the reported number of responses may exceed the number of registered companies. This occurs when companies answered on behalf of specific production sites rather than the enterprise as a whole—an option provided in the survey. In the crude petroleum and natural gas sector (06) where this is the case, all 13 responses refer to one specific site.

2.5. Energy Intensity Clusters

Energy intensity (in Wh/EUR) was calculated based on self-reported data on energy use (in MWh) and revenue (in EUR million). Companies that disclosed both data points were grouped into five energy intensity classes [24] (p. 4). The lower a company’s energy intensity class, the higher its energy productivity, and vice versa. A key measure for raising energy productivity is increasing energy efficiency [24].

Table 3. Sample composition by energy intensity (n = 656).

Energy Intensity Class	Energy Intensity Interval (in Wh/EUR)	Observations	Percentage
not energy intensive	0 to < 10	151	23.0%
less energy intensive	10 to < 100	243	37.0%
moderately energy intensive	100 to < 1000	198	30.2%
energy intensive	1000 to < 10,000	44	6.7%
very energy intensive	≥ 10,000	20	3.1%
Total		656	100.0%

summarises the distribution (n = 656):

The combined dimensions of company size, sector affiliation, and energy intensity enable a differentiated analysis of motivational factors across varying industrial profiles. These will be explored in detail in Section 3.2.

3. Results

Building on the methodology presented in Section 2, this section explores the internal perspective: Why do companies voluntarily choose to decarbonise—even in the absence of binding regulations? Which strategic considerations shape their decisions, and how do they frame climate action in light of risk, competitiveness, and opportunity? To illustrate these dimensions in depth, we draw on the case of Bosch, one of the first global industrial companies to publicly commit to carbon neutrality by 2020 [39]. Bosch’s approach offers a rich example of how multiple (assumed) strategic motivations—ranging from reputational positioning to economic rationality—can align in favour of early climate action.

Section 3.1 synthesises empirical and analytical insights derived from Bosch’s case and broader industry trends, while Section 3.2 turns to structured survey results from the Energy Efficiency Index of German Industry (EEI) to assess which motivations companies actually report. Together, these two parts offer a comprehensive view of the motivational landscape in industrial decarbonisation.

3.1. Strategic Motivation and Perceived Benefits—A Qualitative Perspective

On 9 May 2019, Bosch announced its goal to become carbon neutral by 2020—securing, according to its press statement, the “earliest carbon neutrality of any global industrial enterprise” [39]. The pledge appeared to come out of the blue, yet it coincided with a highly dynamic period: just ahead of the European Parliament elections (23–26 May 2019), which saw a landslide gain for the Greens; shortly before the UN Climate Summit in New York (23 September 2019), where multiple stakeholders made new pledges; and in the midst of peak momentum for the Fridays for Future movement, followed by the European Green Deal announcement on 11 December 2019 [33].

Bosch’s initiative, described as “unprecedented in scope and timeframe” [39], positioned the company as a frontrunner on an issue of rising societal urgency. As Bosch is majority-owned by the charitable Robert Bosch Foundation, (displaying) its leadership also resonated with the company’s value base. The announcement came less than a year after the IPCC Special Report on 1.5 °C, which called for urgent action to avoid irreversible climate damage (8 October 2018) [40].

This section explores how such strategic climate action can emerge before it becomes a trend—drawing on Bosch as a real-world example to examine perceived motivations, strategic considerations, and expected benefits. These qualitative insights help illuminate why companies may act voluntarily, before turning to self-reported motivations from a broader industry sample in Section 3.2.

3.1.1. Framing Decarbonisation as Opportunity and Leadership

Early adopters (i.e., of ambitious climate targets) face considerable risk—but also reap significant strategic benefits. One of the most prominent is the first-mover advantage, which includes shaping the narrative and securing near-exclusive publicity. Companies that take visible early action can become synonymous with the trend they help establish. In technology history, brand names such as the Walkman (Sony), Hoover (vacuum cleaner), Xerox (photocopier), and even the verb to Google illustrate this phenomenon of narrative ownership [41,42].

In the context of industrial decarbonisation, Bosch’s early pledge to reach carbon neutrality by 2020 exemplifies this logic. However, being first is not enough—success lies in setting new standards. Apple, for instance, was not the first to launch touchscreen smartphones, but redefined the category through superior design and usability [43]. Similarly, strategic communication plays a key role; early leaders gain unshared visibility, while later adopters receive diminishing attention.

For companies, such leadership signals more than commitment—it demonstrates control over disruption, willingness to innovate, and long-term viability. For Bosch, a globally active supplier operating in the heavily disrupted automotive sector, such future-proofing is of strategic importance. The ability to innovate and taking a lead imposes significant pressure on all immediate competitors. Industry history underscores the stakes: Nokia lost its global market leadership in just a few years after failing to adapt to smartphones [44].

Decarbonisation is also a lever for employer branding. Amid an ongoing shortage of skilled labour, climate consciousness and innovation signal purpose and stability. The Ifo Institute reports that every second company is already affected by labour scarcity, with a worsening trend [45]. As highlighted by McKinsey and YouGov studies [46,47], especially younger and qualified applicants seek out companies that appear innovative, future-proof, and act responsibly and proactively on climate issues. Companies that lead here gain an edge in recruiting talent.

Finally, reputational positioning in decarbonisation interacts with customer expectations and supply chain dynamics. Large brands and OEMs (Original Equipment Manufacturers) exert enormous influence over their suppliers—defining (environmental performance) standards and specifications and often enforcing them through procurement requirements. Unless it is a very specific niche product, such market power also comes along with significant price pressure (for instance, milk prices secured by large supermarket chains). For many suppliers, staying ahead of the curve is essential to avoid reactive, externally imposed change. Bosch and Continental, for instance, were already taking proactive steps, while automotive clients, like Daimler and Volkswagen, began raising demands on their upstream partners [48]. Here, the line between driver and motivator becomes thin: anticipating pressure becomes a form of resilience. The supply chain aspect, in combination with client expectations (and regulatory requirements), makes the situation particularly complex in, for instance, the automotive industry.

3.1.2. Structural Interdependencies in the Automotive Sector

Following the Diesel scandal, many automotive manufacturers and suppliers pledged climate targets and shifted their portfolios towards electric vehicles. Combustion engine vehicles face inherent emissions from fossil fuels, particularly harmful particulates from diesel engines. In contrast, electric vehicles shift the environmental impact upstream: battery production, especially for large battery ranges, requires substantial amounts of lithium and other rare earths, whose extraction causes severe environmental damage [49]. This contradiction sparked public criticism, especially as companies focused on Scope 1 (on-site emissions) and Scope 2 (emissions associated with the energy purchased) emissions under their direct control, while ignoring embedded impacts upstream in the value chain (part of Scope 3). Scope 3 emissions are indirect emissions of the up- and downstream supply chains (excluding indirect emissions arising from the generation of energy purchased, which are Scope 2), as well as for instance commute, waste, and business travel [50,51].

A strategic response came from Volkswagen, announcing that its mass-market electric vehicle ID.3 would be (net) carbon neutral at the point of handover [52]. To appreciate the significance, one must consider the low production depth of modern vehicle manufacturing. Car manufacturers often conduct only final assembly, design, testing, and painting—amounting to roughly 15% of the total product carbon footprint. Of this, about two-thirds are Scope 2, and one-third Scope 1 emissions [53] (p. 9). The remaining 85% of the emissions arise upstream in the vast supply chain [54] (p. 6).

This imbalance creates a strong incentive for carmakers to shift the carbon burden onto suppliers. Although initial neutrality is often achieved via compensation (i.e., the purchase of carbon credits) [55,56,57], manufacturers increasingly transfer responsibility through procurement requirements and climate certification schemes. Volkswagen’s climate strategy, for instance, includes contractual obligations for suppliers and certified emission reductions (i.e., via climate protection projects) [52].

The same logic applies down the supply chain. Large companies, such as Bosch, proactively decarbonised their operations early on. Many smaller suppliers, however, face structural hurdles: (a) limited capacity, knowledge, or investment capital; (b) uncertainty about the future of their product range in light of sectoral transformation; and (c) the impossibility to act (on their production machinery and associated processes) until clients clarify their own specifications and needs [48,58]. As pointed out by Buettner et al. [24] (pp. 16–17), smaller and energy-intensive companies require targeted support due to their disproportionately large process-related footprints.

In sum, decarbonisation in automotive supply chains is shaped by structural interdependencies. Strategic decisions by OEMs cascade through tiers of suppliers, often long before binding regulation takes effect (i.e., demands by clients to present them figures for their CSR reports) [59]. While frontrunners can prepare and lead, many smaller companies risk marginalisation without clarity, resources, or coordination mechanisms.

3.1.3. Competitive Pressure and Regulatory Spillovers Beyond Europe

Regulatory frameworks, like the EU Emission Trading System (EU ETS) and Germany’s national carbon pricing, apply only within their jurisdictions—but their impact reaches far beyond. The EU ETS targets selected energy-intensive sectors and power generation, while Germany’s national carbon price applies to emissions not covered by the EU ETS—but only within German territory. Both schemes include exemptions for vulnerable sectors to prevent carbon leakage, i.e., the relocation of emissions-intensive activities abroad without net global reduction [60,61,62,63,64].

Nonetheless, indirect pressure arises for companies outside these regions—especially in export-heavy sectors—through mechanisms like the Carbon Border Adjustment Mechanism (CBAM). Under CBAM, products imported into the EU may face a levy aligned with the EU carbon price, based on their product carbon footprint (PCF) [64,65,66,67,68]. The product carbon footprint (PCF) “represents the sum of all carbon dioxide emissions (measured in CO₂) and greenhouse gas emissions (measured in CO₂ equivalents, CO₂-eq) caused directly and indirectly by […] a product […] over a defined period of time or over its life cycle.” [68]. Even in the absence of formal emission pricing, companies exporting to regions with CBAMs may incur equivalent costs, effectively closing regulatory loopholes. Additionally, downstream clients increasingly require lower or net-zero PCFs as procurement criteria—further amplifying the pressure [52].

While regulatory schemes formally apply only within specific jurisdictions, their effects extend globally. This dynamic creates regulatory and strategic spillovers beyond legal borders, which can be grouped into four main mechanisms:

First, the number of countries and regions implementing carbon pricing schemes continues to grow. According to the World Bank, these covered 22.3% of global greenhouse gas emissions in 2020—about 8 percentage points more than in 2019—and rose to 23.11% by September 2022 [69]. Among them is China, the world’s largest emitter, which launched a national carbon pricing scheme in 2021 [70]. While stringency and enforcement vary, such schemes raise expectations across markets. Even if a global carbon market—advocated by U.S. climate envoy John Kerry—remains elusive [71], the expansion of carbon pricing and tools like the EU’s Carbon Border Adjustment Mechanism (CBAM) [64,65,66,67] reduce scope for regulatory arbitrage. The EU ETS before its 2017 reform [72] also illustrates: coverage alone is not enough—price levels, design, and enforcement matter.

Second, companies from regions with strong societal and legal climate expectations face reputational risks if they apply double standards. Adhering to high environmental norms in their home markets but neglecting them elsewhere may trigger backlash and consumer boycotts. A prominent example is Siemens, which faced a PR disaster in early 2020 related to its delivery of railway signal systems for a new coal mine project in Australia. Although rail transport is generally viewed as environmentally friendly, Siemens was criticised for enabling infrastructure linked to coal extraction—prompting calls for boycott despite the company’s sustainability pledges at home [73,74]. Moreover, regulatory frameworks like Germany’s supply chain law and the EU’s forthcoming supply chain regulation further tighten compliance expectations [75,76,77].

Third, strict environmental standards in economically significant regions often lead to widespread adoption—even beyond legal boundaries. This is because applying divergent standards simultaneously tends to be inefficient: (a) it undermines economies of scale by increasing production and procurement costs, and (b) it generally proves viable only for a limited time before market expectations converge around the higher benchmark. A striking example is California, whose stringent vehicle emissions standards—initially affecting a population of around 80 million—eventually shaped the regulatory baseline for the entire U.S. market of over 330 million people. This dynamic, often referred to as the “California effect,” highlights how ambitious policies in key markets can redefine global expectations and norms [78,79].

Fourth, global procurement practices reinforce such regulatory spillovers. OEMs increasingly demand climate commitments throughout their supply chains, regardless of manufacturing location. Unless a supplier offers a highly specialised or niche product, the client usually determines the procurement criteria, including environmental performance. Suppliers unable to meet these expectations may be replaced by more aligned competitors. As sustainability requirements are integrated into procurement and supply contracts, late adopters may struggle to pass rising transition costs onto customers.

• Ultimately, even when carbon pricing or adjustment schemes do not (yet) apply to a supplier’s manufacturing location, decarbonisation may still be required if the OEM at the top of the value chain commits to delivering a net-zero or climate-neutral product at the point of handover. In such cases, climate targets are operationalised through procurement rules, creating quasi-global standards that suppliers must meet—regardless of geography—if they wish to remain in the chain.

3.1.4. Strategic Support vs. Enforcement: The Role of Client Companies

Against this backdrop, the following key question arises: are suppliers actively supported in their transition—or merely expected to comply? On one hand, decarbonisation networks and capacity-building initiatives can accelerate change. These collaborative efforts provide guidance, knowledge sharing and help reduce the time during which OEMs must offset residual emissions. On the other hand, contractual requirements in progressively renewed supply contracts can enforce emission reductions in upstream products. While effective for OEMs aiming to decarbonise their value chains, such measures place the burden of adjustment—and the associated risks—entirely on the supplier.

The approach taken—support-oriented vs. compliance-driven—significantly impacts the speed, depth, and fairness of industrial decarbonisation. Particularly for smaller or regionally anchored suppliers, the difference may determine whether transformation is enabled or marginalisation accelerated.

While the example discussed above focuses on the automotive sector, the dynamics described are relevant across industries—especially in globalised markets with everyday products. Results from the second data collection of the Energy Efficiency Index of German Industry (EEI) in 2021 illustrate that in the computer and electronics sector (sector 26), 60% of companies impose climate-related requirements in supply contracts, and 64% report receiving such requirements from their clients (across all sectors: 38% and 32%). In the manufacture of metal products sector (25), 39% collaborate with suppliers through decarbonisation networks, while 42% are involved in similar networks with their own clients (all sectors: 26% and 22%) [80].

3.1.5. Financial Access, CSR Reporting, and Regulatory Framing

Most companies rely on external capital—loans or long-term investments—to establish or transform operations. As discussed in more detail in Section 4.1, staying attractive to investors has become a critical concern, especially as non-future-proof business models are increasingly avoided. Around the time of the 2015 Paris Climate Conference (COP21), 100 banks and long-term investors managing approximately USD 4 trillion voluntarily signed the Energy Efficiency Financing Principles of G20 participating countries and UNEP’s Principles for Responsible Investment [81].

Since then, the share of global investors placing high(er) emphasis on sustainability has grown significantly [82]. This shift is reinforced by two key EU policy instruments:

(1)

the EU taxonomy regulation (EU 2020/852), which defines criteria for sustainable economic activities and thereby facilitates green finance towards the European Green Deal [83]; and

(2)

the Non-Financial Reporting Directive (2014/95/EU), which mandates large companies to regularly disclose social and environmental impacts [59].

