Economy

Irish firms lag when it comes to taking action on climate change

New study shows local companies are failing to take climate change seriously

Companies who don’t care about the environment should realise that their investors and customers do

Tue Aug 10 2021 - 05:53

There were few if any words of comfort in the UN’s report on climate change published on Monday. It made for grim reading with its warnings of increasingly extreme heatwaves, droughts and flooding, with deep cuts in emissions of greenhouse gases needed to stabilise rising temperatures.

A study published by the European Investment Bank, which coincided with the Intergovernmental Panel on Climate Change (IPCC) report, shows that Irish companies are among the biggest laggards in taking steps to address environmental issues. Indigenous firms here are bottom of the table when it comes to investing in energy-efficiency measures.

Irish companies last year set aside just 6 per cent of their budgets for such measures, with only 19 per cent of them saying they had invested in climate change initiatives. This compares to 62 per cent of Finnish firms and an EU average of 45 per cent.

As if that weren’t bad enough, indigenous companies also perceived less physical risks that their counterparts in other countries, were far less likely to have set climate targets and had considerably fewer staff focused on the issue of how to cope with environmental impacts.

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We may have escaped some of the worse weather events seen in other regions but the Republic is certainly not exempt from climate change. Given this, it is a huge cause of concern that so many local companies have failed to acknowledge the issue and plan accordingly.

Leo Clancy, the new chief executive of Enterprise Ireland, is among those to have warned that climate change will be one of the key issues facing businesses in the coming years whether they like it or not.

A report just published by Aviva indicates that two-thirds of Irish consumers surveyed believe that environmental, social and governance (ESG) issues are important considerations when investing. They aren’t the only ones. ESG reporting has in itself become a huge industry as institutional investors demand to know what moves are being taken by the companies they back.

Irish businesses need to wake up to the fact that regardless of their views on the environmental challenges ahead, it is something they need to address. And soon.

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