The EU’s Nature Restoration Law (NRL) came perilously close to failure at the final hurdle, its landmark Corporate Sustainability Due Diligence Directive is already significantly diluted, while there is dithering over climate action, environmental standards and ending internal combustion engine car sales in Europe.
All this reflects nervousness among member states that has taken root, raising concerns that the much-heralded Green Deal to decarbonise Europe risks being derailed.
Rowback goes beyond EU policymakers, as under-pressure governments facing elections, chastened by an emerging far right often forging alliances with disgruntled farmers, are weakening their climate commitments. Some are facilitating new fossil-fuel exploration and insisting net-zero emissions by 2050 is just too arduous.
It is a position adopted by those advocating delay of climate actions that borders on climate denialism – given what the science says and evidence of extreme weather events exacerbated by human-induced global warming. Those in this camp ignore co-benefits of transitioning to clean energy, while go-slow risks the world of business easing off on its sustainability agenda.
Dr Tara Shine, chief executive of Change By Degrees, an online platform for sustainability skills, says Green MEP losses in the European Parliament and strengthening of the climate-sceptic hard right will make it tougher to hold the line on existing commitments under the Green Deal and to increase the EU’s climate ambition – including adoption of a new, legally binding target to cut emissions by 90 per cent by 2040.
What European Commission president Ursula von der Leyen does in the aftermath matters – “if she creates alliances with the left and with the Greens it could signal strong moves on climate – but if she chooses alliances on the right, it could be tough to get legislation needed through the parliament”.
It’s a risky time, Shine adds, “a test of von der Leyen’s leadership and political tactics to hold firm on issues she claims are central to her. There is a cooling of appetite on climate action – despite clear economic and societal benefits. The fossil fuel industry is fuelling a greenwashing and defensive campaign to protect its assets and secure its wealth”.
In advance of the critical vote in the European Parliament during July that saw her return to the position for another term, the commission president set out her vision for the next phase of the Green Deal, focused on implementation and investment. “This will be an investment commission,” she promised in her guidelines. Green investments are at the heart of that strategy, as she promised to unveil a “clean industrial deal” in the first 100 days of her mandate.
This, she added, will include investment in clean-energy infrastructure and technologies; simplification measures for business; and an Industrial Decarbonisation Accelerator Act to support energy-intensive sectors in the green transition.
Although the new parliament will have more climate science-denying politicians, “it is thought that far-right gains won’t destroy existing Green Deal policies ... Despite the far-right attention, most Europeans still voted for centrist parties,” says DCU Water Institute director Prof Fiona Regan. “However, these gains may reduce support for aligning policies with scientific recommendations to limit global warming to 1.5 degrees above preindustrial levels.”
She underlines the need to retain focus on responding to 36 major climate risks for Europe identified by the European Environmental Agency, across food, health, infrastructure and economy/finance. “Urgent risks” include conserving ecosystems, protecting against heat, floods and wildfires – and securing European solidarity mechanisms.
Inaction brings immense costs; from 1980 to 2021 weather and climate-related events caused €560 billion in economic losses in the EU, she adds – the Irish Fiscal Advisory Council estimates such events will cost Ireland about €500 million a year up to 2030.
The next five years will be crucial in determining whether Europe achieves its 2030 climate change targets or not, Shine adds. “More importantly, it will determine whether Europe will compete economically or not. China is leading investment in renewables, and they are driving ahead with EVs – if Europe slows down we will fall behind.”
Momentum in green innovations will, however, continue as governments, major corporations and investors increasingly accelerate adoption of climate technologies, Regan believes. These technologies can enhance energy security, affordability and sustainability, especially as Europe fast tracks plans for local renewable energy sources.
Given the importance of agriculture in many EU countries, including Ireland, resistance to the NRL is likely, she notes. “However, striving for the best outcomes for the planet, people, and economy remains essential, necessitating a new approach to achieving these goals. Business as usual is not an option.”