Even though formally “non-financial,” such reporting is increasingly viewed as essential by corporate sustainability and energy managers. Interviews with two companies in 2020 revealed that CSR reports are seen as indispensable tools to demonstrate credibility and remain investable. Wang and Buettner [84] further show how sustainability key performance indicators (KPIs) embedded in CSR frameworks can serve as catalysts for long-term corporate transformation. At the time of data collection and interviews, the Non-Financial Reporting Directive (2014/95/EU) formed the relevant regulatory framework. It has since been replaced by the Corporate Sustainability Reporting Directive (CSRD, 2022/2464/EU), which expands the scope and detail of mandatory sustainability disclosures kicking in for reports published in 2025 (on the 2024 financial year) [59,85]. To boost competitiveness of struggling EU businesses, the EU has adopted the “omnibus package” in February 2025 to simplify EU rules and to “ensure that reporting requirements on large companies do not burden smaller companies in their value chains” [59,86]. Although the regulatory pressure has been partially eased, the indirect, non-regulatory mechanisms—particularly those related to investor expectations and supply chain dynamics—remain firmly in place.

3.1.6. Economic Rationality—The Most Immediate and Powerful Motivation

Bosch committed to investing EUR 2 billion by 2030 to become (net) carbon neutral by 2020—achieving this target within just 20 months [39]. According to the company, however, the real cost will only be about EUR 1 billion in 2030 due to savings achieved through efficiency gains and related cost-reducing interventions. The transition unfolded in phases: after assessing the emissions baseline and (structural) reduction potential, Bosch switched all economically feasible energy sources to sustainable alternatives and offset remaining emissions via carbon credits.

Initially, compensation covered a larger share, as technical interventions—such as energy efficiency upgrades, on-site renewable energy, and storage systems—require time for planning, approval, and implementation. Over time, these measures increase efficiency and thus reduce external demand: less energy must be purchased, and fewer certificates are needed. This dynamic means that neutrality is reached almost immediately, while the underlying cost structure improves progressively.

The tipping point comes when efficiency upgrades and local generation exceed their upfront investment through recurring savings. The higher energy or emission prices rise, the faster this breakeven is reached. According to a Bosch representative interviewed in October 2023, this point was achieved far earlier than anticipated. Due to the surge in energy prices following the Ukraine war, the introduction of Germany’s national carbon pricing scheme [62], and rising EU ETS prices [87], Bosch had already recovered the full EUR 2 billion in avoided costs—effectively exceeding its initial return expectations twofold within just a few years.

Beyond reducing emissions, companies can benefit economically by vertically internalising parts of the energy value chain—shifting from merely paying for supply and security to generating, procuring, and managing energy in-house. This means costs otherwise spent on transmission, supplier margins, and external procurement can be retained within the company’s balance sheet—reducing dependency and strengthening resilience.

At first glance, decarbonisation may seem straightforward: switch to a green (or blue) tariff and offset residual emissions. However, the reality is more complex. In 2019, 43% of German electricity came from renewables, yet the industrial sector alone accounted for 46% of national electricity consumption [88,89]. Without even considering additional demand from e-mobility, electrification, or green hydrogen (to decarbonise industrial processes), this suggests that decarbonising industry alone would surpass available renewable supply. EEI data [30,90] indicate that industrial demand for green electricity could require a 25% increase in renewable generation (compared to 2019 figures) by 2025—just to meet declared ambitions.

Such overshoot typically leads to sharp price increases (as seen during the 2021 Texas blackout [91]) or restricted access to green tariffs for new clients. More critically, if companies secure themselves most of the available green electricity, the GHG footprint of standard tariffs worsens—turning decarbonisation into a societal zero-sum game unless additional renewable capacity is created.

The same applies to carbon compensation: quality certificates may become scarce and expensive. Moreover, reputational risks grow if poorly vetted schemes are used—such as planting trees where rainforest was previously cleared, overpromising permanence, protecting areas that were never actually under threat [92], or relying on unverifiable baseline calculations [93,94].

The steep increase in the European ETS price—from around EUR 25 per tonne of CO₂ equivalent in October 2020 to approximately EUR 75 in September 2022 [87]—following the EU’s tightened 2030 climate target (from 40% to 55% reduction compared to 1990 levels), the introduction of Germany’s national carbon price in January 2021, and growing concerns that ETS allowances may become subject to financial speculation [95], all underscore the risk of relying solely on compensation or green tariffs. What appears simple may backfire—through cost volatility, limited availability, or reputational damage.

Timely action—whether through early acquisition and long-term contracts, efficiency upgrades, or self-generation—helps companies decouple from rising costs and supply shocks by regaining control over energy and emissions-related risks. As a result, payments to external parties decrease. The more companies decarbonise locally or secure favourable contracts early, the more effectively they shield themselves. Moreover, the higher energy and emission prices rise, the greater the cost of inaction becomes—and the faster proactive measures pay off.

3.1.7. Self-Initiated Compensation and Systemic Alternatives

Instead of purchasing emission certificates or relying on volatile markets for ETS allowances and compensation schemes, manufacturers may explore setting up their own offsetting initiatives. Particularly for companies producing energy-consuming goods, internalising such compensation activities could reduce exposure to price fluctuations, public scrutiny, and availability risks.

This logic draws inspiration from energy efficiency obligation schemes, where energy providers are required to deliver a set percentage of efficiency improvements each year. One common approach involves scrappage schemes—offering customers rebates for replacing inefficient appliances (e.g., fridges) with more efficient models. The energy provider can then claim the avoided energy use as part of its obligation [96]. Typically, providers offer a small range of replacement products, enabling bulk purchasing, lowering acquisition costs, and thereby reducing the net cost of the scrappage scheme.

While transferring this concept to manufacturers may require regulatory clarification, similar mechanisms could apply. A company might launch its own scrappage initiative—replacing older products with more efficient versions from its own portfolio.

This could enable emission reductions, improve customer loyalty, enhance end-use efficiency, lower costs compared to external solutions, and leverage economies of scale in procurement and logistics. Alternatively, products could be integrated into external, aid-based compensation projects—yielding reputational benefits and contributing to climate goals more tangibly than abstract offsetting alone.

As described, optimising energy consumption, internalising value creation, and generating energy on-site—in short: taking local decarbonisation action—reduces costs and vulnerability to external shocks, while enhancing energy productivity, competitiveness, and the company’s long-term stability.

Successfully reaching (net) carbon neutrality equips a company with detailed insights into what works, what does not, and what should be done differently next time. In the language of human resources, such experience builds highly specific human capital. Even after achieving neutrality, the decarbonisation strategy will continue to evolve. However, the expertise gained can become a new business asset—by supporting others on their path, as Bosch now does through its spin-off, Bosch Climate Solutions.

3.1.8. Strategic Timing and External Catalysts

What many strategic announcements have in common is the importance of timing. So why did Bosch choose to declare its goal of achieving net carbon neutrality by 2020 when it did—and what motivations might have influenced this decision? While the true rationale is only known to those directly involved, several factors appear to have played a role—some possibly, some plausibly, and others explicitly acknowledged by Bosch.

On 23 May 2019, exactly two weeks after the neutrality pledge, it was announced that Bosch would be fined EUR 90 million for its role in the Diesel scandal [97]. Regulatory investigations typically span many months, often years, suggesting that Bosch likely anticipated an impending penalty. By acting pre-emptively—announcing bold climate action before the fine became public—Bosch was able to seize the narrative. As various examples show, companies that promise reform before being found guilty appear more credible and forward-thinking than those that do so after [98].

This highlights a broader pattern: major organisational change is often driven by exogenous shocks or disruptions [99]. The Diesel scandal likely played a catalytic role for Bosch—just as it did for Volkswagen with its dozen brands, which may not have pursued such a radical transformation towards e-mobility and carbon-neutral vehicles (at the point of handover) without having been at the centre of the scandal [98,100]. Whether these measures were taken to pre-empt external pressure before it fully unfolded—or to reduce such pressure early on—can ultimately only be answered by those directly involved.

