Irish companies are less confident of meeting carbon targets

Irish firms are less confident than last year of meeting their 2030 carbon pledge as they grapple with rising costs.

According to a study by consultancy EY, 80 per cent of Irish companies have “low confidence” that they will achieve carbon neutrality – where greenhouse gas emissions are offset by carbon savings elsewhere – by 2030, up from 66 per cent last year.

Fewer companies — 40 percent compared to 41 percent in 2021 — now believe their sustainability efforts will have a positive impact on profits.

“The fact that the Irish economy does not see profit as a motivator and driver for sustainability really speaks to an education gap because anything you can do in sustainability can either increase sales or improve your cost performance,” said Stephen Prendiville, Head of Sustainability at EY Ireland.

“Some of it is child’s play. Energy efficiency means lower energy costs. That will increase profits.

“They would like to see some of the tenacity and entrepreneurship that we value in the Irish economy being applied to the sustainability agenda and actually seeing an opportunity to increase revenue and growth opportunities. There are positive business cases for sustainability.”

Mr Prendiville said the energy and inflation crises and the war in Ukraine are likely to hurt climate confidence.

Retrofit costs are rising, with construction price inflation rising to 13.4 per cent last year, according to the Society of Chartered Surveyors Ireland.

The survey came the day after the Coillte Forest Service announced it would plant 100,000 hectares of new forest by 2050, which it says will sequester around 28 million tonnes of carbon from the environment. The new trees will produce 25 million cubic meters of wood that can be used to meet Housing for All’s construction goals of 300,000 new homes by 2030.

This week, Ryanair announced its intention to reduce pollution by 60 percent on flights to and from Amsterdam by using a new aviation fuel made from cooking oil.

Irish packaging giant Smurfit Kappa announced a 6% year-on-year reduction in carbon emissions for 2021 in its latest sustainability report, along with a 6.2% drop in water use and a 7% reduction in waste going to landfill.

“All of these things require buyer caution,” said Mr. Prendiville. “If you look at the sustainability reports of companies today, you might think that we don’t have a crisis. The reality is that they are all making very valid and valiant efforts, but all is not well.”

The EY survey found that emission reduction rules and disclosure requirements were the top motivations for taking climate action (for 28% of companies, up from 16% last year), followed by a desire to do good for the environment (25%).

Customer pressure and activist shareholders don’t play as big a role in motivating companies to change, the survey found.

More companies are aware of sustainability issues than last year – 64% compared to 61% in 2021 – while 28% of Irish companies have adopted science-based climate change targets, compared to 22% in 2021.