1. Full disclosure
Organisations will no longer be able to claim to be sustainable without proving it. Consumers and investors want to know what companies are doing about their impact on the planet and how they are dealing with their own climate risks.
"Sustainability used to be a CSR issue, a business hygiene function," says Brian O'Kennedy, chief executive of sustainability consultancy Clearstream Solutions. "A box-ticking exercise with a few words in the annual report with a nice picture of employees doing voluntary work. But the market wants to see metrics now. This is being driven be investors, customers and consumers. Investors have realised that sustainable companies outperform the market. Companies on the Carbon Disclosure Project A-list outperformed market by 7 per cent last year. Investors want to put money into funds that are sustainable."
“The EU’s core long-term strategy is to implement policies which make it easier and cheaper for sustainable companies to access capital while making it harder and more expensive for non-sustainable businesses,” adds Russell Smyth. “Such policies will impact the investment decisions of both debt and equity investors.”
2. All change at the filling station
What do you call a petrol station without petrol? That’s going to be a big question in the coming years. “The Government ambition is to have 50 per cent of the cars on the road electric by 2030, but they need to figure out the charging infrastructure first,” says Stephen Prendiville, head of sustainability with EY Ireland. “That will change our relationship with forecourts and our journeys will change. Stopping at the forecourt will be about the experience and filling stations will provide entertainment and other diversions for customers. There will be more to it than pull in, gas up, and go.” He also foresees the possibility of roadside fast-charging points leading to the almost literal regeneration of towns and villages around Ireland.
3. Growing value of natural capital
An unmown lawn was once the subject of neighbourhood opprobrium, not it means you’re pollinator-friendly and doing your bit to save the planet. “We are doing okay on climate change,” says O’Kennedy. “We have all the elements in place to make real progress and I am very hopeful that we will get there by 2050 in terms of reversing it. In biodiversity we are not sure of the damage we have done. This could potentially be as big an issue as climate change in the next decade.”
He points to the international Task Force for Nature-related Financial Disclosures (TNFD) that is creating reporting standards for biodiversity and natural capital in order to “steer finance towards outcomes that are nature-positive”. “That could be a very powerful tool to help in this area,” he adds.
4. Green home premium
There may come a time when not only will homes with high energy ratings be more valuable but when you won’t be able to sell a house with a bad rating. “The European Central Bank and the European Banking Authority are changing the rules around lending quite fundamentally,” says Prendiville. “Under the Green Deal, the commission is encouraging banks to get into green lending and investing. It’s going to take a while but anyone with a poorly rated home might have difficulty in selling it as buyers won’t be able to get a mortgage and if they do it will be very expensive.”
5. Circular economy
The three Rs of the circular economy – reduce, reuse and recycle – could well be the mantra for the 2020s. “The circular economy will require Irish people to be much more conscious of where something comes from and of the whole of its life after it goes through their hands,” says Prendiville.
“Do we know where our recycling goes? Do we know what happens to it in the end? We need to redesign products for circularity but that’s up to the manufacturers and producers. We need incentives to get there. We were well-ahead of other countries when it came to single-use plastics and we can lead in the circular economy as well.”
“There will be opportunities for innovation, for start-ups to disrupt and challenge big companies who are slower to change,” O’Kennedy adds. “We can see it already in the clothing industry and fast fashion. The French brought in a new labelling system to measure the circularity and repairability of electrical goods. The UK is looking at right-to-repair legislation meaning companies will have to provide spare parts and manufacture certain products with a view to repairability.”