Two fifths of Irish firms lack a dedicated sustainability function

Some 39% of Irish firms have no sustainability function in place, while just 21% have adopted a climate transition plan, a new study by A&L Goodbody has found.

The corporate law firm’s new ESG Report suggests that ‘many Irish companies remain unprepared for the legal requirements and obligations surrounding ESG compliance’, with around a third (34%) of businesses stating that they have not yet provided sustainability training for their employees.

In addition, just over half (52%) of the companies surveyed reported high board-level engagement on sustainability.

‘This lack of preparedness persists despite the EU’s Corporate Sustainability Reporting Directive (CSRD) becoming national law under the European Union (Corporate Sustainability Reporting) Regulations 2024 more than seven months ago,’ A&L Goodbody noted.

The role of sustainability

A notable takeaway from the study is that where sustainability functions have yet to be established in Irish companies, there is still confusion over its role within the business – it may fall under compliance, HR, legal, procurement, operations or other technical responsibilities.

Larger firms, however, tend to have a dedicated sustainability function within their businesses, with 76% of companies valued at over €450 million boasting this function.

Other findings include that six in ten businesses (60%) said that they are exploring IT and AI solutions to assist with their sustainability reporting, while 77% are concerned about the risk of greenwashing.

‘Knowledge gaps’

“Our research highlights the urgency for Irish companies to bridge their knowledge gaps regarding ESG-related legal requirements,” commented Jill Shaw, ESG and sustainability lead at A&L Goodbody. “While the upcoming omnibus package on sustainability promises to simplify obligations, its impact remains to be seen. There is also a risk that streamlining these regulations could ultimately raise the compliance bar for affected companies. Keeping a close watch on policy developments will be crucial.”

Shaw added that as sustainability-related policies evolve, the onus is on firms to understand the impact of said policies on their operations.

“Proactively tracking regulatory and policy developments and establishing cross-functional groups can ensure that organisations are aware of and preparing for evolving ESG requirements,” she said. “Companies that prioritise ESG considerations will reap the rewards when it comes to unlocking business opportunities and enhancing their reputation.” Read more here.