Irish companies are bottom of the table when it comes to investing in energy-efficiency measures, according to a major new study from the European Investment Bank (EIB).
Businesses in the Republic of Ireland invested just 6 per cent of their budgets in such measures last year, leaving the State, along with Greece, as the worst performers in the EU. By comparison, French companies put aside 19 per cent of their investment budgets for initiatives of this kind.
Irish and Greek firms were also the worst for investments aimed at addressing climate change, with just 19 per cent of indigenous companies putting money towards this, slightly above the Greek figure of 18 per cent. Finnish firms invested 62 per cent in measures, while the EU average stood at 45 per cent.
In a country-by-country analysis, the EIB found no positives at all in Irish companies’ moves to address environmental issues. Just 14 per cent of businesses perceived climate change to have a major impact on their business, versus and EU average of 23 per cent.
In addition, 24 per cent of companies forecast that environmental transitions would positively impact on demand and reputation, with the largest concerns expressed relating to supply chain issues.
The share of firms that say they are investing or planning to invest to tackle climate change is lower than the EU average at just 33 per cent of companies intending to put aside money for it. Uncertainty about climate impacts was the most cited obstacle hindering investment in measures to fight environmental issues, the study found.
The EIB study shows that 19 per cent of Irish businesses have set climate targets, compared to an EU average of 41 per cent.
Additionally, just 10 per cent of companies have dedicated climate staff compared to the EU average of 23 per cent.
Around two-thirds of Irish companies say they are concerned about energy costs. That is considerably higher that the 36 per cent across the EU. However, just 36 per cent of businesses in Ireland have conducted an energy audit.
Nearly half of businesses in the EU have invested in energy efficiency, according to the report, up from 37 per cent in 2019 and 47 per cent last year. This marks an increase in investment versus their counterparts in the US.
Although EU firms show commitment, enhancing their awareness of climate change-related risks will be key to greater climate investment, the study authors said.
"The catastrophic rainfalls and terrible loss of life this summer should leave no doubt that climate change is happening. We can no longer afford a wait-and-see attitude," said EIB vice-president Ricardo Mourinho Félix.
“Our latest study shows that if we want the transition to a greener economy to succeed, raising awareness of those risks matters: EU firms that understand those risks are more likely to invest in climate action.”