Almost half of businesses in Ireland say they will pare back spending on sustainability initiatives over the next 12 months amid concern about the global economic outlook, new all-island research by Expleo indicates.
Published on Wednesday, the IT services provider and digital transformation specialist’s Business Transformation Index 2023 report also highlights an overall decline in the number of Irish firms that said they have clear plans to help the country meet its decarbonisation goals from 90 per cent last year to 80 per cent.
More than one third of the 141 medium to large-sized Irish business polled as part of the global survey said they believe that focusing too much on sustainability will limit their company’s ability to innovate. While 49 per cent of respondents said they believe the opposite, the figures suggest “a softening of the importance being placed on sustainability efforts”, Expleo said.
Overall, 49 per cent of Irish companies said they will trim spending on sustainability over the next 12 months compared with last year, largely due to concerns about the economic outlook. This is despite the facts that more than half of domestic firms said they had lost customers due to dissatisfaction with their green credentials and an overwhelming majority said they could do more to make their IT systems and projects more environmentally friendly.
The results chime with surveys conducted in the UK last year. A 2022 KPMG poll highlighted a strong willingness among UK chief executives to pause or reconsider environmental and social governance (ESG) initiatives against the backdrop of soaring inflation and geopolitical uncertainty. Meanwhile, just 33 per cent of mid-sized UK businesses told Grant Thornton that they have a net-zero carbon strategy down from slightly more than half in 2021.
Phil Codd, managing director Expleo Ireland, warned that Irish businesses need to understand that sustainability “is not optional”.
He said: “Becoming a more sustainable enterprise may require upfront investment, but in the long term, the resulting initiatives promote innovation, efficiency and cost-saving. Reducing sustainability investments is therefore by far the more costly option.”
There are some bright spots in the report. About 47 per cent of Irish respondents said they had stopped working with suppliers or customers who were not meeting their sustainability expectations. Meanwhile, some 43 per cent of businesses said they had taken steps to offset the carbon footprint of their IT infrastructure.
“Sustainability has become core to this success to the point where it is not just the right thing to do any more; it is a deal-breaker for doing business,” said Mr Codd. “Our research shows that without it, organisations are suffering reputational damage and the lost revenues that come with it – something that we expect will continue and even intensify in tandem with the widespread focus on sustainability.”
