Irish firms unprepared for ESG requirements and legislation - new research from A&L Goodbody finds
- four in ten (39%) Irish organisations don’t have a sustainability function
- only one in five (21%) have adopted a climate transition plan
- over a third (34%) of organisations have not trained their employees on sustainability and ESG issues
- six in ten (60%) are exploring IT or AI solutions to help with sustainability reporting
Almost four in ten (39%) Irish organisations still lack a dedicated sustainability function, while only one in five (21%) have adopted a climate transition plan, according to a new ESG report from A&L Goodbody. The findings from the research report launched today, suggest that many Irish companies remain unprepared for the legal requirements and obligations surrounding ESG compliance.
Further insights from the report reveal that over a third (34%) of Irish organisations have not provided sustainability or ESG training for their employees. Just over half (52%) of those surveyed report high board-level engagement on sustainability, leaving nearly half of corporate boards without full commitment to these critical issues. This lack of preparedness persists despite the EU’s Corporate Sustainability Reporting Directive (CSRD) becoming national law under the European Union (Corporate Sustainability Reporting) Regulations 2024 more than seven months ago.
The research further found that where the sustainability function has not been established in Irish companies, there is no consistent home for sustainability, for example, it may fall under compliance, HR, legal, procurement, operations, technical, to name a few. Larger businesses were, however, more likely to have a separate function, with 76% of companies valued at over €450m reporting a designated sustainability function.
When it comes to climate transition plans, the report finds that only 21% of companies have already developed one, with larger firms more likely to have done so. Alarmingly, nearly a third (31%) of businesses have no plan in place at all. Meanwhile, 69% of companies have implemented a due diligence policy regarding their business partners, yet one in five (20%) have no such policy, and 11% of respondents were uncertain.
Concerns about ESG compliance extend beyond internal policies. Almost eight in ten (77% of) Irish organisations expressed significant concern about the risks of greenwashing, highlighting the need for clear and credible sustainability strategies.
A&L Goodbody’s research comes ahead of the first omnibus package on sustainability, anticipated to be published next week, aimed at simplifying sustainability-related reporting and due diligence obligations. This comes as six in ten (60%) of those surveyed said they are exploring IT or AI solutions to help with their sustainability reporting. This package is one of a series of packages that will be published throughout 2025 that seek to reduce the administrative burdens placed on companies, including those relating to reporting, by at least 25% for all companies and at least 35% for SMEs. The first package includes simplification of reporting related to sustainable finance, sustainability due diligence and taxonomy.
Jill Shaw, ESG & Sustainability Lead at A&L Goodbody, commented on the findings:
“Our research highlights the urgency for Irish companies to bridge their knowledge gaps regarding ESG-related legal requirements. While the upcoming omnibus package on sustainability promises to simplify obligations, its impact remains to be seen. There is also a risk that streamlining these regulations could ultimately raise the compliance bar for affected companies. Keeping a close watch on policy developments will be crucial.
"As ESG laws and policies evolve, companies must understand the impact on their business operations. Proactively tracking regulatory and policy developments and establishing cross-functional groups can ensure that organisations are aware of and preparing for evolving ESG requirements. Companies that prioritise ESG considerations will reap the rewards when it comes to unlocking business opportunities and enhancing their reputation.”
A&L Goodbody has provided a practical ESG checklist for companies in the full report:
For further information please contact Jill Shaw, ESG & Sustainability Lead, any other member of the ALG ESG & Sustainability team, or visit the ALG ESG webpage.
Date published: 24 February 2025