Small Firms Are Falling Behind On Climate Action
A new Department of Enterprise, Trade and Employment report finds that size matters when it comes to companies formulating climate response plans, writes Ed Micheau
Few businesses across Ireland can be unaware that a massive transformation of the economy and society related to climate action is pending over the coming decades. However, the extent of the level of preparedness and early action among enterprises is on a spectrum from early adapters to cautious beginners to laggards.
Negativity surrounding the big picture of Ireland Inc is possibly unhelpful in stimulating those at the middle to the recalcitrant end of the spectrum to speed up or even to begin to think about climate action. Ireland has set a target to decarbonise by 51% by the end of 2030 from 2019 levels.
Despite some progress, achieving that outcome looks elusive at the moment. According to Environmental Protection Agency, Ireland is on course to deliver a 29% reduction in emissions by the end of the decade – significantly below target.
Missing the target could have serious financial implications for the State. The Climate Change Advisory Council warned recently that failure to reach the 2030 target could result in multibillion euro fines or compliance failure costs applied by the EU.
If that is the big picture, what is happening on the ground? A recent report and research paper published by officials in the Department of Enterprise, Trade and Employment (DETE) sheds some light into the varying levels of progress or otherwise being made by companies in relation to climate action.
State Enterprise Agency Client Firms: Climate Change, Planning, and Investment examines companies supported by the IDA and Enterprise Ireland, and provides a proxy of sorts for what is happening more widely among businesses.
Overall, the paper suggests progress is being made by business, but that the level of progress being made is not fast enough and is skewed towards large companies, with smaller SMEs and micro businesses lagging behind.
The paper utilises data collected through DETE’s Annual Business Survey of Economic Impact (ABSEI). This draws on responses from c.4,200 companies in receipt of State aids.
The snapshot finding from the report is that cement and alumina account for 60% off all industrial emissions and is one of the areas where most focus is required to decarbonise. By contrast, modern manufacturing, which accounts for 80% of Gross Added Value in the