The EY Ireland State of Sustainability report reveals top challenges facing businesses in meeting emissions targets.
New data from the inaugural EY Ireland State of Sustainability report reveals that although 41pc of businesses believe the pandemic has spurred them to improve their sustainability efforts, two thirds (66pc) are doubtful they could reach carbon reduction goals by 2030 as set out in the Paris Agreement.
A further 30pc say they don’t regularly assess current and emerging sustainability risks and opportunities, and almost one in 10 (9pc) say that their organisation currently has a basic focus or none at all on sustainability.
“It’s undeniable that the time to act is now and businesses have a very real responsibility to take charge of the role they can play in addressing the global climate change crisis”
The research was conducted by EY to understand the degree of readiness among Irish organisations around sustainability and the changes that lie ahead.
71pc of businesses believe their leadership has a high level of understanding of sustainability within their organisation, however this doesn’t seem to be translating into action, with almost one in five (18pc) of businesses saying they either don’t consider the sustainability credentials of their suppliers and distribution or retail networks at all, or they do so at a basic level.
Spotlight on climate change
With a national target of reaching carbon neutrality by 2050 set by Government, and the publication of the Climate Action Plan imminent, a united approach by Ireland’s business community will be required to support a reduction in national carbon emissions.
“Developments in recent months have shone the spotlight on climate change,” said Stephen Prendiville, head of Sustainability at EY Ireland. “It’s undeniable that the time to act is now and businesses have a very real responsibility to take charge of the role they can play in addressing the global climate change crisis.
“Businesses need to interrogate current approaches to reporting and target setting to ensure they are effective and achievable. They also need to ensure the right people with the right expertise are in place to execute their sustainability strategies and to track progress. Furthermore, businesses need to proactively consider the cost-saving benefits of sustainable practices from the get-go and build them into financial planning. It doesn’t undermine sustainability efforts to draw a connection to long-term profitability, on the contrary, it supports its adoption and longevity.”
Standout climate challenges for Irish firms
According to the report, the standout challenges facing businesses in meeting emissions targets include:
Reporting standards: Over half (54pc) of companies in Ireland don’t engage in environmental, social and governance (ESG) reporting according to recognised frameworks and standards (e.g. Global Reporting Initiative, Sustainability Accounting Standards Board, TCFD etc), and when it comes to monitoring their sustainability performance, almost two in five (38pc) either only have a basic level of reporting or none whatsoever.
Targets: A significant number of companies have emissions targets that aren’t scientifically reinforced. Fifty-eight per cent of companies claim they don’t currently have science-based targets to support the achievement of net zero by 2030, while a further 20pc don’t know if their existing emissions targets are science-based or not.
Expertise: A lack of specialist expertise and adequate resources to support implementation of the sustainability function is a real challenge for many Irish companies – 40pc say they will be seeking support from independent advisors in the next 6-12 months to help them improve their sustainability efforts.
Profitability: Only three per cent of companies see their ability to grow profits as a motivating factor for engaging in sustainability efforts, despite the fact that 44pc of businesses believe their sustainability efforts to date have positively impacted their bottom line.
