Businesses are increasingly environmentally conscious and have not been found wanting when it comes to setting themselves ever more ambitious goals in relation to climate change and sustainability. Yet, like the rest of the world, they are realising that achieving these targets is easier said than done. What steps can businesses take to ensure they meet their sustainability targets and how important is this in meeting our overall climate goals? We ask a number of Irish thought leaders for their views.
Maria Kelly, head of communications and stakeholder relations at Central Solutions, Skillnet Ireland’s delivery partners for the Climate Ready Academy
The first step businesses have to take is to be clear on their overall objective. What are they trying to achieve? Is it full or partial decarbonisation and in what time frame? Businesses then need to understand the current environmental impact of their operations in terms of energy, water, waste and transport. This helps businesses identify areas where there is waste and inefficiency and reveal opportunities for improved processes and cost savings. It also helps identify the gap between current reality and ambition so the organisation can build their strategy around the targets and actions required to bridge that gap and the time frame in which they will be achieved. In addition, it can lead to a business identifying new opportunities, or new markets and importantly identifying and managing risk.
A key step in this process is an audit of the internal competencies and skills required to help the business transition. The leaders’ programmes in the Climate Ready Academy are designed to help organisations build internal competencies and develop leaders within their organisation to drive the change from within. It is also a great way to engage employees and attract and retain talent.
Meeting our overall climate goals will inevitably involve change and disruption but there are also numerous benefits associated with the transition and businesses are a fundamental part of this. The transition to a green economy will create new jobs and require new skills and the businesses that are prepared for this are the ones that will benefit the most.
Paul Travers, head of energy, climate change and infrastructure at AIB
AIB has committed that 70 per cent of all new lending will be “green’' or “transition’' by 2030 as we seek both to support the achievement of Ireland’s ambitious carbon reduction targets and use our capital as a catalyst to help our customers transition to a lower carbon future. We offer a range of discounted green products to business customers to incentivise them to lower their carbon emissions, such as our sustainability-linked loans, which offer eligible firms a reduced rate of interest linked to the achievement of ambitious, predetermined sustainability targets.
But it can’t just be about lending: the transition needs equity. AIB recently appointed Foresight Group, a leading SME and sustainable infrastructure investment manager, to manage a new SME equity fund to back businesses helping to accelerate Ireland’s transition to a low-carbon economy. AIB is providing a cornerstone investment of €30 million to the fund, which aims to raise €75 million to stimulate job creation and ensure a greener future across the island of Ireland.
Our advice to businesses is to understand your baseline, set and then measure carbon-reduction targets now if they are to position themselves for the future. Transition risks are already evident through accelerating areas like higher procurement standards, heightened ESG expectations in all decision-making, carbon taxes and customer expectations. Our advice is to not only proactively engage and prepare for the huge decarbonisation challenge ahead but also to capitalise on the broader sustainability-linked opportunities that exist now and continue to accelerate.
Siobhán Horan, industry and partner engagement manager at Knowledge Transfer Ireland
Business innovation driven by R&D can be fundamental to any company’s toolkit when considering corporate climate and sustainability goals and how to achieve them. And the good news is that there is significant specialist expertise across the Irish third-level sector and within other Irish research-performing organisations available to companies that can help them build out that R&D capacity to address challenges posed by climate change and the global move towards sustainability.
KTI continues to drive the important agenda of keeping innovation centre stage to drive a strong sustainable economy and a better society by helping businesses work with State research available to them from across the third level and other research-performing organisations. KTI is the national office that can help businesses find the right research partner and our website is a great starting point for any business in this regard. The site also provides tools and resources to support the process of business engaging with the public research base as well as a tool to signpost business toward Irish financial supports that might be available to help enterprise carry out their R&D in this field.
Dr Fabiola Schneider, doctoral researcher, UCD Michael Smurfit Graduate Business School sustainable finance and Sherpa to the European Commission’s Platform on Sustainable Finance
Globally, the majority of people call for wide-ranging action when it comes to climate change, such as making companies pay for pollution, and believe businesses have a similar level of responsibility as governments, with 68 per cent saying that if businesses do not act now they are failing their employees and customers. Yet most firms are big on sustainability leadership claims but not on decisive action. Promises for around 2050 and transition plans heavily relying on not-yet-developed technology and offsets are not a substitute for immediate emission reductions and short-term goals.
Distinguishing between truly green change and greenwashing is a key component of our sustainable transition. Naturally, the latter is much easier for corporations than the former – evident in the current greenwashing pandemic. Greenwashing can be framed as the new climate denial: no one can credibly claim any more that climate change is not happening, or that we are not responsible. But instead of pushing for real green change, incremental steps are being taken which are subsequently promoted as sustainability leadership.
It’s dangerous because it instills a false sense of security – we are doing enough; it will be fine. It’s not. We need systemic change, and we need it now, or the consequences on life and the planet will be devastating, sooner than we can imagine. We need companies to walk the walk instead of only talking the talk.
Chris Collins, country president, Schneider Electric Ireland
It sounds clichéd – but by simply thinking more sustainably, acting more climate conscious and setting and communicating clear sustainability targets can have a bigger impact on global climate goals than you may think. We all have to start somewhere. Of course, actions speak louder than words and so having a clear plan in place which maps out a business’s entire scope one, two and three, emissions is a place where every organisation should start. We cannot address what we do not measure and report on.
And it is equally important for businesses to walk the talk within their teams. At Schneider Electric, last year we partnered with Host In Ireland and their DC for Bees initiative to plant over 2,000 orchards in Ireland in support of our local sustainability commitments.
The size of the problem shouldn’t be underestimated but it’s the same with any large issue – there’s rarely a quick fix and solution. It’s about breaking down the problem at large and making realistic, obtainable changes that will make the biggest difference in the long run. If every business educated themselves on how they are using energy, and more so – how much energy they are using it is much easier to control and change. The most sustainable watt is the one that is never generated. Schneider has many options to help businesses reduce energy waste in buildings, factories, data centres and transport.
Caroline Carty, relationship manager at BNP Paribas
Business plays a key role in the transition to a net-zero economy through concerted actions. Upskilling employees to help navigate the measurement, management and reporting complexities associated with the company’s decarbonisation ambition is also key. Identification of sustainability targets which are measurable, viable and impactful will allow businesses to detect areas for improvement and gather relevant data to monitor progress.
To be successful in reaching targets, businesses need to digitally transform, to ensure they are integrating sustainability into their business strategy. Digital technologies enable business to capture quality data and track sustainability progress in terms of optimisation of resources and reduction of greenhouse emissions. Business must also contribute by sharing lessons learned with industry peers in order to make the transition more efficient and powerful.
The achievement of a net-zero economy is a multidimensional collaboration depending on all economic actors including businesses, banks, regulators and governments. In order to accelerate the pace of change, business can make a positive impact at scale. Business needs to demonstrate how sustainability has an increasingly central role in decision-making to accelerate the transition to a net-zero economy. Actions such as redeployment of capital to low-carbon activities, electrification of energy infrastructure and emphasis on building a circular economy have significant environmental impact and encourage other businesses on their sustainability journey.