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The Climate Action and Low Carbon Development (Amendment) Bill 2021 will support Ireland’s transition to Net Zero and achieve a climate-neutral economy by no later than 2050. It will establish a legally binding framework with clear targets and commitments set in law, and ensure the necessary structures and processes are embedded on a statutory basis to ensure we achieve our national, EU, and international climate goals and obligations in the near and long term. (Source Gov.ie)

The Bill includes a number of key elements that I won’t go into at this point but there are a number of these elements that will impact SMEs in particular. The impacts that SME’s will inevitably feel from the reach of this new legislation will be:

Increasing Energy Costs

• Firstly – The carbon tax will be increasing year on year up to 2030 and beyond. On a standard unit of gas, the impact of this increase in time will be an almost doubling of cost per kWh based on today’s prices.
• Secondly – the PSO levy increased last November and will likely in time need to increase again substantially to support the integration of new renewable energy, storage, and grid capacity equipment

Carbon Budgets for Sectors

Each sector will ultimately be provided with Carbon Budgets which will be the responsibility of each relevant minister and department to deliver upon – This will no doubt lead to further legislation to help to achieve these budgets which may include additional requirements for SME’s and small business to demonstrate their environmental performance and management of their Carbon Emissions. No sector of society regardless of scale will be exempt from what is coming.

Consumer Pressure

A recent IPSOS survey indicated that 63% of all consumers now make decisions on purchasing based on the Climate impact of products. Currently, it is difficult to determine the climate impact of many products however legislation that will come from Europe relating to the mandatory Carbon Footprint of products will in time mean that every product on our shelves will need a Carbon Footprint label – similar to that of our ingredients/allergens labeling regulations.

Pressure from Larger Organizations

Many larger organizations will be required to demonstrate the carbon emissions reduction of their supply chains to reduce their Scope 3 emissions. Many of these companies are already pushing new requirements back on their suppliers, many of whom are SMEs to demonstrate Energy Management Systems such as ISO50001 or provide a Carbon Footprint assessment of the products they supply into these companies. SMEs are currently not sufficiently resourced to undertake such work.

Opportunity

Climate Change represents a significant opportunity for forward-thinking leaders in the SME sector to differentiate their products and services by ensuring they have a lower carbon footprint than their competitors. This can be used to create a brand story that demonstrates the care and respect your organization has for the greater good which in turn may increase sales.

Cost & Waste Reduction

A professionally designed Climate Action Strategy from an expert will identify opportunities to reduce SME business operating costs, waste, and water reduction – this at a time when small business owners are under increasing pressure financially due to the Covid 19 pandemic. From experience, businesses could expect at least 20% savings from low / no-cost opportunities.

Climate Action however is viewed by many as something which is expensive, a complex undertaking and many SMEs may be bombarded with solutions from different suppliers. The solutions are there, however when considered in isolation or with a silver bullet approach Climate Action can be expensive, ineffective, and draining on a SMEs valuable time. To be capable of delivering real results an Expert or team of experts may be needed to determine the least cost/effort path to reach your targets.

There are many supports available that can grant fund your Climate Action projects from the Local Enterprise Office, Enterprise Ireland, the IDA, and SEAI.

If you are an SME and are interested in learning how Climate Action can:

1. Be self-funding
2. Demonstrate Measurable Results
3. Simple – using effective tools, systems, and methods delivered by experts with years of experience in the delivery of results to some of the world’s largest energy users all over the world.

Don’t hesitate to contact me with any questions at: pmurphy@leadingedgegroup.com