Businesses play a crucial role in meeting the 2030 and 2050 climate targets, Regan says. “[But] it is essential to provide supports and incentives for businesses to rapidly adopt innovations that address climate change (adaptation), enhance sustainability and foster collaboration among climate-ready enterprises. By adapting to new technologies, processes and products, businesses can become job creators, developing new products and services that align with climate challenges.”
Business needs to do the right thing and then speak up and use its influence, Shine says – especially by showing leadership such as achieving B Corp certification where companies seek to use their influence as a force for good. There are more than 8,000 B Corp companies worldwide including Change By Degrees.
“Together we can have a louder voice and show other businesses the benefits of doing thing differently, with a focus on running profitable businesses but also creating benefits for people and the planet. Remember, sustainability isn’t all about carbon emissions it’s about nature, human rights, workers and communities as well.”
Meanwhile the Corporate Sustainability Reporting Directive (CSRD) beckons, requiring companies to report on the impact of corporate activities on environment and society, with an audit of reported information. CSRD legislation was transposed into Irish law on July 5th last. A recent KPMG Ireland report revealed 72 per cent of the companies they surveyed were “far from ready” for CSRD.
“That’s why my business is focused on building the skills needed to get ready to respond to CSRD,” Shine says. “We have developed a practice-based course to upskill teams in businesses to respond to the directive. Disclosure will be an annual event – so building skills now is a wise investment. Unusually for regulation-based training, it is fun, engaging and super practical.
A survey of Irish businesses commissioned by renewables company UrbanVolt reflects a disconnect with nearly eight in 10 (78 per cent) not having a budget set aside for sustainability initiatives. The perceived expense of implementing green initiatives appears to be a significant issue for business owners, with 71 per cent saying they are concerned about the initial capital investment.
Meanwhile, 55 per cent of respondents said cost/expense is a barrier for their business to act on climate change. “Despite an acknowledgment of the need to address climate issues, we can see few businesses are actually taking meaningful steps towards doing so,” says UrbanVolt chief executive Kevin Maughan. “The cost of implementing green initiatives is without question the number one concern for business owners, and we need meaningful action to allay that concern.
“We have no time to waste if we want to safeguard the future of the planet. This needs to happen at all levels of society, including the business world, and we need to see real leadership now before it is too late. Consumers are doing what they can to make changes but even if all individual consumers act, without the involvement of the business sector, we are doomed to failure.”
Companies not integrating climate change into their core business strategy risk harming their reputation and missing out on opportunities to launch potentially profitable new ventures, Regan says. “By adopting sustainable practices in daily operations, embracing renewable energy sources, and engaging in eco-friendly innovation, organisations can take important steps to contribute to society’s environmental goals and promoting a very positive business citizenship.”
Companies may be taking a step-by-step approach to measuring their footprint rather than taking decisive and important actions in parallel, she adds. “Time is not on the side of business who wait. Even better if companies can lead by example, recognising that there are big opportunities for their business in taking the lead.”
A mechanism to drive this forward is for large corporations to take smaller businesses on board and accelerate the process – “as we saw in the early stage of digital company expansions in Ireland”.
Public information should play a crucial role by supporting behaviour changes while “sometimes preventing stricter measures through voluntary action”, Regan says. “In climate action, wealthy countries often focus on innovation over transformative societal change, promoting reliance on unproven technologies rather than empowering individuals. [But] public engagement initiatives frequently highlight easy ‘win-wins’ like recycling while avoiding more impactful but controversial actions such as reducing meat and dairy consumption and limiting air travel.”
Shine highlights risks from delay: “Less money being spent on actions and decisions makes the problem worse – Eg by increasing emissions or putting society more at risk from climate events.”
Turning investment towards climate solutions like public transport, renewables and grid upgrades and away from subsidies for fossil fuels is a clear step in the right direction, she says. “We have all the resources we need to solve this global challenge if we start investing in the solutions, instead of making the problem worse.”
You can find more on Top 1000 here. For the full list of Ireland’s Top 1000 companies, sign up to the ePaper today. The full supplement is also available in Thursday’s (12/09/2024) print edition
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
