Nearly half of enterprises on island of Ireland to reduce spending on sustainability initiatives.
New research from global consultancy Expleo has found that 49% of enterprises on the island of Ireland will spend less on sustainability initiatives in the next 12 months, compared to the previous 12 months, due to concerns about the current economic outlook.
This comes despite 84% of business leaders believing that their organisation could do more to make their IT infrastructure and projects more environmentally friendly.
“While it is important to keep a watchful eye on the economic outlook, businesses must realise that sustainability is not optional”
The research is published in Expleo’s Business Transformation Index (BTI) 2023 Ireland Spotlight report.
The global study, which included a survey of 141 business leaders in medium to large-sized enterprises on the island of Ireland, suggests a softening of the importance being placed on sustainability by businesses operating in Ireland.
Along with reduced investments in sustainability efforts, the proportion of organisations reporting to have clear plans that will help Ireland to meet its decarbonisation targets has gone down from 90% to 80%.
Climate action goals
Meanwhile, just 22% of business leaders surveyed said that they are focusing on climate action as part of the UN Sustainable Development Goals, versus a considerably higher 37% globally.
While economic uncertainty is squeezing sustainability budgets, business leaders also expressed concerns that too great a focus on sustainability can hamper innovation. Expleo’s research found that more than a third (35%) believe that focusing too much on sustainability will limit their organisation’s ability to innovate. This is in contrast to a larger proportion (49%), who believe a focus on sustainability is, in fact, a strong catalyst for innovation.
The BTI research found that a failure to act on sustainability is proving costly for businesses in Ireland, as 54% – versus 41% globally – reported having lost customers due to dissatisfaction with their sustainability performance last year. Conversely, 47% of businesses said that they themselves had stopped working with suppliers or customers who were not meeting their sustainability expectations.
In addition to reviewing their customer and supply chains, businesses are also offsetting the environmental impact of their technologies and IT infrastructure. Expleo’s research found that the average business is currently offsetting 43% of the carbon footprint of their technologies and IT infrastructure. In the next 12 months, the average enterprise in Ireland will spend €1.4M on offsetting their IT and technologies.
Other sustainability initiatives that medium to large-sized businesses are pursuing include: developing more environmentally sustainable products and services (53%); using technology to monitor where resources are being wasted and therefore reduce consumption (45%); using renewable energy sources to power facilities and technologies (45%); and sourcing from environmentally responsible technology suppliers and partners where possible (43%).
Looking to the future, the most common plans of action amongst those surveyed included mapping out a Net Zero future for their company (58%) and shifting to a circular business model (57%).
“Our Business Transformation Index 2023 Ireland Spotlight provides valuable insights and recommendations on the challenges facing organisations today and the transformative business practices that can pave the way to success,” said Phil Codd, managing director of Expleo Ireland.
“Sustainability has become core to this success to the point where it is not just the right thing to do anymore; it is a deal-breaker for doing business. Our research shows that without it, organisations are suffering reputational damage and the lost revenues that come with it – something that we expect will continue and even intensify in tandem with the widespread focus on sustainability.
“While it is important to keep a watchful eye on the economic outlook, businesses must realise that sustainability is not optional. Becoming a more sustainable enterprise may require upfront investment, but in the long-term, the resulting initiatives promote innovation, efficiency and cost-saving. Reducing sustainability investments is therefore by far the more costly option.”
Main image at top: Phil Codd, managing director, Expleo Ireland