Ten Ways Ireland’s Next Government Can Accelerate Corporate Environmental Action

Climate change and nature breakdown pose profound risks to Ireland’s economy and society.

This year marks the 10th anniversary of the landmark Paris Agreement, a global accord to combat climate change by limiting global temperature rise since pre-industrial levels to well below 2°C above pre-industrial levels and pursuing efforts to cap it at 1.5°C. 

However, despite early optimism, progress has faltered. What might have been the beginning of a year celebrating progress on Paris is instead unlikely to be remembered fondly. Dystopian images of conflagrations in residential Los Angeles resulting in entire neighbourhoods being reduced to ashes remind us that nowhere is safe on a hothouse planet.  

The same week that LA experienced its most destructive wildfires yet, the EU’s Copernicus Institute underscored the urgency of action by announcing that 2024 was the hottest year ever recorded, the first year the average temperature exceeded 1.5°C, and every single one of the past 10 years has been one of the warmest 10 years ever recorded. 

January also marked the inauguration of Donald Trump, who has stated he will (again) withdraw the US from the Paris Agreement. President Trump enters office at a time when the politicisation of ESG and subsequent backlash against sustainable investing has led to a rollback of financial companies’ climate commitments, coming to a nadir with the Net Zero Asset Managers Coalition pausing activity indefinitely on January 13th. 

2025 will also mark 10 years since the enactment of Ireland’s Climate Action and Low Carbon Development Act, a pivotal milestone in the evolution of national climate change policy. The Act, amended in 2021, set legally binding targets to reduce emissions by 51% by 2030 and achieve net zero by 2050, based on 2018 levels. Yet, according to both the EPA and Climate Change Advisory Council, the country is on track to miss its first two carbon budgets by a significant margin, risking both fines and economic setbacks. 

What’s more, 85% of Ireland’s habitats are in an unfavourable state. The EU Nature Restoration Law which was enacted in June last year sets binding targets to restore degraded ecosystems, particularly those with the most potential to capture and store carbon and under the Law, Ireland is required to submit a Nature Restoration Plan to the European Commission by 2026. 

This context presents a stark backdrop to the publication of the draft of the next Programme for Government, the crucial document that h will set the direction of travel of Ireland’s decarbonisation and nature restoration journey for the next five years. 

Businesses in Ireland are already taking steps to play their part, with many adopting science-based emissions reduction targets, decarbonising supply chains, and integrating the Climate Action Plan into their strategies. They should be seen as a key partner in national environmental efforts. 

However, without strong government leadership, the business community’s efforts risk being undermined by uneven competition, inadequate infrastructure, and a lack of regulatory certainty. 

Here are ten ways Ireland’s next government can support businesses in accelerating climate and nature action: 

  1. Reaffirm climate and nature commitments

Clear, consistent targets provide business with the certainty it needs to invest in sustainable innovation. The next government should reiterate Ireland’s legally binding climate goals, including a 51% reduction in emissions by 2030 and net-zero by 2050, and its commitment to the actions in the National Biodiversity Action Plan 2023-2027. It is imperative that the next government does not row back on the targets set out in the EU Nature Restoration law and provides the necessary funding for nature restoration and conservation in Ireland. 

  1. Accelerate the roll-out of clean energy infrastructure

The grid needs upgrading to accommodate the expansion of renewable energy, especially intermittent sources like wind and solar. The next government should develop a national electrification strategy, streamline planning for clean energy projects, prioritise renewable energy over fossil fuels, decarbonise heat, and incentivise energy storage to ensure efficiency.  

It should also ensure over-installation of renewables to accommodate intermittent production and avoid waste. October 2024 logged the third highest volume of wind energy ever produced in Ireland, but one fifth of it could not be used. Instead of dispatching down, the government should focus on enabling industry to bring this energy directly to those in energy poverty. 

  1. Invest in decarbonisation

The next government should prioritise investment in decarbonisation in order to avoid future EU non-compliance fines, estimated to reach €20 billion, and the Infrastructure, Climate, and Nature Fund should be protected and expanded. Ireland’s reliance on fossil fuels currently costs €10 billion annually—funds that would be better spent on building a resilient clean energy system. This would increase resilience and energy security, and result in better health from less pollution. It would also lower business energy costs, and important consideration given businesses have faced increasing costs in recent years due to energy price volatility, inflation, and important but nevertheless challenging policy changes to pensions and PRSI.  

Acting now makes sense, as inaction could potentially result in fines that would effectively erode some of the value of the Infrastructure, Climate and Nature Fund. 

  1. Phase out fossil fuels and avoid fossil fuel lock-in

Increased government investment in fossil fuel infrastructure risks infrastructure lock-in and stranded assets, both of which pose unnecessary danger to business. Experience has shown us that genuine energy security come from an abundance of clean, renewable, secure energy. 