Declaring a climate-neutral strategy can stem from a single trigger—or more often, a combination of pressure points. The preceding analysis has uncovered a wide array of such drivers, drawing from diverse disciplines, practical observations, personal conversations, and media reporting.

The next section therefore takes a closer look at what companies themselves are willing to disclose about their true motivations to reduce their greenhouse gas (GHG) emissions.

3.2. Self-Reported Motivation—A Quantitative Perspective

In the first iteration of the Energy Efficiency Index of German Industry (EEI) in 2020 [30], companies were asked to identify (up to) three key factors that most strongly motivate them to reduce their greenhouse gas emissions.

The seven predefined response options were derived from the strategic dimensions discussed in Section 3.1—including market dynamics, regulatory expectations, economic logic, and reputational positioning—but condensed to suit a phone-based survey format. The response options were as follows:

• customer requirements,
• investor requirements,
• government requirements,
• image improvement (e.g., attracting skilled labour or displaying leadership),
• corporate social responsibility (CSR),
• long-term economic advantages, and
• reduction of cost risks.

Some of these factors can be classified as external drivers (e.g., customer, investor, and government requirements, as well as cost risks), while others act more as internal motivators, such as long-term economic benefits, image enhancement, and CSR.

More than half (56%) of participating companies identified long-term economic advantages among their top three motivators for reducing greenhouse gas (GHG) emissions. For nearly one-quarter (23%), it was even their primary motivator (cf. Figure 1). Across the sample, no other factor was chosen as frequently as a first, second, or third priority.

This prominence is unsurprising, as many emissions reduction measures come with side benefits: improved efficiency, lower operational costs, and reduced expenses related to carbon pricing. These effects influence overall production costs and, ultimately, competitiveness. Financially, decarbonisation often pays off—both through tangible savings and softer benefits like aligning with sustainability trends.

Importantly, these economic advantages also reduce exposure to cost risks. For 19% of companies, this was the top motivator. Lower external energy demand and reduced emissions cushion the impact of volatile energy and carbon prices. Altogether, 48% of companies included cost-risk reduction among their top three motivators.

Interestingly, corporate social responsibility (CSR)—often considered a “soft” factor—emerged as the primary motivator for 20% of respondents and ranked among the top three for 45%. This indicates that notions of responsibility and reputation already carry weight in the industrial sector.

That said, how genuine such motivations are—compared to those rooted in economic or risk-based logic—can only be assessed by evaluating the actual measures taken and their impact, not merely the intentions or targets announced.

Although customer requirements rank as the fourth most frequently cited primary motivator (13%), they trail noticeably behind the top three: long-term economic advantages (23%), CSR (20%), and cost risk reduction (19%). When looking at the top three motivators in aggregate, customer requirements (33%) also fall behind image improvement (36%).

A comparison of these two factors reveals an interesting pattern: the proportion of companies selecting customer requirements increases steadily across third (8%), second (12%), and first (13%) priority. For image improvement, the trend is reversed—its share decreases with higher prioritisation. This suggests that the image impact of decarbonisation efforts is an important consideration for many companies, but less frequently the primary driver. Its consistent presence among the top three nonetheless underlines its strategic relevance—particularly when paired with other motivators.

This pattern also aligns with the response structure for long-term economic advantages (15% as third priority) and cost risk reduction (14%), reinforcing the interpretation that image concerns often act as complementary, not primary, drivers.

For customer requirements, the data may imply that companies motivated by decarbonisation for client satisfaction [101] are more likely to prioritise it when reputational considerations (i.e., image improvement) also rank high on their agenda.

Government requirements motivate fewer than one in three companies (29%), suggesting that most other factors exert a stronger influence on decarbonisation efforts. Investor requirements are listed as a top motivator by just 16% of companies. However, this figure may vary depending on capital structures. Companies with greater reliance on long-term investors—such as publicly owned or capital-intensive companies—are likely more sensitive to investor expectations. A closer look at the data supports this: for medium-sized companies, investor pressure is cited as the primary motivator 50% more often than average (9% vs. 6%).

The relevance of investor-driven motivations has likely grown since the time of data collection, driven by the rise of ESG investments (Environmental, Social, and Governance), growing shareholder pressure, and the desire to remain “investable”. The same likely holds true for the reduction of cost risks, which has gained importance amid the recent energy crisis. At the same time, however, studies by the Federation of German Industries (BDI) and the German Economic Institute (IW) suggest that the crisis has also led companies to postpone green investments—a paradox, given that companies delaying decarbonisation remain more strongly exposed in absolute terms to energy and carbon price volatility [102].

From a broader perspective, intrinsic motivators—particularly long-term economic benefits—emerge as the most relevant drivers behind companies’ decisions to reduce their GHG emissions. In contrast, purely external pressures tend to rank lower. This aligns with earlier literature suggesting that internal motivation often outweighs external pressure when it comes to climate action [15,16,17]. These findings imply that strategies aimed at triggering intrinsic motivation may lead to higher engagement—and potentially better outcomes—than those relying solely on external ‘force’.

However, this study diverges from the findings of Boiral et al. [17], who suggested that economic considerations are generally secondary to environmental and social concerns (with the exception of micro companies). In our sample, long-term economic advantages ranked highest. Moreover, cost-risk reduction emerged as a stronger motivator than image improvement—differing from earlier studies in which reputation played a more prominent role.

Given the diversity of the industrial sector, it is useful to disaggregate the analysis by company size (Section 3.2.2), supplier status (Section 3.2.3), energy intensity (Section 3.2.4), and sector (Section 3.2.5), as well as by companies’ primary decision-making logic (Section 3.2.6). Before doing so, and in light of the strategic considerations discussed in Section 3.1, we begin by exploring how companies’ GHG reduction ambitions vary depending on their primary motivation for decarbonisation (Section 3.2.1).

3.2.1. Decarbonisation Ambition by Primary Motivator

Only a small share of companies (16%) identified investor requirements as one of their top three motivators for decarbonisation as of May 2020. Yet, among those who did list it as their primary motivator (6%), the reported ambition level was higher than for any other group—across all quartiles and whiskers (cf. Figure 2). This aligns with (a) insights from interviews with entrepreneurs who emphasised that maintaining investability is vital to business continuity, (b) the growing preference for green and sustainable investment funds, and (c) the influence of the EU taxonomy. Together, these trends suggest that the proportion of companies motivated by investor requirements has likely increased significantly since the time of data collection.

The data also shows that the more ambitious half of companies primarily motivated by image considerations sets significantly higher GHG reduction targets than the average. Given the growing skills gap—driven by demographic change and shifting qualification needs—being perceived as more attractive by applicants than competitors may partly explain the above-average ambition of this group. At the same time, concerns have been raised about the sincerity of such targets, especially when image considerations dominate the motivation (i.e., greenwashing) [103].

Similarly—though to a slightly lesser extent—the more ambitious half of companies (i.e., those in the upper two quartiles in terms of GHG reduction targets) whose primary motivator is the reduction of cost risks, also report significantly above-average goals. In light of current challenges—including the war in Ukraine, rising energy prices, supply security concerns, and high emission costs—this motivator may have gained further weight. Resilience against price and supply shocks can be improved through a sustained reduction in the emissions footprint, particularly via on-site decarbonisation measures, such as energy efficiency improvements and the self-generation of renewable energy [64].

In contrast, companies whose primary motivator to decarbonise is customer requirements exhibit a below-average level of ambition in their GHG reduction targets. The data does not indicate whether respondents refer to direct customers or to the companies they supply within broader value chains. It also remains unclear whether these companies set just enough ambition to retain business relationships or to ensure that their products remain sellable—or to sell their products at all—given rising expectations from both end customers and business clients regarding environmental performance. However, such motivations appear plausible. If so, it is likely that ambition levels in this group would increase if the question were asked today. In early 2022, the Energy Efficiency Index of German Industry found that 7 out of 10 manufacturing companies were aiming to offer products with a net-zero emission footprint. Nearly half of these companies stated that they impose—or plan to impose—corresponding requirements on their own suppliers to align emissions across the value chain [80].

