Innovations from the capital goods sector are driving industrial decarbonisation.

That’s according to a new report from environmental non-profit CDP, which assesses 22 capital goods companies on how well they are harnessing trends such as electrification, digitisation and automation to help meet the Paris Agreement commitment to keep global warming below 2°C.

Capital goods companies provide the products, machinery and solutions used by major high-emitting sectors such as power generation, buildings and transport.

The report suggests among these firms, Schneider, ABB, Mitsubishi Electric, Siemens and Honeywell are leading the way through increasingly investing in innovative technologies such as microgrids, hybrid renewables and energy storage.

It shows Mitsubishi Electric has filed the largest number of ‘high-quality’ patents with 657 per 10,000 employees between 2000 and 2017 – more than 60% of these focus on automation, connectivity and digitalisation technologies.

CDP says Vestas is leading in renewable investments and rolling out large-scale digitalisation.

However, despite overall progress, the report illustrates how the majority of heavy goods vehicles are still largely dependent on diesel as a primary fuel and how the disclosure of emissions in the value chain is lagging behind progress elsewhere.

Carole Ferguson, Head of Investor Research at CDP, said: “We are on the verge of a low carbon industrial revolution.

“Regulators and markets are demanding the decarbonisation of high-emitting sectors and the industrial corporations at the end of the chain are looking to their suppliers to find innovative new solutions and equipment. The good news is that the capital goods sector is starting to meet this challenge.”