The illusion of progress is comforting and more dangerous than no progress at all

In the 12 months since the last eolas climate report, a number of important and critical successes have been achieved, writes Stephen Prendiville, Head of Sustainability at EY Ireland.

In Ireland, we set our sectoral breakdown of the carbon budgets and issued the Climate Action Plan 2023, the first plan fully aligned with our carbon budgets. ZEVI has been set up to drive the electrification of our transport sector and major public bodies have developed sustainability and decarbonisation strategies. In addition, green public procurement rules are about to be launched, and there is more to come in the way of strategy and roadmaps for various sectors and subsectors of the economy. Globally, we had agreements on biodiversity protection, protection of our oceans, agreement on the Loss and Damage Fund at COP27, and more.

In the corporate world, reporting obligations from the EU (EU Taxonomy, Corporate Sustainability Reporting Directive, Sustainable Finance Reporting Directive, etc.), UK, and the US, have placed significant pressure on corporate c-suites and finance functions to understand, collect, track, and report various climate and sustainability matters, with some rules kicking into full force in 2023.

Reforms of the European Emission Trading System, and the implementation of the Carbon Border Adjustment Mechanism scheduled for October 2023, are bringing the cost of carbon into stark relief. So too are investors and lenders, asking hard questions on the resilience and survivability of organisations in a decarbonised and sustainable future. The business ecosystem has needed to react to customer and consumer pressures, promising more shelf space for low emissions items at the expense of high emissions items. We have seen corporates engage with their supply chains, to strike new terms and conditions incorporating sustainability metrics and goals. Regulators in advertising standards are tightening up the rules to address the issue of greenwashing, with a hope that a stronger hand will enhance consumer confidence and protect those businesses that are making genuine efforts. At COP27, various significant philanthropic backers launched the Climate Trace, a satellite and AI-driven visualisation database of emissions by asset source. The tool was in equal parts welcomed as a new era of transparency and accountability, highlighting a real sense of urgency.

Yet, despite the expectation that the spike in energy prices and the threats of global economic slowdowns might curb emissions, emissions were up in 2022 in Ireland and many other countries. We have also learned that the Amazon rainforest experienced increased deforestation rates year-on-year, despite pledges to the contrary, and the Botanical Society of Britain and Ireland has advised us that we have lost over 50 per cent of our native plants this past 20 years.

Corporately, we learned that various “sustainability indices” were tantamount to a future promise rather than a reflection on the actual sustainability performance of some entities and we hear that many companies have taken to reviewing and weakening their goals and resorting to green hushing (no longer publishing what they are doing for fear of reprisals).

All of this is occurring against the backdrop of even more extreme and frequent weather events. Every continent has seen major floods, droughts, hurricanes, and typhoons, resulting in the loss of countless lives, and costing billions of euros in the past 12 months alone. According to the Global Report on Food Crises 2022, levels of hunger in 2021 surpassed all previous records, with close to 193 million people acutely food insecure and in need of urgent assistance across 53 countries/territories. This represents an increase of nearly 40 million people compared to the previous high reached in 2020.

Honing in on the connection between climate change and food security, we can see that environmental impacts pose a long-term threat. A 2°C temperature increase correlates to an expected 20 per cent decline of water availability for irrigation and other uses. Let us bear this in mind when our current trajectory suggests a 2.6°C increase by the end of this century. Every degree of warming will lead to between 10 per cent and 25 per cent loss in global yields of rice, maize, and wheat.

Our carbon budgets are effectively our minimum targets for decarbonising our economy. Two years into our first five-year carbon budget, there is little reduction in our emissions levels and the likelihood is that we will miss our minimum target in this budget period.

Despite these challenges we must remain committed to realising change. I am optimistic for what we can achieve in the next 12 months. The foundations for significant progress have been laid. The collective of the willing are coming together and are showing their commitment to advancing radical change.

The solutions we are looking for to progress towards a more sustainable future for all will not be found in reports or excel spreadsheets, it lies within our business community, our local communities and each of us as individuals.

E: sustainability@ie.ey.com
W: www.ey.com/ie/sustainability