The lowest level of ambition is observed among companies whose primary motivator for decarbonisation is government requirements. Unlike other motivators—such as satisfying clients and investors, enhancing external reputation, attracting talent, or ensuring long-term profitability and resilience—government requirements are perceived as external impositions that restrict strategic freedom without directly supporting the company’s core business objectives. As a result, regulatory compliance often resembles a checkbox exercise: companies meet the minimum standard but show little inclination to go beyond it. In contrast, when motivators offer a clear benefit to the company, there appears to be greater willingness to exceed minimum expectations. For external constraints that serve primarily to avoid penalties, companies are more likely to do only as much as is strictly necessary.

Therefore, the key takeaway from Figure 2 is that positive motivators tend to lead to higher ambition. Strategies aiming to encourage companies to decarbonise or to set more ambitious goals should thus avoid relying solely on regulatory obligations. Instead, they should focus on intrinsic motivators and market-based instruments. Policy measures that indirectly reinforce such motivators may prove more effective in raising ambition than direct requirements. That said, holding companies accountable for actually achieving their targets is an entirely different matter [90]—one that lies beyond the scope of this analysis.

While Figure 2 provided a general overview of GHG reduction ambitions across companies based on their respective primary motivator, the box plots in the following subsections offer a more detailed perspective. They illustrate how ambition levels vary depending on company size, supplier status, energy intensity, industrial sector, and decision-making rationale. Although the sample sizes remain robust at this level, some caution is warranted—results should be interpreted as indicative rather than conclusive. Accordingly, the analysis in the following subsections focuses on the most notable differences across categories.

3.2.2. Primary Motivators and Ambition Levels by Company Size

Building on the previous findings, a breakdown by company size (cf.

Table 4. Primary motivators for GHG reduction decisions, by company size (n = 817).

	Micro Company	Small Company	Medium-Sized Company	Large Company	Total
Long-term economic advantages	22%	21%	20%	29%	23%
Corporate social responsibility	25%	15%	19%	24%	20%
Reduction of cost risks	21%	19%	17%	19%	19%
Customer requirements	14%	14%	12%	13%	13%
Image improvement	10%	15%	12%	4%	11%
Government requirements	6%	10%	10%	7%	8%
Investor requirements	3%	6%	9%	5%	6%
Observations	174	222	246	175	817

Note: Cells are colour-coded on a common red-to-green scale (lowest to highest) to support visual comparison of motivator frequencies across company types.

) reveals that the relevance of specific motivators varies significantly.

While long-term economic advantages top the list overall, they are not the most cited primary motivator for all company sizes. Among micro companies, CSR (25%) ranks highest—possibly reflecting the values of locally embedded or family-owned businesses—followed by economic benefits (22%) and cost risks (21%).

Small companies are the only group where cost risk reduction ranks second. They also attribute greater weight to image improvement (15%) than other sizes, while CSR ranks lowest in this group (15%).

Medium-sized companies closely match the overall average. In contrast, large companies stand out: 29% cite long-term economic benefits as their top motivator, while only 4% name image improvement—the lowest among all size categories.

• Looking at GHG reduction targets from a company size perspective (cf. Figure 3), considerable differences emerge. Medium-sized companies that consider customer requirements their primary motivator set significantly higher GHG reduction targets than companies of other sizes. One explanation could be that larger companies—particularly in sectors such as the automotive industry—have introduced strict supply chain requirements, which medium-sized companies are already subject to or expect to be in the near future (cf. Section 3.1.4).

In contrast, micro companies primarily motivated by government requirements report considerably lower-than-average targets, while the opposite is true for large(r) companies. A possible explanation is that regulatory policy tends to focus more on large(r) companies, whereas most micro enterprises are either exempt from strict regulations or perceive themselves as less affected.

Many small and micro companies that cite image improvement as their primary motivator tend to set substantially higher GHG reduction targets than their peers. This may be driven by challenges in attracting skilled staff—especially when competing with larger companies—or by the desire to be perceived locally as environmentally responsible.

Similarly, many medium-sized companies that are primarily motivated by the reduction of cost risks report higher-than-average targets, whereas this is not the case for micro enterprises. Micro companies often lack in-house expertise on energy and decarbonisation—unless they are particularly energy-intensive. This may mean that either energy costs do not account for a large enough share of total expenses to act as a trigger, or that there is limited awareness of the risks associated with inaction, especially if future energy or emissions charges rise.

3.2.3. Primary Motivators and Ambition Levels by Supplier Status

Companies at the end of the supply chain—that is, those not primarily acting as suppliers to other businesses—appear more frequently motivated by long-term economic advantages (26%) and corporate social responsibility (CSR, 23%) than the average, and more so than companies identifying themselves mainly as suppliers (cf.

Table 5. Primary motivators for GHG reduction decisions, by supplier status (n = 821).

	Do You Consider Your Company Primarily as Supplier to Other Companies?
	Yes	No	Total
Long-term economic advantages	21%	26%	23%
Corporate social responsibility	19%	23%	20%
Reduction of cost risks	19%	18%	19%
Customer requirements	14%	12%	13%
Image improvement	12%	8%	11%
Government requirements	9%	9%	9%
Investor requirements	7%	5%	6%
Observations	564	257	821

See note in Table 4 for explanation of the colour scale.

). Being further downstream in the value chain may allow for greater autonomy in strategic decision making and foster a more proactive stance based on principles or entrepreneurial foresight. Additionally, such companies—often larger in size—are more likely to fall under the EU CSR Directive and corresponding reporting obligations [84,85]. For suppliers, customer requirements as a primary motivator appear surprisingly consistent with the overall average (14% vs. 13%). Whether there are greater deviations at the level of secondary or tertiary motivations cannot be determined here.

From the perspective of GHG reduction targets, supplier status is associated with notable differences—particularly when investor requirements are the primary motivator (cf. Figure 4). In the context of increasing demands placed on upstream supply chains, suppliers may proactively raise their ambition to maintain investability or to secure funding for implementation. This supports broader resilience and aligns with external expectations (cf. Section 3.1.3).

That suppliers set higher GHG targets when primarily motivated by customer requirements or image considerations is intuitive, given common elements like supply chain criteria or the desire to remain in good standing with clients. Since suppliers often carry involuntary risks due to shifting customer expectations, a wider variation in ambition levels is also observed when cost-risk reduction is their main motivator. This variation underscores the importance of considering supply chain position when designing effective decarbonisation strategies.

3.2.4. Primary Motivators and Ambition Levels by Energy Intensity

A breakdown by energy intensity reveals distinct motivational patterns (cf.

Table 6. Primary motivators for GHG reduction decisions, by energy intensity (n = 622).

	Not Energy Intensive	Less Energy Intensive	Moderately Energy Intensive	Energy Intensive	Total
Long-term economic advantages	22%	19%	24%	23%	22%
Reduction of cost risks	19%	20%	19%	30%	20%
Corporate social responsibility	16%	23%	17%	23%	20%
Customer requirements	16%	15%	14%	2%	14%
Image improvement	10%	9%	11%	14%	10%
Government requirements	9%	9%	7%	7%	8%
Investor requirements	7%	6%	8%	2%	7%
Observations	149	235	194	44	622

See note in Table 4 for explanation of the colour scale.

). Among energy-intensive companies, the reduction of cost risks is the most frequently cited primary motivator (30%)—far above the average (20%). This is unsurprising, as energy-intensive processes typically correlate with high emissions and greater exposure to energy and carbon costs.

Moderately energy-intensive companies are most likely to cite long-term economic advantages as their main driver (24%). In contrast, energy-intensive companies are much less frequently motivated by customer requirements or investor expectations (each only 2%). Interestingly, image improvement plays a greater role for this group (14%) than for most others.

