The New Industrial Revolution - and the role of Irish SMEs

Máire Fay - June 2022

“When the well is dry, we know the worth of water.” In 2022, Benjamin Franklin’s words have never been more meaningful.

As a global community, we’ve known for a long time that the way we live and do business simply isn’t sustainable. However, human nature means we can feel inclined to avoid uncomfortable truths - we avoid what we perceive to be a threat to how we are used to doing business.

In a 2021 survey commissioned by Dublin Chamber with Amárach Research, we learned that 75% of Irish organisations are less than halfway into their journey of becoming more sustainable, with 36% saying that some steps had been taken but that there was a long way to go. The survey also told us that 70% of respondents did not have a strategy for environmental, social and governance reporting (ESG).

However, the EU Green Deal’s audacious goal of making Europe the first carbon-neutral continent by 2050 and the energy crisis catalysed by the Russian invasion of Ukraine means that change is already here. Change is now. It’s up to us as a modern society and business community to not just make the compulsory changes to which we are legally bound - but to figure out how to make that change work for us, it’s up to us to discover and leverage the commercial opportunities that lie within. 

The EU Green Deal has already been signed, sealed and will most certainly be delivered so now we must embrace the transformation and accept that the goal is for the significantly greater good - to restore and reinvigorate the well-being of the people, the planet, and the economy. The Deal is already being called the next industrial revolution so it’s important to note that it has been designed and created so that nobody is left behind. There are opportunities and benefits for all. However, it can be argued that we need more clarity and context around expectations and realistic goals for businesses, particularly SMEs.

There appears to be a mindset that having a sustainability strategy is primarily something to be addressed by larger companies and corporate businesses, but this is a narrative that we need to break. SMEs account for 70% of the Irish workforce and so have an essential role to play in having an impact on climate ambitions. SMEs are also more than entitled to reap the benefits and opportunities of making strategic change. And the opportunities are many. Research consistently shows that sustainability has real benefits when integrated into business operations. 

The first and most important for many is access to capital. The increasing level of due diligence being practised demonstrates that sustainable investment is already a key strategic commitment for most lenders and investors.

Businesses will also see an improved brand image and competitive advantage. According to Dublin Chamber’s survey, over a third of respondents said their organisation prioritises suppliers with sustainable and ethical practices. The demand for demonstrating a clean supply chain is ever-increasing also. 

This reputational advantage is valuable not only to our clients and stakeholders but also for recruiting the best talent. People want to work for companies that do the right thing and bringing your team on your sustainability journey can lead to better staff retention and boosted morale meaning optimum productivity and profit. 

Increased operational productivity and cost reduction are another key opportunity and for many businesses - the most important one. There is a misconception that sustainable business practices will be expensive and will affect profit, but research shows that the development of these practices streamlines effort and conserves valuable resources resulting in increased productivity and cost reduction. 

We must also acknowledge and understand the impact of the current energy crisis; it makes sense for businesses to implement efficiency measures in the short term and be prepared for a world where clean energy is a priority. We need to act now to avoid energy exposure. According to a recent survey by Electric Ireland, more than two-thirds of Irish SMEs surveyed said they wanted to reduce their carbon footprint, but 74% admitted they were unsure as to what steps they should take. 

2021 saw the launch of the government’s Climate Toolkit 4 Business which is a brilliant tool for Irish SMEs wanting to decarbonise and make sustainable choices but we need more visibility and training on ESG strategy. As great as it is to see businesses make small green changes, we also know that ad hoc initiatives do not demonstrate measurable results - strategy is key. Dr Declan Boggan, founder of SustHub says that “Building out and following a sustainability strategy allows you to focus all your efforts in the right place. To maximise the impact and value you can have.”

Deciding where to start building a sustainability strategy is a challenge for many Irish companies and this is where Dublin Chamber actively supports Irish businesses of all sizes. Dublin Chamber knows that ESG needs to be more than a byline in a company report. It needs to be strategic, robust and embedded into company ethos. 

Dublin Chamber with the support of sponsors AIB and educational partners SustHub have developed The Sustainability Academy, a unique skills initiative with one goal - to offer practical help and support for businesses who want to be sustainable and as a result, become more competitive, resilient, and successful. 

The academy is a series of online workshops that are catered to all needs at all levels. It will take participants through the basics in ‘Sustainability 101’ right through to building your sustainability strategy, efficient resource management, carbon footprinting, the circular economy, and more. Participation is subsidised and includes a post-workshop one-on-one session with climate experts SustHub. 

The Academy’s objective is to support businesses as they identify ESG issues and their impact on core strategy, the Academy workshops will then give participants the tools to operationalise their own ESG policies. This is an opportunity for business owners or senior management to upskill and implement change from the top or to develop a sustainability team and upskill a core group that will lead meaningful change from within.

As Mary Whitelaw, Director of Corporate Affairs, Strategy & Sustainability at AIB tells us “For any business looking to embark on their climate journey, understanding your own starting point and having an appropriate strategy alongside agreed targets to monitor delivery of that strategy are key components for success.”

Dublin Chamber also runs regular events and focus groups on sustainability to keep the business community informed and supported on sustainability issues.

Máire Fay is the Education Programme Manager at Dublin Chamber.

Visit dublinchamber.ie or contact maire@dublinchamber.ie for more information on The Sustainability Academy sponsored by AIB.