The next government should commit to phasing out fossil fuel reliance by 2039, as per the Climate Change Advisory Council’s recommendation, and should redirect the €1 million per hour spent on fossil fuel imports to clean energy projects, reducing risks and costs, and fostering energy security. 

  1. Streamline approvals for sustainable innovations

Certain sustainable products and technologies, widely available across Europe, face delays in certification and insurance in Ireland. Speeding up these processes would allow companies to more rapidly adopt cutting-edge material and methods that contribute to reaching our national climate objective.  

The next government must accelerate the certification and insurance processes for bringing more sustainable materials or technologies to market. This will enable businesses to adopt solutions that reduce emissions and improve efficiency more quickly. 

  1. Strengthen incentives and penalties

It is important to ensure that performance in reducing emissions is rewarded, not just disclosure or compliance, given disclosure does not necessarily lead to emissions reduction. New supranational regulatory frameworks such as CSRD, which is focused on disclosure, provide a golden opportunity to consolidate and strengthen national climate policy and legislation, and incentivise businesses to disclose and reduce emissions simultaneously 

The next government should develop a regulatory framework that rewards emissions reductions and penalises non-compliance with the carbon budgets. It can do this by requiring companies to connect their emissions with the national carbon budgets and disclose their double materiality assessments, which analyse both a company’s financial and environmental impacts.  

  1. Decarbonise Supply Chains

Over 90% of business emissions are in the Scope 3 category, meaning they are not emissions directly used or purchased by the company but instead upstream and downstream of their activity. However, there is no one size fits all model for supplier engagement. While numerous tools and supports exist, SMEs often find it challenging to navigate them effectively. 

The next government should support SMEs to reduce emissions via tailored training (in terms of SME size and sector) and one-on-one engagement, empowering small enterprises to contribute meaningfully to national climate objectives.  

  1. Build Sustainability Skills of the Workforce

Given the cross-border operations of so many of our indigenous businesses, the next government should launch an all-island skills action plan to address talent shortages in emerging green industries in both North and South jurisdictions. This would involve collaborating with educational institutions, government departments, professional bodies and industry to develop programmes that prepare workers for sustainable practices and technologies.  

  1. Promote the Development of Climate Transition Plans

The next government should encourage businesses to create Climate Transition Plans – holistic, iterative action plans developed in consultation with various business functions, which describe a business’ strategy to transition its business model, processes and operations to align with a pathway for reaching net zero by 2050 at the latest.  

It should support initiatives like Business in the Community Ireland’s Accelerate Pact to provide resources and guidance, and include these supports in future Climate Action Plans. 

  1. Foster Collaboration for Collective Action

Climate change is a collective action problem that requires action at multiple levels and from multiple sectors. The 2021 amendment to the 2015 Climate Act included a commitment to develop Sectoral Emissions Ceilings for each sector of the economy, which recalibrate every five years based on the progress made. A lack of progress in one sector means other sectors must carry the load, spurring co-benefits of collaboration for all.  

The next government should establish forums where businesses, policymakers, and stakeholders can collaborate to reach sectoral emissions targets and develop shared socioeconomic visions for a net-zero Ireland. It should expand the remit of the Department of Enterprise, Trade & Employment’s Enterprise Forum to include how business might use sectoral carbon budgets as a tool for decarbonisation and strengthen cross-sectoral partnerships to ensure equitable progress in the achievement of carbon budgets. 

Conclusion 

Businesses have a stake in a safe and stable environment. The Los Angeles wildfires are estimated to cost California upwards of $57 billion, with insurance losses estimated at $20 billion minimum. Globally, $44 trillion—half of global GDP—is at risk from nature loss. 

Climate change and nature loss pose profound risks to Ireland’s economy and society. But with decisive action, and strategic leveraging of its ample resources including a healthy budget surplus, trade surplus, and significant business ambition, the next government can empower businesses to lead the charge in achieving national and global environmental targets and position Ireland Inc. as a leader in the transition to a resilient, low-carbon, and nature-positive economy.  

 

Sources: 

O’Dochartaigh, A. and Pringle, A. (2024). Carbon Budgets: Opportunities and Challenges for Irish Business. DCU Business School, Dublin.  

Business in the Community (2024). Recommendations to achieve a sustainable and socially inclusive society. 

Business in the Community (2024). All Ireland Climate Action Pilot Programme for Small and Medium sized Enterprises (SMEs) Insights Paper  

Maynooth University, 20FIFTY PARTNERS, Business in the Community Ireland (2024). Sustainability Capabilities for Business Leaders: Guiding leaders to pioneer the transition to sustainable business outcomes  

PwC (2024). Business Working Together for a Low Carbon Future: PwC’s 6th Annual Report on the Business in the Community Ireland (BITCI) Low Carbon Pledge.