Irish arms of US firms are leaders in the transition to sustainability

Advancing the sustainability agenda is a priority for American Chamber of Commerce Ireland (AmCham) members, who have shown a proactive approach to corporate sustainability. According to a recent survey, 42 per cent of AmCham members aim to be carbon neutral by 2030, with this rising to 64 per cent by 2040.

Cathal Noone, partner at Deloitte, says US companies have always played an important role in driving the sustainability agenda. “As we reach a tipping point for climate change, however, US companies act as leaders in setting the sustainability agenda in Ireland and influence the wider supply chain as they seek to reduce their Scope 2 and 3 [of the the Greenhouse Gas Protocol] emissions.”

Since the introduction of the Inflation Reduction Act in the United States, companies have seen a significant increase in support for innovation and investment in clean energy, climate mitigation and resilience, says Noone.

“This has also resulted in a change in corporate mindset and investment in technology transfer, which is benefiting Ireland and will likely push the Irish arms of US multinationals ahead of the rest when it comes to sustainability,” he explains.

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As these firms tend to be larger than home-grown businesses they are often better equipped to anticipate and respond to the growing requirements of investors and regulators, notes Dr Neil Walker, Ibec’s head of infrastructure, energy and environment. Indeed, for many of the larger organisations, their sheer size can mean a significant environmental impact when sustainability is embedded throughout their global operations.

A 2019 Ibec member survey on business readiness for the circular economy transition found that the biggest factor by far influencing awareness and preparation was firm size. Many smaller firms will be indirectly impacted by virtue of being in the supply chains of the larger ones, adds Walker.

“This means large firms, including US multinationals, can leverage their impact, creating an outsized impact on the wider Irish and European business community,” he says.

PepsiCo is one of those firms. “As one of the world’s largest food and beverage companies, we see that the global food system is in urgent need of repair,” says Yaser Ghani, vice-president of operations, PepsiCo Ireland.

“Given our size and scale, we can have a unique and meaningful positive impact and help lead its transformation,” says Ghani.

Pep+ (pep-positive) is the organisation’s roadmap for becoming a leading actor in the transformation of the global food system. The initiative, Ghani explains, spans a wide range of sustainable practices, such as regenerative farming, a positive value chain with less waste and more circularity, and products with better nutritional and environment footprints.

PepsiCo is also aiming to achieve net-zero emissions across its value chain by 2040, become net water positive in high water-risk areas by 2030 and sustainably sourcing 100 per cent of its key ingredients by the same year.

“The long-term health of our business requires solutions for equitable growth within the Earth’s limits,” Ghani says. “Not only does pep+ drive sustainable long-term value and competitive advantage for PepsiCo, it also seeks to fundamentally transform business as usual for our industry.”

Coca-Cola is also working hard to embed sustainability across its entire operations, says Conor Neylan, head of public affairs, communications and sustainability with Coca-Cola Ireland.

“In Ireland, we’ve invested significantly in taking action to achieve our World Without Waste goals,” he says. “Within the past month, we have made the move to 100 per cent recycled plastic across our entire soft drinks range. This is a key sustainability milestone for Coca-Cola on the island of Ireland and will help eliminate more virgin plastic from circulation while lowering our carbon emissions footprint.”

Coca-Cola’s World Without Waste strategy includes an ambitious commitment to collect one bottle or can for every one it sells by 2030.

“This is being achieved by driving circularity, investing in product innovation and reducing our packaging footprint. As we journey to a net-zero future it’s clear that there is a global packaging waste problem and we have a responsibility to help solve it,” says Neylan.

Advancing sustainable production is also a key priority for the organisation, with commitments to reducing water usage and increasing the use of renewable energy. Earlier this year, Coca-Cola Ballina was named as one of the world’s most advanced manufacturers by the World Economic Forum.

“Through the use of innovative technology, the team at Coca-Cola Ballina has reduced its energy use by 29 per cent, bringing emissions back to 2011 levels, while increasing production,” says Neylan.

PM Group works with many large US multinational companies, helping them to measure their emissions and achieve their sustainability goals when constructing their manufacturing facilities. Eileen Lee, director of services delivery with the company, says a lack of good sustainability data holds many companies back from achieving their sustainability goals.

“Being able to accurately determine Scope 1, 2 and 3 value chain emissions is critical,” says Lee. “PM Group has been developing in-house projects and innovations as well as collaborating with clients and regulatory bodies to develop standard methodologies for sustainability data collection and use.”

As a delivery partner, PM Group has its own part to play in helping clients reduce their Scope 3 value chain emissions, adds Lee.

“It is estimated these emissions can account for over 90 per cent of an organisation’s carbon footprint. PM Group is a certified carbon neutral business,” she says.

In 2022 15 of PM Group’s projects, with a capital value of €1 billion, achieved Leadership in Energy and Environmental Design (LEED) Certification. “This is a significant challenge for industrial projects,” says Lee, who notes they also achieved 130,000 metric tonnes of carbon dioxide equivalent in savings on decarbonisation initiatives.

Schneider Electric’s country president Chris Collins says his company’s customers, many of which are US businesses, are looking to achieve their sustainability goals by adopting energy management practices that will allow them to transition to renewables.

“We collaborate with our customers to help them identify opportunities to reduce energy waste and environmental impact, recycle and adopt circular economy strategies, while also making more sustainable choices during production,” he explains. “We also provide customers with a suite of digital tools that monitor the performance of electrical installations to monitor and assess power consumption, while also tracking the life cycle of critical assets.”

These tools also allow for benchmarking, which is integral to helping organisations adopt off-grid solutions powered by renewable sources of energy such as wind, solar and even green hydrogen. Collins says Schneider Electric is heavily focused on helping its customers transition to renewables through the development of microgrids, aka self-contained facilities that allow them to generate their own electricity on site.

Investing in their own on-site renewable energy, which is becoming increasingly more prominent, is a brilliant example of how US companies are leading by example

—  Cathal Noone, Deloitte

He adds that Schneider Electric recently published a report in collaboration with Boston University which found that more than two million new jobs in Europe and the US could be created by adopting readily available clean energy technologies in new and retrofitted buildings.

Many businesses in Ireland have begun to utilise Corporate Power Purchase Agreements (CPPAs) to increase the proportion of power generated for their operations from renewable energy sources. Although they have been criticised, these types of agreements are essential in guaranteeing returns to businesses in the energy sector on very significant investments in green energy projects, Noone says.

“We need the US multinationals in Ireland to continue with this activity, to de-risk these projects which take a long time to cover the large upfront capital investment. Investing in their own on-site renewable energy, which is becoming increasingly more prominent, is a brilliant example of how US companies are leading by example.”

Yet Noone says that, in Ireland, the lack of supports that are comparable to the wide-ranging Inflation Reduction Act may ultimately hinder the speed at which Irish entities can achieve those goals.

“There is a greater need for Government incentives to increase the scale and pace of investment in sustainability projects in Ireland, to ensure that climate and carbon targets are met,” he says.

Legislation may differ between Europe and the US but Walker says that in the run-up to COP28 in Dubai next month it is vitally important that both jurisdictions act in a spirit of “co-operation rather than conflict”.

“Achieving net-zero emissions by 2050 will be a collective effort and responsible businesses on both sides of the Atlantic have a constructive role to play.”