Opinion: Views from Dublin Climate Summit 2022

In a special blog to mark Dublin Climate Summit 2022, Jackie King, Executive Director, Ibec Global, outlines why embracing ESG ambitions matter for business. 

Climate change is the single greatest challenge faced by humankind today. As part of a wider global response, Ireland needs to play its part by taking decisive action to decouple emissions from population and economic growth, and to transition to a competitive low carbon economy.

Over the last number of years, we have witnessed a growing movement within Ibec members and business globally to consider the impact of their operations, not just in terms of maximising returns but in generating returns in a way which balances economic, environmental, social and governance (ESG) goals.

For Irish business, such a transition presents a no-regrets opportunity to build a better Ireland. If we focus on smart, cost-effective and evidence-based policies, we can use the transition to enhance our energy security, boost competitiveness, improve quality of life and create thousands of sustainable jobs across the country.

The Dublin Climate Summit 2022 affords a unique opportunity for leading stakeholders from the world of business and politics to come together and explore policy actions necessary to deliver ambitions of delivering net zero goals.

Why it matters to business

In recent years, we have seen a raft of legislative changes emerge that is shaping business’ response to climate action. The body of environmental legislation is growing and being strengthening as part of the European Green Deal.

For example, the European Union’s Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence will enter into force in the next 2-3 years, placing rigorous new obligations on thousands of companies and indirectly on their supply chains. In addition, the EU’s ‘Fit for 55’ legislative package represents a major overhaul of the EU toolkit to address climate change.

But regulation is not the only factor driving business’ climate actions. At Ibec, we are seeing more and more companies opting to overtake the legislation and set ambitious ESG goals and carbon reduction targets of their own. A survey conducted by Ibec in Summer 2021 found that 60% of respondents, representing over 70% of direct Irish industrial emission, had either already set a science-based target of for their emission reductions, or were planning to by 2023.

This is a reflection that businesses are increasingly seeing environmental action as being tied to their future competitiveness. In a rapidly changing world, investment, consumers, and talent are increasingly following environmental integrity, and as such, climate action makes both economic and environmental sense for business.

Indeed, throughout 2021 and into 2022, Nasdaq observed a “sustainability premium” with 77% of fund selectors and 75% considering ESG factors as integral to sound investing. The Global Sustainable Investment Alliance estimates total ESG investment assets globally have increased from $22 trillion to $35 trillion in 2020. It follows the emerging sentiment within global business that environmental risk is equated with financial risk, a- clear message that investment will follow environmental integrity.

Furthermore, in a period where firms are becoming engrained in an ever-intensifying competition for top talent, many businesses see engaging in positive environmental action as part of their overall appeal. We know that those organisations who embed a culture of embracing positive ESG ambitions are the same ones who are more effective at ensuring the attraction and retention of employees, particularly those cohorts within the ‘millennials’ or ‘Gen Z’ categories who are known to be more values and purpose driven. While it is not the main driver or ‘pull factor’ for those seeking employment, it is increasingly seen as an additional bonus beyond pay and benefits

Next steps

While many businesses have made positive first steps towards embracing ESG goals, more must be done.

Over recent years, Ireland has built on a long record of strong collective approaches to new and emerging challenges. From social, economic and environmental change to the Covid-19 crisis, Ireland has been amongst the most successful at delivering broad social agreement on the approach to key challenges. This involves bringing stakeholders together with business and Government through platforms such as the Dublin Climate Summit to drive forward the ESG agenda.

Dublin’s strategic position on the North Atlantic between North America and Europe, ideally places the city to be the forum where thought leaders from both continents can exchange ideas and deliver a carbon neutral future.