ESG has become crucial for customer relations and for sourcing funding – but many Irish companies are dragging their feet, say industry experts

At our virtual conference early this year, all our speakers agreed on one thing: clear policies on ESG are fast becoming a key factor for successful businesses. But what is ESG, and why do Irish companies need to act now?

What is ESG?

ESG, or Environmental, Social, and (Corporate) Governance, are the three main areas of interest for socially responsible investors and customers. Companies with ESG policies agree to conduct themselves ethically in those three areas.

• Environmental considers environmental impact such as company’s energy use, sustainability practices, waste, pollution, and treatment of animals.
• Social criteria looks at relationships – with employees, suppliers, customers, and the communities where it operates.
• Governance deals with company policies, including transparency, equality and diversity, as well as issues like executive pay and shareholder rights.

Why is ESG relevant to Irish businesses?

The conference focused especially on what “green” will really mean for Irish businesses, from decarbonising costs to funding concerns, and included specialist advice on Enterprise Ireland’s supports for businesses looking to adapt and evolve.

John Mullins, Executive Chairman of Amarenco Solar, said that big changes are being driven by both governments and customers: “People are insisting that we, as businesses, do things ethically, morally and properly.”

People are increasingly aware of the ethics of brands they choose to buy, he says, but ESG isn’t just about customers. Businesses are increasingly being required to demonstrate their commitment to social responsibility to secure funding – companies considering finance for growth down the track need to act now, says John: “ESG is becoming a pre-requirement for businesses to conduct. Any company thinking of listing or attracting finance in the future are going to have to show non-financial credentials going back several years.”

John Finn, Managing Director at Treasury Solutions Ltd, agreed and noted many businesses were behind the trend. “Businesses can’t afford not to invest in sustainability but people don’t necessarily want to invest. We’re going to have to look at a completely new way of how we do business across the board – we’re coming to a new paradigm for business.” 

ESG supports and funding for Irish companies in 2022

For businesses considering change, Ann Marie Walsh, Development Advisor at Enterprise Ireland, spoke on available “Green” supports for businesses, including climate toolkits and the climate action voucher, including: 

1. Climate Action Voucher – €1,800 grant available to engage consultants to develop sustainability action plan
2. GreenStart – up to €5,000 to examine your business’s carbon footprint and introduce environmental best practice systems and structures
3. GreenPlus – up to 50% of training costs to align to international & develop a sustainability business plan
4. Level Project Toolkit –attract talent and improve performance through a practical Action Plan that addresses gender balance and leadership diversity 

She also advised that further sustainability supports for capital and infrastructure investment will be launched by Enterprise Ireland later this year.

Speaking at the conference, Paul O’Donovan said: “The pandemic has brought about much change; change in our habits, our attitudes, change in our workplace, and change in how people go about their work.”

Our speakers all emphasised that taking time now for strategic forward planning, and focusing on ESG, will differentiate the companies that adapt and thrive in changing times from those that react and stagnate.

Watch the full conference below: