Turning ESG from mandatory to mindset

The theme ‘Are you prepared for the changing regulatory environment?’ attracted a busy and industrious crowd to the ESG Summit 2024 on Tuesday, April 30.

In his role as summit chair, Joe Lynam, broadcaster and host of Breakfast Business at Newstalk, welcomed everyone, joking that they had arrived at “Croke Park, the home of Leinster rugby”, where the Champions Cup semi-final is due to be held.

It was a tiny bit of levity needed to lighten a serious and pressing topic, with climate change and environmental issues being the through-line of the day’s discussions.

The early morning set the tone by delving into net zero and what needs to be done to achieve it. The morning address focused on keeping up the pace and momentum to achieve net zero and tackle climate change.

David Donoghue, a board member of Trócaire, former ambassador and chair of the International Programmes Advisory Committee, and Marie C Donnelly, chairperson of the Climate Change Advisory Council, gave the opening addresses.

With a wealth of experience in diplomacy, including being a key negotiator of the Good Friday Agreement, Donoghue talked about his work in developing the UN’s Sustainable Development Goals (SDGs), which all 195 countries signed in agreement and what that means going forward.

Donnelly spoke about Ireland’s role as a serious actor on a global scale, providing an overview of how well it’s been doing in meeting its own commitments, highlighting its advantageous position with natural resources.

“When we had the Industrial Revolution, we didn’t have coal, and it passed us by,” she said. This time, we have natural resources: wind, solar and marine. We have the technology to capture that and make it usable.”

Following up on this address was Yvonne McCarthy, head of the climate change unit at the Central Bank of Ireland, who gave the financial perspective on net zero transition. Mentioning that the EU alone would have to spend up to €700 billion to reach its net zero target, she highlighted the need for substantial financial investment to help address this challenge.

While that was bad news, she said the sustainable finance framework will help lead to better outcomes, provided the standards are clearly set.

“In truth, if we don’t agree on the principles or the definitions [through] which to define these activities,you can see some misleading developments in sustainable finance,” she explained.

“Some people might think they’re investing in green but aren’t, and that’s where the importance of a sustainable finance framework comes in.”

The first fireside chat of the day looked at the acceleration of Ireland’s energy transition with Chris Collins, country president of Ireland at Schneider Electric and Dr John Reilly, head of renewable energy at Bord na Móna.

Collins said companies need to rethink how they generate and consume power. At the same time, while the sustainability commitment here is more visible than in the US, the speed of change needs to increase.

“We have been running a marathon, and now it’s time to sprint,” he said. “What that means is we need a massive investment . . . and I don’t think it’s a money problem but the speed of planning and pace. We have to do it faster.”

Before the coffee break, the first panel session of the day began, with attention on turning our net zero ambitions into reality.

The panel included Andrew Miller, chief executive of Folens; Les O’Reilly, managed services country lead at HP Ireland; Louise O’Mahony, head of sustainable banking at the Banking & Payments Federation (BPFI); and Mary Lyons, director of enterprise in employees and skills at Solas.

In Solas’s line of work, Lyons highlighted the ripple effects education can have in helping companies improve their thinking.

“We find a big result from even just one person in a company availing of further education training opportunities in climate,” she mentioned. “Because when they return, it has a knock-on effect, particularly influencing leadership to look at all the business processes.

“It encourages management to work across the company, not just in a specific area, ensuring the whole company is climate literate.”

O’Reilly added to this by saying there’s a massive opportunity for indigenous Irish companies to use learned development to help with areas like governance to improve their carbon emissions.

Making businesses ESG friendly

Once the morning networking and exhibition viewing was done and dusted, the summit split into three streams, each taking a deep dive into a particular topic. The three streams focused on business and biodiversity, decarbonising your value chain, and creating an ESG-friendly business.

The first stream on biodiversity had Lynam as chair, and the keynote speech was given by Mieke Siebers, executive director at the Foundation for Sustainable Development (FSD) in the Netherlands.

Other talks were by Lucy Gaffney, platform manager at Business for Biodiversity, a case study by Geoff Hamilton, sustainability project manager at ESB Networks, and a fireside chat about nature-themed reporting with Garrett Quinn, chief sustainability officer of Smurfit Kappa.

