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‘Innovation and collaboration are key to carbon reduction goals’

Decarbonisation of facility operations and resource efficiency are key focus areas for global leading multinationals operating in Ireland

The corporate sector has a crucial role to play in fighting climate change and US multinationals in Ireland are at the forefront of the sustainability agenda. According to a recent survey of AmCham members, 42 per cent of respondents aim to be carbon neutral by 2030, rising to 64 per cent by 2040.

It’s evident that businesses are taking major steps to meet their own sustainability targets, and these invariably align closely with national and global targets when it comes to reducing overall carbon emissions. The use of innovative technologies will be critical to achieving these goals, and the Government’s wider goal of transitioning to a carbon neutral economy by 2050.

PM Group manages the design, construction and commissioning of high-tech facilities, working with world leaders in the pharma, food, data centre and medical technology sectors. Dr Barry McDermott, group head of sustainability, says their clients, which include some of the world’s largest manufacturing companies, are increasingly conscious and proactive when it comes to reducing their climate emissions and dependence on fossil fuels.

“Many of our clients define sustainability in line with the United Nations framework for Sustainable Development, which includes the more holistic themes of environmental protection, social equity, economic prosperity and ethical governance,” he explains. “All our clients have corporate sustainability goals, specifically around climate change, carbon emissions and water use reduction.”


From carbon neutral to net zero

Businesses are moving from carbon neutral – which may include offsetting – to net zero with the adoption of science-based reduction targets, including, for example, a 50 per cent reduction in Scope 1 and 2 emissions by 2030. “In simple terms, low-carbon manufacturing requires a low-carbon supply chain and decarbonised energy and utilities for manufacturing operations,” McDermott explains. The transition to net zero requires a reduction in all scope categories of emissions, ie Scope 1, 2 and 3. Scope 3 value chain emissions can account for over 90 per cent of an organisation’s carbon footprint.

As a result, decarbonisation of facility operations and resource efficiency have become “immediate key focus areas”, McDermott says. “We are now providing carbon emissions calculation, low-carbon and energy efficiency technology selection and decarbonisation roadmap planning for a wide range of clients.” The forthcoming EU Corporate Sustainability Reporting Directive, which will require mandatory reporting of operational carbon emissions, is accelerating these requests, he said.

Yet industry energy sources are still predominantly sourced from fossil fuel, and McDermott says PM Group is increasingly working with clients to reduce their energy consumption through a combination of energy efficiency and recovery measures and the development of renewable energy sources such as photovoltaics (PV), geothermal energy and biomethane, a substitute for natural gas.

An increasingly frequent request from their clients is whole-life carbon assessment, which involves calculating the embodied carbon of the building materials used in construction. Reporting these emissions will soon become a mandatory requirement for all new developments. “PM Group is working with clients to identify the key carbon emissions sources in building construction and developing design strategies, which include selecting low-carbon building materials, to lower the whole-life carbon emissions over a building lifetime,” explains McDermott.

There is currently a strong push from multinationals in Ireland for the Government to develop and support a domestic biomethane sector

—  Russell Smyth, KPMG in Ireland

To achieve net zero, collaboration across the supply chain is needed, he says. “The drive for net zero and low-carbon supply chains requires a lower carbon society and a more circular economy – which is good news for national climate targets.”

Yet, many businesses say more Government support and intervention is required if they are to achieve these targets. According to Russell Smyth, head of sustainable futures with KPMG in Ireland, multinationals want to see consistent, long-term policy which matches their own investment horizons, as well as policies which promote a diversity of decarbonisation technology options. “For example, while wind and solar allows them to decarbonise their electricity, there is currently a strong push from multinationals in Ireland for the Government to develop and support a domestic biomethane sector, which will provide them with access to renewable gas, which will also allow them to decarbonise their thermal energy needs,” he explains.

Innovation and collaboration

US multinationals in Ireland have been among the most proactive and ambitious companies in the country seeking to decarbonise their operations, Smyth says. “This can be evidenced by the volume of corporate power purchase agreements with Irish wind farms entered into by the likes of Meta and Amazon, far outstripping domestic companies, as well as ambitious undertakings such as Microsoft’s commitment to remove not only current but also historic carbon emissions by 2050.”

Smyth adds, however, that to date, multinationals haven’t been utilising some of the more common Government subsidies, with all corporate power purchase agreements signed in Ireland so far displacing the need for Government subsidy.

Innovation and collaboration are key to carbon-reduction goals, McDermott asserts. “Government can foster and encourage this by expanding schemes such as the Renewable Electricity Support Scheme (RESS) which provides financial support to renewable electricity projects,” he suggests. This could possibly be replicated for renewable biogas projects, he adds, which would be a win-win for both the agriculture sector as owners of natural biogas feedstock, and industry, which still relies heavily on natural gas for thermal processes.

In addition, the regulatory framework and infrastructure could be improved to facilitate easier exporting of excess renewable energy generation to the national grid – McDermott says this would encourage more energy generation by industry.

If Ireland does not facilitate such an ecosystem as the race against climate change heats up, what does it mean in terms of Ireland’s attractiveness as a destination for foreign direct investment? Smyth is unequivocal: “We expect this will become an increasingly common investment consideration for more and more corporates and will become a locational decision factor just as important as the tax regime or quality of the workforce.”

Danielle Barron

Danielle Barron is a contributor to The Irish Times