Sustainable practices power business growth

Dr Claire Guy explores how Irish companies can reduce costs, boost reputation, and gain market share through eco-friendly practices

Being environmentally friendly is not only good for the planet, but also for the bottom line.

Businesses that adopt sustainable practices can reduce their costs, improve their reputation, and gain a competitive edge in the market.

Additionally, sustainability is increasingly becoming a legal requirement, as both Ireland and the EU have set ambitious targets and regulations to combat climate change and environmental degradation.

Regulatory framework

Ireland’s Climate Action Plan 2024 outlines Ireland’s commitment to achieving a 51 percent reduction in greenhouse gas emissions by 2030, compared to 2018 levels.

The European Green Deal commits to delivering net-zero GHG emissions at EU level by 2050; with Ireland committed to achieving net-zero emissions no later than 2050.

These ambitious targets require significant investment and changes across various sectors, including energy, agriculture, and transport.

For businesses, this means adapting to stricter environmental regulations and investing in sustainable practices.

Companies now need to innovate and adopt greener technologies to meet these targets, which may initially increase operational costs but also present new opportunities for growth and competitiveness in a low-carbon economy. 

The transition to a more sustainable business model is not just a regulatory requirement but also a strategic move to future-proof businesses against the impacts of climate change.

To meet the 51 percent reduction in greenhouse gas emissions by 2030, Ireland has agreed to several specific sectoral targets, including:

• Electricity: 75 percent greenhouse gas reduction by 2030;
• Transport: 50 percent greenhouse gas reduction by 2030;
• Industry/enterprise: 35 percent greenhouse gas reduction by 2030; and
• Agriculture: 25 percent greenhouse gas reduction by 2030.

Meeting these target reductions is a journey which presents challenges and opportunities for Irish businesses. 

Businesses are now encouraged to set science-based targets (SBTs) and develop comprehensive company-specific climate action plans, covering everything from resource efficiency to supply chain, to achieve these goals and transition to a low-carbon, circular economy. 

These targets involve measuring and reducing emissions across all scopes (Scope 1 relates to direct emissions from an organisation’s facilities, Scope 2 relates to emissions from energy purchased by the organisation, and Scope 3 relates to other indirect emissions, such as those from suppliers and the use of the organisation’s products), investing in renewable energy, improving energy efficiency, and innovating sustainable practices.

Benefits to Irish businesses

Going green offers several benefits to Irish businesses, both economically and environmentally. Here are some key advantages:

1. Economic resilience: The need to reduce our reliance on fossil fuels was especially highlighted by global events like the war in Ukraine. By investing in green technologies and practices, Ireland aims to build a more resilient and self-sufficient economy.
2. Circular economy: Ireland is promoting a circular economy, which involves reusing and recycling materials to minimise waste. This approach not only benefits the environment but also offers significant cost savings for businesses. Companies like IKEA are now transitioning towards a circular business, aiming to give products and materials a longer life through reuse, refurbishment, remanufacturing, and recycling. The company designs products with circular capabilities and uses renewable or recycled materials. Their sustainability strategy includes becoming a fully circular business by 2030.
3. Cost savings: Implementing sustainable practices can lead to significant cost reductions. For example, energy-efficient technologies and waste-reduction strategies can lower utility and disposal costs.
4. Attracting talent: A survey by IBM showed that 67 percent of people are more willing to apply for jobs from organisations they consider to be environmentally sustainable and environmentally responsible. By going green, businesses can attract and retain top talent who value sustainability.
5. Customer demand: 75 percent of Irish consumers think that climate change and its consequences are the biggest challenges for humanity in the 21st century, and have turned to sustainable products and services. Meeting these demands can help businesses win new customers and increase loyalty.
6. Investment and funding: Sustainable businesses are more likely to attract investment and funding. There are various grants and supports available for businesses that commit to green practices in Ireland.
7. Compliance and futureproofing: As regulations around environmental impact become stricter, businesses that adopt green practices early will be better prepared to comply with future laws and standards.
8. Reputation and brand image: Being known as a sustainable business can enhance a company’s reputation and brand image, making it more appealing to both customers and partners. For example, Kellogg’s aims to use 100 percent recyclable, reusable or compostable packaging by the end of 2025 to align its business with circular economy principles, as well as strengthen its green reputation and brand.
9. Global market access: Many international supply chains now require sustainability from their partners. Going green can open new markets and opportunities for Irish businesses.

Whether a business is furthering its journey towards sustainability or just beginning to take serious steps in that direction, various aids are available from Ireland and the EU. These supports facilitate progression towards more eco-friendly operations and foster employee participation in these initiatives.

Dr Clare Guy is a Senior Consultant at KPMG