Irish businesses are significantly underprepared when it comes to making the transformative changes required to transition to a net zero future, according to the new UCC Sustainable Futures report.
"The Sustainability Transformation: Assessing the Readiness of Irish Businesses" was commissioned by Microsoft Ireland to understand the level of business preparedness for a sustainable, net zero future.
There is strong evidence to suggest that businesses underestimate the scale of ambition and action that are required to build a path to net zero emissions by 2050.
Just 22% have committed to a net zero target, despite Government setting out to reduce emissions nationally by 51% by 2030 and to become carbon neutral by 2050.
The report found that one in five (19%) businesses has yet to start addressing sustainability issues, while less than one in ten (9%) consider themselves to be well-advanced or truly sustainable.
Concerningly, even for those who are in the early stages of their sustainability journey, three in five businesses are yet to formulate a dedicated sustainability strategy or policy. 20% of businesses surveyed said they had no set commitments or targets relating to any critical sustainability issues.
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Anne Sheehan, General Manager, 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," she said.
The research points to a concerning lack of sustainability leadership and suitable skills among Irish businesses when it comes to driving sustainable transformation.
About seven in ten (69%) do not have someone tasked with developing and implementing a sustainability strategy. A similar 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.
Larger businesses will be required to publicly disclose information on how they engage with environmental, social, and governance issues as part of the Corporate Sustainability Reporting Directive from 1st January 2024.
Four in five (81%) businesses said that digital technology was "important", "fairly important" or "very important" to their organisation's sustainability transition.
However, almost two thirds (64%) of 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.
"Irish businesses of all sizes see digital technology as a critical enabler of their sustainable transition, however, most are yet to leverage it to for this purpose," Ms Sheehan said.
"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."
Dr Marguerite Nyhan, Associate Professor in Future Sustainability & Environmental Engineering, University College Cork said global leaders are gathering to build significant momentum for climate action at COP27 this week.
"It is absolutely certain that businesses will play an extremely important role in the sustainability transformation and their actions will be vitally important in our global and national efforts to rapidly reduce emissions and mitigate climate change.
"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," 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," she added.