European firms show resilience, invest in Green transition, and match US companies In AI

European businesses are firmly staying the course, investing in the green and digital transitions, and showing resilience in the face of a volatile global landscape, according to the latest annual European Investment Bank Investment Survey (EIBIS).

The survey, which covers more than 12,000 EU firms and over 800 US companies polled between April-July 2025, shows that more than nine in 10 EU companies – 92% – are investing directly in measures to cut emissions of greenhouse gases that cause climate change. The EIB Group released the results today in Washington, DC during the annual meetings of the International Monetary Fund and the World Bank Group.

Geopolitical and trade tensions are slowing investment on both sides of the Atlantic, with US tariffs having a stronger impact on American firms, according to the 2025 EIBIS. Investment by EU companies is showing resilience, with 86% continuing to invest – albeit more cautiously than in past years as a result of greater political, regulatory and economic uncertainties.

“While uncertainty weighs heavily on firms, they are so far weathering the shock,” said EIB’s Chief Economist Debora Revoltella. “There is a clear commitment to invest in digitalisation and green initiatives, which are crucial for maintaining competitiveness in the evolving global market. The focus on the green transition is evident, with a considerable portion of investment directed towards sustainable practices.”

Generative AI deployment in the EU

Companies in Europe are adopting advanced forms of artificial intelligence (AI) at broadly the same pace as their US counterparts, according to the survey. The share of firms in the European Union deploying generative AI is 37% compared with 36% of businesses in the US.

European companies can further exploit the benefits of AI by using it in a broader range of activities. European firms lag their US counterparts in deploying AI in the areas of customer service, internal processes, marketing and human resources, according to the survey. In addition, 81% of US businesses that use AI do so in more than two activities compared with 55% of European companies.

Investment challenges and opportunities

The 2025 EIBIS also shows that investment challenges in Europe remain. For example, 83% of EU firms cited uncertainty and 79% of them identified a shortage of skilled labour as major investment barriers. In addition, energy costs are an impediment for 75% of European businesses – signalling the importance of accelerating the deployment of renewable energy, as a driver of EU competitiveness.

Looking ahead, EU firms continue to prioritise replacement investments over capacity expansion, with 26% planning to expand operations in the next three years, versus 37% of U.S. firms with similar intentions.

The share of finance-constrained firms has slightly decreased as compared to past years. Policy support, in the form of grants or finance on favourable conditions, reaches some 16% of European firms that invest. Notably, 61% of policy support in the EU is targeted to specific policy objectives (41% supporting the green transition, 29% for innovation).

Companies on both side of the Atlantic are increasingly worried about recent changes in customs and tariffs, with  77% of US  firms perceiving them as a major obstacle (vs 48% in the EU).

Upside potential is associated with increased efforts in terms of European integration and simplification. More specifically 62% of European firms perceive the internal EU market as fragmented, while the cost of bureaucracy is estimated at some 2% of turnover for Small and Medium-Sized companies (SMEs).