Irish firms lag behind others in Europe on climate investments, EIB finds

Irish companies are among the least prepared to address climate issues, according to the EIB, which is warning against a ‘wait-and-see attitude’.

Even with the ever-increasing evidence of the devastating toll of the climate crisis, Irish businesses appeared lacking in their response to the climate emergency in a new survey by the European Investment Bank (EIB).

The annual EIB study compares SMEs and large firms across the EU with samples from the US to see how companies are responding to the climate crisis and how they have invested and plan to invest in limiting their climate impact.

With 35,000 firms in total surveyed, the results can provide a glimpse into how businesses in different countries are dealing with the climate emergency. Unfortunately for Ireland, the Emerald Isle looked much less green than its European counterparts.

Ireland’s lacking response

The EIB survey found that only 19pc of Irish businesses have set a climate target, compared to an EU average of 41pc. One-tenth of companies surveyed in Ireland have dedicated climate staff, which is lower than the European average of nearly one-quarter.

The share of businesses that had invested in initiatives to tackle climate risks stood at 19pc, far below the EU average of 45pc, while only 33pc had plans to invest in such initiatives. Just over a third (36pc) had invested in energy efficiency, compared to the EU average of 47pc.

Even compared to the results from Ireland in 2019, fewer Irish companies performed energy audits this year and a smaller percentage said that they were concerned about energy costs.

The average percentage of Irish firms concerned about energy costs still sat at 66pc, slightly higher than the EU average of 57pc. But only 36pc had conducted an energy audit, a good deal lower than the EU average of 55pc.

“The catastrophic rainfalls and terrible loss of life this summer should leave no doubt that climate change is happening. We can no longer afford a wait-and-see attitude,” said EIB vice-president Ricardo Mourinho Félix.

“Our latest study shows that if we want the transition to a greener economy to succeed, raising awareness of those risks matters: EU firms that understand those risks are more likely to invest in climate action. Regulatory requirements and transparency, as well as setting the right incentives for businesses will be crucial.”

Different types of risk

The EIB survey also investigated the motivations behind behaviours, with uncertainty about climate impacts being the most cited obstacle for Irish firms.

EIB’s chief economist, Debora Revoltella, said that the majority of firms in Europe are “unaware of the challenges ahead” and how to adapt to regulatory changes that will affect their supply chains, products or reputation.

“Enhancing firms’ awareness of these risks will be as important as reducing uncertainty about regulatory changes,” she added. “The Fit for 55 package has opened the way for fruitful discussion among EU countries about a clear regulatory framework, enhanced climate awareness and proactive public and private investments.”

While there were also regional differences in the survey, researchers did highlight many overall positive trends regarding climate impact compared to previous years. More companies had invested in energy efficiency and were allocating more money from their overall budgets towards decreasing their climate impact.

This bodes well for the EU’s plans for a greener Europe post-pandemic but highlighted the need for Irish companies to keep pace with their counterparts across the continent.

Reporting: Silicon Republic