When it comes to ambition levels (cf. Figure 5), companies with low energy intensity but citing investor requirements as their main motivator report above-average targets. Perhaps this is because it is comparatively easy for many of them to eliminate the majority of their emissions by switching their energy source—for instance, by purchasing renewable electricity.

Conversely, when customer requirements or image improvement are the primary motivators, ambition tends to increase with energy intensity—likely due to more visible energy use, which increases stakeholder attention and creates implicit external pressure to act.

Ambition levels also tend to rise with energy intensity when companies are primarily motivated by long-term economic advantages—likely because energy and emission costs weigh more heavily on the balance sheets of energy-intensive companies. A similar pattern is seen for cost-risk reduction, except among moderately energy-intensive companies. In contrast, ambition levels linked to CSR appear lower as energy intensity increases. One reason may be that larger companies are already subject to CSR reporting mandates, affecting the framing and perception of their actions (cf. Section 3.1.6).

3.2.5. Primary Motivators and Ambition Levels by Sector

A sectoral perspective reveals striking variations in what motivates companies to decarbonise (cf.

Table 7. Primary motivators for GHG reduction decisions, by sector (n = 729, n (sector) ≥ 20 or **).

Primary Motivation, by Sector (n = 729, n ≥ 20 or **)	Long-Term Economic Advantages	Corporate Social Responsibility	Reduction of Cost Risks	Customer Requirements	Image Improvement	Government Requirements	Investor Requirements	Observations
26 Manufacture of computer, electronic, and optical products	43%	19%	14%	0%	14%	5%	5%	21
10 Manufacture of food products	32%	23%	13%	19%	10%	3%	0%	31
22 Manufacture of rubber and plastic products	32%	19%	14%	13%	10%	5%	8%	63
16 Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials	31%	23%	13%	15%	3%	13%	3%	39
06 ** Extraction of crude petroleum and natural gas	31%	15%	8%	15%	23%	0%	8%	13
17 Manufacture of paper and paper products	28%	18%	10%	24%	10%	8%	2%	50
05 ** Mining of coal and lignite	25%	0%	25%	13%	13%	25%	0%	8
20 Manufacture of chemicals and chemical products	24%	7%	24%	13%	13%	4%	13%	45
24 Manufacture of basic metals	23%	25%	28%	8%	10%	5%	3%	40
28 Manufacture of machinery and equipment n.e.c.	21%	21%	20%	14%	11%	6%	6%	70
32 Other manufacturing	21%	21%	21%	10%	10%	10%	7%	29
31 Manufacture of furniture	21%	21%	10%	14%	21%	10%	3%	29
21 Manufacture of basic pharmaceutical products and pharmaceutical preparations	20%	12%	20%	16%	12%	8%	12%	25
23 Manufacture of other non-metallic mineral products	20%	34%	20%	7%	7%	7%	5%	41
25 Manufacture of fabricated metal products, except machinery and equipment	19%	22%	22%	16%	3%	9%	9%	58
27 Manufacture of electrical equipment	19%	22%	17%	6%	14%	16%	6%	64
18 Printing and reproduction of recorded media	17%	26%	26%	13%	9%	9%	0%	23
29 Manufacture of motor vehicles, trailers, and semi-trailers	16%	12%	33%	12%	8%	12%	6%	49
15 Manufacture of leather and related products	10%	35%	10%	26%	6%	6%	6%	31
Total	23%	21%	19%	13%	10%	8%	6%	729

See note in Table 4 for explanation of the colour scale. Bold values indicate the highest and lowest primary motivator proportion per column. ** micro sector (N < 10) with at least 50% participation.

). Nowhere else do primary motivators vary more strongly than across sectors—with up to 35 percentage points between them. These differences underscore the importance of sector-specific approaches, particularly in policymaking.

For instance, 43% of companies in the computer and electronics sector (26) cite long-term economic advantages as their primary motivator, compared to just 10% in the leather industry (15). This contrast may reflect differences in energy intensity, emissions profiles, or the capital investment needed to decarbonise production.

Conversely, CSR and customer requirements are most frequently cited in the leather industry (15; 35% and 26%, respectively), suggesting strong consumer expectations about how products are made. In the automotive sector (29), cost-risk reduction ranks highest (33%)—unsurprising given the sector’s complex value chains (cf. Section 3.1.4).

In oil and gas (06), image improvement is the most frequent primary motivator (23%), while in coal mining (05), government requirements top the list (25%). In the chemical industry (20), where core processes are emissions-intensive and harder—as well as more costly—to abate, investor requirements are more commonly cited (13%), along with elevated levels for both cost-risk reduction and economic advantages (24% each).

Due to the smaller sample sizes in many sectors, Figure 6 focuses on the four with the highest participation. The strongest differences in GHG ambition levels are linked to investor requirements and CSR as primary motivators. Notably, the boxplots show the narrowest spread across sectors when long-term economic advantages are the primary motivator—indicating that this driver leads to comparatively uniform ambition levels, likely because it is widely recognised as economically sensible.

Higher ambitions in the automotive sector (29) may stem from significant external pressure and transformation dynamics (cf. Section 3.1.4). Overall, ambition levels vary substantially by sector, underscoring the importance of tailored approaches aligned with sector-specific motivators, dependencies, and transition challenges identified throughout Section 3.1 and Section 3.2.

3.2.6. Primary Motivators by Decision-Making Logic

In the EEI questionnaire [30], companies were also asked which decision criterion primarily guides their decarbonisation decisions—a topic explored in more detail by Buettner and König [104].

Table 8. Primary motivators for GHG reduction decisions, by primary decision-making criterion (n = 822).

	Please Indicate Which 3 of the Following 6 Points Are the Most Decisive in Determining Your Decarbonisation Mix?
	Level of Investment	Cost per Avoided Tonne of CO2-eq.	Expected Increase in Productivity	Technical Aspects	Implementation Competence	Image Effect Through Visible Measures	Total
Long-term economic advantages	23%	18%	31%	20%	24%	23%	23%
Corporate social responsibility	18%	21%	19%	23%	14%	22%	20%
Reduction of cost risks	21%	21%	20%	19%	16%	15%	19%
Customer requirements	15%	12%	10%	14%	17%	15%	13%
Image improvement	8%	10%	6%	11%	16%	12%	10%
Government requirements	7%	8%	8%	7%	7%	11%	8%
Investor requirements	7%	10%	6%	5%	5%	2%	6%
Observations	149	164	124	134	94	110	822

See note in Table 4 for explanation of the colour scale.

shows that the primary motivators for GHG reduction differ considerably depending on a company’s decision-making logic.

As expected, companies that base their decisions on expected productivity gains most frequently cite long-term economic advantages as their main motivator (31%). In contrast, companies prioritising the cost per avoided tonne of CO₂ equivalent tend to be less strategically driven; here, economic benefits are selected much less often, and motivations appear more reactive.

When implementation competence is the primary determinant, CSR is cited least frequently (14%) as a motivator. At the same time, customer requirements (17%) and image improvement (16%) are selected more often than in other groups—potentially because visible measures and externally triggered expectations play a stronger role when implementation capacity is a limiting factor.

Interestingly, companies that primarily consider positive image effects when deciding on decarbonisation measures are not primarily motivated by image improvement (12%). Instead, they most frequently cite long-term economic advantages (23%) and, least often, investor requirements (2%) as the primary motivator. They are, however, more frequently motivated by government requirements (11%) than other groups—perhaps because public visibility and compliance expectations are closely linked in their reasoning by these companies.

• A more in-depth statistical analysis would be required to explore the interactions between decision-making logic, motivators, the rationale behind, and targeted GHG reduction levels. For instance, a multi-variable regression analysis could reveal whether decision logics explain variances in ambition levels, or whether specific combinations lead to systematically higher outcomes—an area worth exploring in future research.