It concluded with a panel discussion on the impact of TNFD on investment decisions (the Taskforce for Nature-related Financial Disclosures), which included Aebhín Cawley, chief executive and founder of Scott Cawley, Alan Costello, partner at Resolve Ventures, and Finian Power, head of ESG policy and regulation at First Sentier Investors.

The second stream on decarbonisation was chaired by Brian O’Kennedy, managing director at Goodbody Clearstream.

It began with case studies from Dr Ruth Kerrigan, chief operations officer of Environmental Solutions Ltd, and Stephen Tummon, sustainability programme manager at DPD Ireland.

Dr Rory Sullivan, chief executive of Chronos Sustainability, spoke about transition planning, which led to a fireside chat about the circular economy delivered by Dr John Gallagher, assistant professor of environmental systems modelling in the School of Engineering at TCD.

It concluded with a panel discussion on managing carbon emissions across the value chain.This featured Andrea Carroll, group head of sustainability at daa, Cathal Foley, chief executive of Pace Fexco, Enda Buckley, director of sustainability at Carbery Group, and Siobhán Dunphy, founder of Bon+Berg.

The final stream on ESG-friendly business was chaired by Aedín O’Leary, independent non-executive director at Investment & ESG consultant.

It began with two talks on empowering Irish enterprises, featuring Joanne Sheahan, senior executive of Enterprise Ireland’s sustainability and renewable energy team, and Nessa Whelan, country manager for Ireland at the UN Global Compact.

Next, Lyons from Solas returned to speak, followed by Lyndsey Simpson, founder and chief executive of British company 55/Redefined, who delivered the keynote talk on ESG and age inclusion.

It wrapped up with a panel discussion on being a change-maker and a BCorp, chaired by Sarah Blake of Earthology and included Daragh Anglim, head of impact at Broadlake, Derek Foley-Butler, chief executive of GRID Finance, Laura Costello, head of sustainability and planet services at ThinkHouse.

Joining the dots

Everyone returned to the main room for afternoon talks, where Paul White, partner in corporate and M&A at A&L Goodbody, kicked things off. He covered the future of sustainability reporting and provided a comprehensive overview of its future.

The afternoon keynote focused on benchmarking business and human rights in Ireland, and was delivered by Benn Hogan, manager of human rights and sustainability at Mazars UK. He recommended that those attending approach this topic with a risk-to-people mindset and make it part of their operational process strategy.

The very fact that everyone has to report in the same transparent, consistent way is driving action

A panel discussion of Corporate Sustainability Reporting (CSR), which is a mandatory requirement for large and listed companies, wrapped things up.

In this session was Anna Brog, head of sustainability at Kenmare Resources plc; Jill Shaw, ESG & sustainability lead at A&L Goodbody; Laura Heuston, co-founder of SustainabilityWorks; and Nicola Woods, chief transformation officer of An Post.

With the CS3D (Corporate Sustainability Due Diligence Directive) recently passed by the European Parliament and CSRD (Corporate Sustainability Reporting Directive) in effect since 2023, the legal landscape now tees companies up to make sustainability a core part of their business processes.

Heuston said CSRD was a net positive as it pushed many companies that still needed to report to do so.

“The very fact that everyone has to report in the same transparent, consistent way is driving action and will have a really positive impact for sustainability,” she said. “For corporates that weren’t, it wasn’t reaching board level and getting the attention it needed. Now it’s a regulatory staple of reporting and we’re seeing driving action and thinking.”

Shaw added that directives like the CS3D are a real opportunity for companies to take stock of their governance practices and reframe their mindset. “Reporting is good, but it can only go so far if organisations don’t join the dots”.

“One of the things we’re seeing is people aren’t necessarily equating the really positive actions they’re taking, say, on environmental issues or energy efficiency, with the reporting they will have to do under CS3D.

“There is a disconnect at the moment with people seeing it as a reporting regime versus what they’re doing in practice, and this is where the collaboration piece is critical,”

There was much food for thought as attendees left the hall, and with the next ESG summit happening on 20th November, it’s hoped that the day will galvanise those attending to pick up the pace.