Four out of five Irish businesses doubtful they could meet carbon neutral targets in 2030, new survey finds

Number of Irish-based organisations that have adopted Science-Based Targets has increased to 28% from 22% in 2021

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26 April 2022 | 0

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New data from this year’s EY Ireland State of Sustainability report reveals that 80% of Irish businesses have low confidence in meeting carbon neutral targets in 2030, an increase from 66% last year.

Although awareness of sustainability considerations and implications has increased to 64% from 61% in 2021, a deeper understanding of the challenges that lie ahead in relation to achieving sustainability targets has dampened confidence.

“As organisations look more closely at their carbon ambitions, they’ve gained a deeper awareness of the various challenges the transformation will introduce,” says Stephen Prendiville, head of sustainability at EY Ireland.

“With this understanding, Irish business leaders are also experiencing a greater sense of concern around the achievement of stated goals,” Prendiville adds. “Business leaders are also facing headwinds amidst the ongoing energy and inflation crisis and challenging geopolitical issues. These factors, combined with less time to achieve the 2030 goals, mean that we are seeing lower confidence reported.” 

Sustainability motivations

Key motivations behind sustainability-related actions in this year’s survey include compliance (returned by 28% of respondents, up from 16% last year) and doing good for the environment (25% up from 22%). In addition, 40% of respondents agreed that their company’s sustainability efforts to date have positively impacted the bottom line, down slightly from 44% in 2021.

While respondents can see the potential positive impacts of driving towards their sustainability goals, just 36% of participants said their organisation felt opportunities for value generation from sustainability, ESG or net zero strategies were well established.

With compliance now the dominant driver of sustainability efforts, this focus would appear to be at the expense of any value based opportunity.

The compliance mindset is however, shifting the dial when it comes to increased accountability and engagement with stakeholders and supply chains. 62% said there has been a significant increase in focus on sustainability in their business in the last year. And the number of Irish-based organisations that have adopted Science-Based Targets has increased to 28% from 22% in 2021.

“The regulatory landscape has been evolving quickly and a lot of implications are being discussed so it’s not a surprise to see it front of mind for many when thinking about sustainability efforts,” Prendiville continues.

“It’s possible many companies might be waiting to see what regulations will be implemented before confirming their plans for sustainability. What is interesting is that no one surveyed sees “the ability to grow profit” as a key factor in their sustainability efforts. It’s imperative that businesses don’t rely on regulation alone and seek to understand more clearly the long-term business value of sustainability and net zero strategies.”

Stakeholder influence increasing

Meanwhile, the proportion of organisations that engage and consult with relevant stakeholders on sustainability issues to shape strategies has increased from 47% in 2021 to 53% this year.

Businesses are recognising the importance of sustainability to the customer, with 79% believing the sustainability of their product or service is very important, and 83% agreeing the sustainability of business operations is very important.

Just 16% of respondents are concerned that their company is not doing enough from a sustainability perspective, down from 25% who felt the same last year. 16% say that they don’t believe their organisation is taking sustainability seriously enough.

“The biggest concern in the results is the predominant sense among Irish businesses that they are doing enough when it comes to sustainability,” Prendiville says. “Simply put, we need to do more. Decarbonisation requires a huge transformation effort and is a significant challenge for some organisations, but it is also a major opportunity. Businesses need a strategy with a credible implementation plan to decarbonise their business. This needs to be prioritised so businesses can realise the long term value opportunities created while achieving their sustainability goals.”

 

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