Although it seems likely that supplier status influences how companies within a sector respond in terms of motivation and ambition, the dataset does not allow a robust cross-tabulation of sector and supplier role due to sample size constraints.

• The patterns observed in motivation and ambition provide a nuanced foundation for understanding company behaviour. The next section places these findings in the context of broader external pressures and legitimacy expectations, discussing implications for organisational decision making on decarbonisation.

4. Discussion

4.1. Ten External Drivers Shaping Whether, When, and How Companies Decarbonise

Understanding the underlying pressure points is key to triggering effective responses to the decarbonisation challenge. Building on the empirical insights from Section 3.1 and Section 3.2, this section outlines and explains the ten most significant negative (external) drivers emerging from this work, which appear to influence whether, when, and how companies decide to act.

(a)

Market access—The ability to sell one’s products

Arguably the most fundamental need of any business is the ability to sell its products. Until recently, little attention was paid to how these products were made. Today, however, growing public and regulatory scrutiny is shifting the focus from product attributes to production processes—pressuring companies to take action.

While media and public attention in the late 20th century focused primarily on issues like sweatshops and child labour [105], the early 21st century brought fair trade and social justice concerns to the forefront [106]. More recently, the spotlight has shifted again—this time toward environmental impacts. These include local pollution from the extraction of key resources, such as lithium (critical for batteries and e-mobility) [49], deforestation to grow soy [107], or the use of rapeseed for biofuels at the expense of food crops [108]. This trend has been discussed in relation to customer requirements and legitimacy pressures (cf. Section 3.1.3 and Section 3.1.6).

(b)

Reputation and public perception

The multi-faceted German brand Siemens experienced a PR crisis in early 2020 due to its involvement in a railway signalling project. While rail transport is generally considered environmentally friendly, Siemens faced public backlash and boycott calls—not because of the project itself, but because the railway served a controversial new coal mine in Australia [43,44]. This example illustrates how even indirect factors—especially associations with environmentally sensitive issues—can escalate into serious reputational risks. The reputational dimension of such cases also mirrors the findings on CSR-related motivations for action (cf. Section 3.2.4 and Section 3.1.6).

(c)

Supply chain regulation and accountability

The European Commission’s supply chain regulation (CSDDD) makes manufacturers legally and financially responsible for what happens—or fails to happen—along their entire supply chain, regardless of where it begins [75]. This adds significant pressure beyond reputational and sales-related concerns (cf. Section 3.1.4) [109]. The EU directive (2024/1760/EU) goes even further than the German version, which already came into force in 2023 [75,76,77,110].

Complying with such requirements is far from trivial. Over recent decades, supply chains have become increasingly fragmented and complex, often involving multiple tiers and geographies. A similar level of scrutiny arises from the EU’s Sustainable Products Initiative, which aims to ensure that “product-specific information requirements will enable consumers to know the environmental impacts of their purchases”—including through the introduction of Digital Product Passports to support the repair, recycling, and the tracking of relevant substances along the supply chain [111].

One pragmatic approach may be to limit responsibility to the directly preceding and succeeding actors in the supply chain, contractually binding them to apply the same standards. However, this only works if those actors themselves fall within the geographic scope of the regulation—or if sufficient contractual enforcement mechanisms or penalty clauses are in place. This limitation mirrors the broader challenges companies face in managing their Scope 3 emissions and product carbon footprints (cf. Section 3.1.3).

(d)

Attractiveness as an employer

The ability to attract and retain skilled employees has become a strategic concern for many companies—particularly in sectors facing acute labour shortages. In the context of an “employee’s market”, where open positions outnumber qualified applicants, prospective recruits and existing staff gain stronger leverage in shaping employer choices [112]. In this setting, non-monetary factors—including corporate values, sustainability ethos, and environmental credibility—increasingly influence job decisions.

According to a McKinsey study, many young graduates rate a company’s sustainability (ethos) higher than salary or job security when choosing an employer. Similarly, a YouGov poll found that 68% of current employees view their employer’s sustainability efforts as important [46,47]. These findings underscore how workforce expectations contribute to external pressure for companies to take climate action—especially in industries where skilled labour is scarce (cf. Section 3.1.4 and Section 3.2.4).

(e)

Re-financing perspective and investor expectations

Pressure is also increasing from a re-financing standpoint, particularly for companies with shareholder ownership structures. Around the 2019 UN Climate Summit in New York, institutional investors reaffirmed their commitment to divest from companies that fail to align with the Paris Agreement [113]. Similarly, in his 2021 Letter to Shareholders, BlackRock CEO Larry Fink declared that climate goals—including temperature alignment—would become central to investment decisions [114].

This stance is not ideologically driven but grounded in fiduciary duty: investors must safeguard the value of the assets entrusted to them. Accordingly, they avoid capital allocation to business models with a foreseeable expiry date—such as coal-fired power plants in countries that have committed to phase out coal. The rationale is clear: outdated or unsustainable business models risk becoming stranded assets, whose value may decline sharply or collapse altogether. For long-term investors, such business models are increasingly seen as financially toxic.

Although political pushback in early 2025 led several major U.S. banks to withdraw from coordinated climate alliances under legal pressure, the underlying economic rationale remains. Even without formal commitments, companies whose models fail to adapt may still face capital exclusion—not for being “unsustainable” in normative terms, but for representing increasing financial risk, and thus losing their “investability” [115] (cf. Section 3.1.3, Section 3.1.4 and Section 3.2.6).

(f)

Shareholder influence on strategic direction

Shareholders not only provide capital—they can also shape company strategy. When climate-conscious investors hold a critical share of voting rights, they may push for emissions targets and decarbonisation pathways, even against initial management resistance. A prominent example is the case of ExxonMobil: in 2021, a coalition of activist investors succeeded in electing climate-focused board members at the oil major [116]. While this form of influence remains rare, it shows how investor pressure can escalate into formal governance actions—particularly when sustainability concerns are linked to long-term value protection (cf. Section 3.1.3 and Section 3.2.6).

(g)

Climate-related physical risks

Investors increasingly expect companies to disclose physical climate risks, as these can directly affect operational continuity and financial performance. In late 2020, a group of investors urged Europe’s largest companies to be transparent about such vulnerabilities [117]. One concrete example is BASF, which faced production disruptions in 2019 due to historically low water levels on the Rhine, hampering the barge transport of raw materials [118]. The situation worsened in 2022, as reduced water levels also affected hydro power plants, as well as the cooling capacity at nuclear and coal plants, cutting power output and driving up prices [119,120].

Likewise, droughts have affected crop availability and pricing, as well as water-intensive industrial processes, such as those in paint shops and battery production. These cases illustrate how climate-induced disruptions can threaten both supply chains and business models (cf. Section 3.1.2 and Section 3.2.4).

(h)

Supply chain visibility and control

Globalisation and specialisation have led many manufacturers—especially OEMs—to operate with a low vertical range of production. Their value creation often centres on assembling, painting, testing, and packaging components produced by upstream suppliers. As a result, only a small share of a product’s emissions lies within their direct control. In the automotive sector, for example, direct emissions can represent as little as 5% of a vehicle’s total footprint—with the painting process contributing the largest portion [53,54,121].

While outsourcing has economic advantages, it complicates carbon accounting. Many companies struggle to identify and reduce Scope 3 emissions or establish credible product carbon footprints (PCFs).

According to McKinsey, “only 2 percent of companies have visibility into their supply base beyond the second tier” [122]. Ambition levels are nonetheless high: in 2021, 75% of companies participating in the Energy Efficiency Index (EEI) planned to decarbonise their Scope 3 emissions, and 70% aimed to offer net-zero products.

Consequently, 38% had already introduced footprint-related criteria into supplier contracts—rising to 45% among companies targeting net-zero PCFs (compared to just 21% among others) [80].

This shift highlights the growing external pressure to improve upstream emissions control—even where direct influence is limited (cf. Section 3.1.3 and Section 3.2.3).

