“Sustainability and greening business is currently a top three agenda item for every board of directors,” said Ross Moore, Energy, Infrastructure and Natural Resources group partner at A&L Goodbody and co. -Head of the company’s Climate Action group.
“Numerous polls confirm this. Depending on the nature of the business, this may include how an organization mobilizes its funding – the green lending path – where banks grant loans to businesses based on meeting certain green criteria.
“We see companies pursuing sustainability strategies around the types of investments they make and, for example, only investing money in sustainable projects. On the retail side, we are witnessing the advent of green financial products. Pensions are increasingly linked to green investments and on top of all this companies are required to speak the “green language” to consumers.
“There are also implications for how companies engage with suppliers, how they manage their business and their own carbon footprint. Fundamentally, companies increasingly need to make sure their own homes are in order when it comes to sustainability and broader ESG issues. “
Client expectations and demands are for companies to respond to climate change, said Alan Roberts, partner in the environmental law and planning group at A&L Goodbody and co-head of the firm’s Climate Action group.
“For example, AIB has been at the forefront of a multitude of green products and our energy companies are increasingly selling us green energy,” he said. “Even sectors such as oil and gas which are in the crosshairs of carbon reduction targets and measures are moving towards the renewable energy market.”
There are very positive impacts on a company’s performance when it goes green, Roberts said. “Companies that are seen as responding properly and authentically to demands for climate action have greater investor demand, access to increased mutual funds on more favorable terms and rates, have better employee and talent engagement. potential and deeper customer loyalty, ”he said.
A&L Goodbody has engaged with companies across all industries to deliver on the climate action agenda, Moore said. A huge amount of policy and legislation is underway, ranging from European and national initiatives to United Nations initiatives.
“If you take the example of the European Green Deal, it is clear that no area of our economy will be spared to achieve the 2050 targets. This affects everything from clean energy to biodiversity to taxation. , digital transformation and the built environment.
“A lot of what we do is about strict legal advice. But we’re also looking at the horizon, and as businesses take a look at what’s to come, we can give them some advice on what they need to be aware of so they can strategize, prepare, and capitalize on. of all the resulting opportunities. “
Laura Butler, A&L Goodbody Asset Management and Investment Funds Partner, said: “Working on the asset management and investment fund side means that the imperatives of climate change hit us immediately.
“Transparency has always been vital for investors and recent developments such as the EU’s Sustainable Finance Disclosure Regulation (SFDR) are part of a larger set of laws introduced by the European Commission as part of of its action plan on sustainable finance. “
The SFDR is the framework on which regulatory technical standards will be set and describes how the investment fund industry will take into account the information it discloses to investors on sustainability and ESG matters.
“This means that across Europe the terminology, level and quality of information provided to investors regarding the sustainability of potential investment opportunities is consistent,” said Butler.
“The first phase of the SFDR takes effect on March 10 and we have been working closely with customers to help them comply. This is a real radical change that we will see more and more over the next couple of years. “
Roberts said: “Internationally, climate disputes have emerged strongly over the past five to ten years. We know that in the future a company’s actions will now be valued in hindsight and that a company that takes a business-as-usual approach will be seen as having underestimated the risks and what is needed to cope. to climate risk. “
Moore said business people have done a lot of soul searching over the past year. “Climate change and the global imperatives surrounding it represent a financial and business risk for businesses. It should be prioritized like any other basic business or financial risk. “
Butler said: “The political will that exists at the European level means that there is little scope to get around climate action now.”