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Irish Businesses Largely Underprepared For Net Zero Transition

Irish businesses are significantly underprepared when it comes to making the transformative changes required to achieve net zero, a sustainability report from University College Cork (UCC) commissioned by Microsoft Ireland has found.

Just one in five businesses (19%) are yet to commence efforts to become more sustainable, while less than a tenth (9%) consider themselves well-advanced or truly sustainable.

Even for those that are in the early stages of their sustainability journey, three in five businesses are yet to formulate a dedicated sustainability strategy or policy, and 20% of businesses have not set commitments or targets relating to any critical sustainability issues.

The research also points to a lack of sustainability leadership and suitable skills among Irish businesses when it comes to driving sustainable transformation

Some 69% do not have someone tasked with developing and implementing a sustainability strategy. The same proportion (69%) do not have someone tasked with identifying environmental sustainability priorities.

When it comes to sustainability skills, approximately two-thirds of Irish businesses said they were either yet to develop the required skills or had basic competencies in this area.

There is also strong evidence that Irish businesses underestimate the scale of action required to achieve net zero emissions by 2050, with just 22% of Irish businesses having committed to a net zero target.

The government has set a target to reduce emissions by 51% by 2030 and become carbon neutral by 2050. Large companies will be required to publicly disclose information on how they engage with environmental, social, and governance issues from 2024.

Anne Sheehan, general manager of Microsoft Ireland, said, “the lack of progress is concerning given Government’s overarching climate action commitments for 2030 and beyond. In order for national targets to be met, every organisation must play its part and take action by making sustainability a business imperative and a leadership priority. Simplifying sustainability measurement and reporting is one area that will help SMEs who may not have the in-house expertise or skills. Developing a workforce with the sustainability skills Ireland needs will also require a concerted and coordinated effort from businesses, industry organisations, the education sector and government.”

Dr Marguerite Nyhan, associate professor in future sustainability and environmental engineering at UCC, said, “our research shows that although some businesses are embracing the sustainability transition, the majority are not and need to step up their sustainability and decarbonisation efforts immediately. That begins by defining a sustainability strategy with firm net zero commitments and targets that are measured and monitored. Organisations urgently need to be aware of the new sustainability reporting obligations and address the challenges associated with sustainability reporting. That will require enhanced sustainability expertise and skills at every level within business including at leadership level.”

Four in five (81%) businesses stated that digital technology was “important”, “fairly important” or “very important” to their organisation’s sustainability transition.

However, almost two thirds (64%) of Irish businesses said they had not adopted digital technologies to support their sustainability efforts or were in the early stages of adopting technology for this purpose.

Only a very small proportion (6%) of businesses are either “well advanced and ahead of most others” or “an exemplar of best practice” in this area.

Sheehan added, “Irish businesses of all sizes see digital technology as a critical enabler of their sustainable transitions, however, most are yet to leverage it for this purpose. From using data intelligence to monitor carbon emissions to harnessing AI to reduce energy consumption, technology can empower businesses on their journey whilst also opening up new business opportunities. It’s clear that now really is the time for Irish businesses to move faster and go further in order to achieve a net zero future for all.”

Dr Nyhan said, “to drive meaningful change, leaders must look to understand the economic case for sustainability within their organisations and the competitive advantages it can gain in the years ahead. As digital technologies offer potential to drive systems change and manage, monitor and track progress, businesses should maximise the opportunities of the digital revolution to achieve their sustainability and net zero ambitions. By taking the lead and harnessing the opportunities of the sustainability transition which is underway, Irish businesses can play a positive role in addressing this pressing challenge of our time.”

Source: Business Plus

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