- With 53 out of 100 points, German companies are currently only leveraging half of the potential of digital technologies
- In 2023, German companies increased their EBIT by €28 billion and saved 31 megatonnes of CO2 (4% of Germany’s total emissions) with the help of digitalisation
- Digitalisation potential by 2030: 90% increase in profitability and 36% higher CO2 savings possible at the same time
- Digitalisation gap continues to widen: According to a survey of companies, at 45%, the adoption rate of digital technologies in Germany will also remain far below the estimated global benchmarks in 2030
German companies often associate more climate protection with higher costs and therefore lower profitability. The Sustainable Economic Efficiency through Digitalisation (SEED) Index indicates that the opposite is the case. The adoption rate of digital technologies to advance decarbonisation was only 29% in 2023, which saved roughly 31 megatonnes of CO2 and increased EBIT by around €28 billion. With a SEED Index value of 53 out of 100, German companies were only leveraging half of the potential of digital applications in 2023.
For the first time, the SEED Index measures the extent to which German companies reduced their CO2 emissions and increased their profitability in 2023 by harnessing digital technologies. In addition, it makes forecasts about related developments between now and 2030. The in-depth study, which was prepared by Accenture on behalf of the Vodafone Institute for Society and Communication, serves as an indicator of the future viability of German companies. The current results are a wake-up call for businesses and policymakers.
Opportunities offered by digitalisation are undervalued
According to the forecast of the surveyed companies, the adoption rate of digital technologies is expected to increase to 45% by 2030, which is significantly below the calculated SEED adoption rate (55%) and far below the global benchmarks. This modest forecast highlights the urgency of taking measures to accelerate digitalisation in all sectors of Germany’s economy. The potential is huge: By 2030, digitalisation could enable a 90% increase in EBIT, to €53 billion. At the same time, companies could reduce their CO2 emissions by 36%.
“The findings of the SEED Index are a clear signal to the German business community: There is a significant gap between the current state of digitalisation and what is possible – and necessary – to make our economy future-proof and sustainable at the same time,” says Michael Jungwirth, Managing Director for Sustainability at Vodafone. “We are standing at a critical point where we have to decide just how serious we are about seizing the opportunities of digitalisation. The time to act is now.”
“What makes the SEED Index special is its ability to quantify the direct link between the use of digital technologies, decarbonisation and economic performance. This study is the only one of its kind and offers a clear roadmap for companies and policymakers to make Germany’s economy not only more competitive, but also more sustainable,” emphasises Alexander Holst, Head of Sustainability, Strategy & Consulting DACH at Accenture.
Digital pioneers: Electricity in 2023 – buildings by 2030
Whether digital twins, smart building management or predictive maintenance, the technological possibilities for boosting efficiency while simultaneously reducing CO2 emissions are already available. AI, AR, IoT and the like are making it possible. With an adoption rate of 33%, the electricity sector has the highest level of digitalisation in Germany, while logistics is only leveraging 17% of its potential. Great potential lies particularly with intelligent route and cargo optimisation, but they are not being used yet on a broad scale. As a reason for this, companies cite their lack of capacity to implement digital technologies.
Despite their low adoption rates by global standards, the five analysed sectors – buildings, industry, agriculture, logistics and electricity – were collectively able to save 31 megatonnes of CO2 through the use of digital technologies in 2023, which corresponds to over 4% of Germany’s total emissions in 2022. At the same time, their combined EBIT increased by 9%, or €28 billion. The industry sector – which has the highest turnover of all sectors – profited the most in absolute terms, with almost €23 billion in turnover.
The forecast up to 2030 predicts that the buildings sector will become a digital pioneer by increasing its adoption rate to 65%. As one of the largest emitters, with a share of around 40% of Germany’s total CO2 emissions , the buildings sector will play a key role in efforts to achieve the government’s climate targets. The agricultural sector is also catching up significantly thanks to its adoption rate of 63%, and it also has the highest CO2 savings potential of all the sectors examined, at almost 17%. Intelligent soil, crop and livestock monitoring, in particular, are set to experience a boost in the years ahead. The logistics sector is expected to have the lowest adoption rate, at 34%.
Digitalisation gap will widen between now and 2030
Collectively, digital technologies can help reduce CO2 emissions by around 42 megatonnes, which represents nearly 10% of the German government’s CO2 emissions-reduction target for 2030. At the same time, nearly all sectors have an opportunity to double their EBIT margin achieved through digitalisation by 2030. However, the digitalisation gap between German companies and global benchmarks will continue to widen between now and 2030. German companies are only considered leaders in the use of digital twins in the steel industry.
The five key sectors analysed collectively account for almost all of Germany’s CO2 emissions. At the same time, the 26 use cases analysed cover 95% of the CO2 emissions addressed by companies and impressively demonstrate how digital solutions can contribute to achieving Germany’s climate targets.
Thomas Koenen, Head of the Digitalisation and Innovation Department of the Federation of German Industries (BDI) e.V., adds: “The SEED Index is an important yardstick and eye-opener. It shows why it is necessary to think about digitalisation and sustainability together. It cannot and must not be enough for us to only leverage half of the potential of digitalisation.”
