Introduction
A new report from EY (Ernst & Young) has revealed that 81% of Irish businesses have significantly increased their sustainability focus in 2024, reflecting a growing commitment to environmental, social, and governance (ESG) goals. The report highlights that businesses in Ireland are not only responding to global sustainability trends but are also strategically investing in initiatives to reduce their carbon footprint, improve energy efficiency, and integrate sustainable practices across their operations. The findings are particularly timely as businesses in Ireland and globally face increasing pressure from regulators, consumers, and investors to adopt more sustainable practices.
1. Key Findings of the EY Report
The EY Ireland Sustainable Business Survey provides a detailed snapshot of how Irish companies are addressing sustainability. Key findings from the report include:
- 81% of businesses in Ireland have increased their focus on sustainability in 2024, up from previous years, with many citing growing consumer demand for eco-friendly products and services as a major driver.
- 70% of businesses are planning to invest in sustainability initiatives over the next two years, with a particular emphasis on renewable energy, energy efficiency technologies, and carbon reduction strategies.
- 51% of companies have set measurable sustainability targets, such as net-zero emissions by 2050 or earlier.
- The growing importance of ESG factors in investment decisions has led 41% of Irish businesses to improve their ESG reporting and disclosure practices.
- Sustainability-linked financing is becoming a priority for companies, with a significant rise in businesses seeking green bonds and sustainable loans.
The report paints a picture of an Irish business landscape that is becoming increasingly aware of the need for long-term sustainable practices, driven by both regulatory pressures and the growing demand from consumers and investors for responsible business operations.
2. Drivers Behind Increased Sustainability Focus
Several factors are contributing to the rise in sustainability efforts across Irish businesses:
a. Regulatory Pressure and EU Green Deal
The European Union’s commitment to achieving net-zero emissions by 2050 is having a significant impact on businesses in Ireland, as the country remains deeply integrated into the EU’s climate goals. The EU Green Deal, which aims to turn Europe into the world’s first climate-neutral continent, has placed new obligations on companies, particularly in terms of carbon emissions and energy efficiency. Companies are increasingly looking at how they can comply with these new regulations and meet the demands of the EU’s Carbon Border Adjustment Mechanism (CBAM) and other green policies.
b. Consumer Demand for Sustainable Products
Another driving force behind the sustainability push is changing consumer preferences. As more consumers become conscious of the environmental and social impact of their purchasing decisions, businesses are responding by introducing greener products and services. Companies that can demonstrate a commitment to sustainability are more likely to attract loyal customers and boost brand reputation.
c. Investor Expectations and Capital Flow
Investors are increasingly prioritizing companies with strong ESG credentials. According to the report, more investors are looking to back businesses that align with sustainable investment principles. The rise in sustainability-linked financing — where companies raise capital based on their sustainability performance — has led businesses to improve their ESG disclosures to meet the expectations of impact investors and institutional investors.
d. Cost Savings and Operational Efficiency
Sustainability is not only about environmental responsibility — it’s also a matter of financial efficiency. Many companies are realizing that adopting energy-saving technologies, reducing waste, and optimizing resource use can lead to substantial cost savings. The shift to more energy-efficient operations and circular economy models has been a key focus for Irish businesses aiming to boost both profitability and environmental performance.
3. Areas of Investment in Sustainability
The report also highlights the key areas where Irish businesses are focusing their sustainability investments:
a. Renewable Energy and Clean Technology
Renewable energy continues to be a major focus for Irish businesses, with solar and wind energy seen as key drivers of change. The shift towards renewables is a direct response to the need to reduce carbon emissions and move away from fossil fuels. Many companies are investing in on-site solar installations and entering into long-term power purchase agreements (PPAs) for renewable energy.
b. Carbon Emission Reduction
Businesses are prioritizing the decarbonization of their operations, with many companies developing net-zero strategies. This includes adopting carbon capture technologies, improving supply chain sustainability, and enhancing the energy efficiency of buildings and factories. The report indicates that 41% of businesses plan to reduce their carbon intensity by 25% or more in the next five years.
c. Waste Reduction and Circular Economy
The circular economy is gaining momentum as companies look to minimize waste, reuse resources, and recycle materials. Packaging waste reduction, product life extension, and recycling initiatives are at the forefront of efforts to reduce the environmental impact of business operations.
d. Sustainable Supply Chain Practices
Sustainability efforts extend beyond the walls of companies’ own operations. A growing number of businesses are focusing on the sustainability of their supply chains, requiring suppliers to meet ESG criteria and ensuring that the products and materials they source are environmentally and ethically responsible.
4. Challenges to Sustainability Adoption
While the focus on sustainability has grown, the EY report identifies several challenges faced by Irish businesses in their sustainability journey:
a. High Upfront Costs
For many businesses, especially SMEs (small and medium-sized enterprises), the initial investment required for sustainable technologies can be a significant barrier. Energy-efficient equipment, green infrastructure, and renewable energy installations can require large upfront capital expenditure, even if the long-term benefits include reduced operating costs.
b. Lack of Skilled Talent
As companies embrace more sustainable practices, there is a growing need for specialized skills in areas such as ESG reporting, renewable energy technologies, and sustainable supply chain management. The shortage of professionals with expertise in these fields is a challenge for businesses looking to accelerate their sustainability efforts.
c. Regulatory Complexity
Navigating the complex and evolving regulatory landscape around sustainability can be a daunting task for many businesses. Companies often need to stay on top of changing carbon regulations, tax incentives, and green certification standards, which can vary by country or region.
5. Conclusion: The Future of Sustainability in Ireland
The 81% increase in sustainability efforts among Irish businesses is a clear indicator that the country is taking its environmental responsibilities seriously and that sustainability is becoming a central component of business strategy. As companies look to meet ESG criteria, reduce their carbon footprints, and align with the EU’s climate goals, the shift toward a more sustainable business model will likely accelerate in the coming years.
The EY report shows that sustainability is no longer just a buzzword but a business imperative, with Irish companies increasingly viewing it as a way to gain competitive advantage, attract investment, and drive long-term growth. However, to achieve these goals, businesses must address challenges such as financial constraints, talent shortages, and regulatory complexity, while continuing to innovate and adapt to the demands of consumers, investors, and regulators alike.
As Ireland leads the way in the adoption of sustainable practices, its businesses are setting an example for others in the EU and beyond, proving that environmental responsibility and profitability can go hand in hand.
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