(i)

Energy and emission price risks

Rising energy costs [123] and increasing carbon prices [124] are creating strong economic incentives for companies to reduce their exposure. Efficiency and decarbonisation measures are not only climate actions but risk mitigation tools—especially when companies, their customers, or regulators expect lower emissions intensity or even net-zero product footprints.

These pressures directly affect operational costs and future competitiveness, and thus feature prominently in companies’ motivation to act (cf. Section 3.1.2 and Section 3.2.4).

(j)

Future-proofing and supply chain resilience

Business continuity and supply chain security have emerged as critical pressure points—beyond climate concerns alone. The COVID-19 pandemic, the Ever Given blockage of the Suez Canal [125,126], and ongoing supply shortages exposed vulnerabilities in global trade [127]. The war in Ukraine and prolonged lockdowns, such as in Shanghai [128], further demonstrated that such disruptions are not isolated events but structural risks.

To remain resilient, companies must prepare for price shocks and availability constraints. Diversifying suppliers, increasing buffer inventories, and prioritising local sourcing are key strategies to future-proof their business model and product portfolio. The less a company depends on volatile supply chains—whether for energy, goods, or raw materials—the lower its exposure. Measures that improve resource efficiency and circularity therefore serve not only environmental goals but also business continuity (cf. Section 3.1.4 and Section 3.2.5).

• In sum, ten (external) pressure points appear particularly relevant for companies when considering whether, when, and how to decarbonise. These include (a) market access, (b) reputation and public perception, (c) supply chain regulation, (d) attractiveness as an employer, (e) re-financing perspectives, (f) shareholder influence, (g) climate-related physical risks, (h) supply chain visibility and control, (i) energy and emission price risks, and (j) supply chain resilience and future-proofing. However, the specific weight of each driver depends on the company’s individual context—shaped by political, economic, and societal factors.

The following section discusses how these pressure points relate to broader legitimacy expectations, organisational behaviour, and systemic trends—and what they imply for future decarbonisation pathways.

4.2. Organisational Legitimacy and Systemic Pressures

The decarbonisation of industrial organisations can be seen as a profound process of institutionalisation—driven by political actors, professional bodies, social movements, the general public, and industrial actors themselves. According to institutional theory, organisations must maintain legitimacy to access resources and thrive within their social environment [129,130]. This legitimacy encompasses both material (e.g., capital, orders) and non-material resources (e.g., reputation, workforce) and depends on whether organisational behaviour is perceived as appropriate by key stakeholders.

Given the current discourse on decarbonisation, the pressure on organisations to achieve and uphold legitimacy is unlikely to ease. On the contrary, regulatory instruments (e.g., carbon pricing), normative expectations (e.g., professionalisation, guidelines, best practices), and cultural–cognitive factors (e.g., public opinion, peer pressure)—together with the systemic interdependencies within the industrial sector—make decarbonisation a prerequisite for long-term organisational survival [131].

Buchenau et al. note that “many companies have realised the need to manufacture sustainably too late” [48]. According to Wolfgang Hahn, managing director of ECG Energy Consulting, “most smaller and medium-sized companies still underestimate what the increasingly called-for climate neutrality and carbon certification actually mean for their company”, adding that “increasing pressure from supply chain, politics and society calls for urgent action to secure one’s own future” [48].

Inaction thus entails high opportunity costs—especially in the current environment of energy scarcity, security risks, economic turmoil, and price volatility. These conditions, and the question of how best to act [23], warrant a rethinking of economic viability. Such reassessment would likely alter investment decisions and reinforce the case for prioritising on-site decarbonisation measures [64].

The “pain” experienced by many companies may otherwise push climate action to the back burner. Yet, if decarbonisation is shown to ease this pain, it may strengthen companies’ determination to act—provided it is perceived as supporting their core ambition to remain successful, rather than as an added regulatory burden during already difficult times.

By communicating the opportunity costs of inaction and supporting relevant decarbonisation measures, companies’ profit functions can be realigned with societal goals. This article has therefore aimed to identify factors that may help trigger intrinsic motivation—either from within companies or through external impulses—to initiate or to facilitate initiation of effective decarbonisation efforts.

5. Conclusions

This article set out to examine what motivates companies to take the decision to decarbonise, responding to a persistent gap in the literature: while decarbonisation is widely recognised as essential, little was known about the specific factors that trigger such decisions in industrial companies today. Drawing on a mixed-methods design that combines qualitative case insights with survey data, this article shows how both internal motivators and external drivers shape companies’ decarbonisation strategies—and how the balance between them influences ambition levels and implementation pathways.

The research objective was twofold: first, to categorise and empirically assess the most relevant motivators and drivers influencing industrial decarbonisation decisions in Germany; second, to explore how these factors vary depending on company characteristics, such as size, energy intensity, and position in the supply chain. The article contributes to filling the research gap by explicitly disentangling intrinsic motivators (e.g., future-proofing, cost-risk reduction) from external drivers (e.g., regulation, supply chain pressure) and by analysing their relative influence across contexts.

The findings highlight a central insight: companies are more likely to act decisively and ambitiously when internal economic logic aligns with broader climate goals. Rather than viewing decarbonisation primarily as a regulatory burden, successful companies reframe it as a business opportunity—a lever to mitigate long-term risks, strengthen resilience, and maintain competitiveness. Crucially, this shift can realign a company’s profit function itself: when decarbonisation is seen not as a cost of compliance but as a source of strategic value, it becomes an intrinsic motivator. In this way, proactive climate action is no longer a response to external enforcement but a pathway to future-proof business success.

From a practical perspective, this article offers timely insights for policymakers, investors, and corporate decision-makers alike. If intrinsic motivators can be amplified—for instance by clarifying opportunity costs of inaction, facilitating access to decarbonisation pathways, or integrating carbon-related information into investment decisions—ambition levels are likely to rise. The results therefore support a shift in policy design: rather than relying solely on external pressure, regulatory frameworks should aim to activate and support companies’ own interest in taking proactive steps.

Outlook: From Understanding to Impact

In today’s volatile economic and geopolitical environment, the balance between internal motivators and external pressures is shifting. For many companies, resilience, competitiveness, and long-term viability are no longer optional—they are existential. Against this backdrop, decarbonisation must not be framed as a compliance cost or “good-weather sustainability.” Instead, it should be seen—and communicated—as a strategic design choice: one that enables businesses to navigate uncertainty, mitigate risks, and shape a future that is not only climate-compatible, but economically sound and socially robust.

This article has demonstrated that when decarbonisation aligns with internal economic logic, ambition rises and companies act. This alignment—reframing climate action as a driver of value, not just a response to regulation—holds enormous transformative power. It enables a realignment of the company’s profit function with societal needs, turning what might feel like an external burden into an intrinsic business strategy.

To translate this insight into impact, it is essential to understand the systemic conditions under which transformation can unfold. As outlined elsewhere [Buettner, 2024] [132], the transformation of energy and industry systems is not just a technical challenge—it is a complex, multi-dimensional journey. Success depends not only on available technologies, but on awareness, skills, and integration into broader system logics. The companies most likely to succeed will be those who understand interdependencies, anticipate transition pathways, and align their strategic design accordingly.

These insights are further underpinned by a broader, multi-dimensional analysis conducted by Buettner as part of his dissertation. This research incorporated the preprint version of this article, which has since been substantially expanded and refined in the present version [133].

Against this background, a new round of data collection—for instance, via future iterations of the Energy Efficiency Index (EEI)—could explore whether today’s volatile conditions have shifted the primary motivators for decarbonisation. Are long-term cost risks still the dominant trigger? Or are emerging geopolitical, energy security, and supply chain concerns now taking the lead?

These questions are not just academic. They are central to plotting a new narrative for industrial decarbonisation: one that enables decision-makers—in companies and in policy—to break the ice, build intrinsic motivation, and design strategies that are resilient, just, competitive, and economically viable.