Public investment in Ireland will be only for sustainable businesses

Ireland will oblige companies that are seeking to obtain public works or other investments from that state to not have a negative carbon footprint on the environment. Specifically, the government will require these firms to make a record of the annual expenditure of water, energy and total waste they produce.

Within the scope of this new climate-conscious valuation model, companies will also have to provide information related to the number of flights made by their executives in the course of the firms’ various activities and the number of kilometers traveled by their cars.

The government agency that supports national companies, called “Enterprise Ireland“, said it expects to present this plan, which will be part of the State’s new climate commitment, within the next few months.

Similarly, Leo Clancy, the organization’s executive director, warned that the project is under development because it will be part of an initial version of Ireland’s funding model.

Although Clancy did not confirm it, the pilot project has already concluded in September 2022 and the findings are already being analyzed by the Department of Enterprise.

While this is a huge change for the agency, it is something that was already being talked about, Clancy noted. In addition, he said the world is only going in one direction with respect to sustainability.

On the other hand, the Irish Inward Investment Agency (IDA) has not stipulated any dates yet. However, he announced that firms that are dedicated to reducing carbon emissions will have a better chance of getting financial support.

Also, the administration assured that this process will be applied to all schemes aimed at agency funding, and those that increase their emissions will face higher costs.

Business will only be good for sustainable companies

In recent years, the issue of environmental sustainability has become increasingly important to both governments and investors.

With climate change threatening the planet, many countries are taking a more active role in promoting positive environmental practices.

One thing they are doing is requiring companies to obtain positive environmental certificates before they are allowed to participate in public investments and tenders.

As Ireland will now do in 2023, several countries around the world have already implemented similar measures.

For example, in France, companies must obtain a positive environmental certificate known as “Label Bas Carbone” in order to be eligible for certain public tenders. This certification requires companies to demonstrate a negative carbon footprint, meaning that they are offsetting their carbon emissions through activities such as reforestation or investment in renewable energy sources.

Since the certification was introduced in 2015, it has been awarded to more than 300 companies.

In addition to Ireland, other countries require sustainable businesses

Similarly, in Denmark, the government requires companies to have a positive environmental impact to qualify for public investment.

The country has set a goal of reducing carbon emissions by 70 percent by 2030 and achieving net zero emissions by 2050, and is using public investment as a tool to incentivize companies to work toward these goals.

Other countries, such as Sweden and the Netherlands, are also implementing similar measures.

In Sweden, the government has announced that it will require companies to have a positive environmental impact in order to participate in public procurement.

In the Netherlands, meanwhile, a new law has been proposed that would require companies to obtain certification demonstrating their positive environmental impact before they can participate in public tenders.

Criticism of the model

Everything seems to indicate that these measures are having a positive impact on the environment. At least, so says a report by the French Environment and Energy Management Agency.

According to that agency, companies with “Label Bas Carbone” certification have reduced their carbon emissions by an average of 22 percent. In addition, certification has helped create new markets for green products and services, driving innovation and economic growth.

However, not everyone agrees. Some companies argue that it is too costly and time-consuming to obtain, and that it unfairly excludes smaller firms from public tenders, whose size makes it impossible for them to access these certificates.

Others argue that the government should not decide which companies are eligible for public investment based on their environmental impact.

There is a big business to invest here

As more countries require companies to be sustainable and demonstrate a positive environmental impact before participating in public tenders and investments, the demand for environmental and carbon footprint certifications is on the rise.

So, obviously, there is a big business here.

In the United States, one of the most important of these companies is Green Business Certification (GBCI).

Founded in 2008, GBCI provides third-party certification for green building projects, as well as credentials for sustainability professionals. Its certifications, such as LEED and WELL, are as expensive as they are globally recognized.

Another company in the United States is Carbon Trust, which provides carbon footprint certifications and other sustainability services to businesses.

The Carbon Trust was founded in 2001 and has worked with more than 1,000 companies around the world. According to its own statistics, it has helped save more than 90 million tons of CO2 emissions.

Its main certification, the Carbon Trust Standard, enjoys great prestige in the business world and is increasingly required by governments and investors.

Companies certifying sustainable companies in Europe

In Europe, one company that stands out in this area is Global Reporting Initiative (GRI). GRI, founded in 1997, provides sustainability reporting guidelines and certification services to companies.

Its standards are used by more than 70 percent of the world’s largest firms and its certifications are recognized (and very expensive indeed).

Another European company in this business segment is Sustainalytics.

Sustainalytics has grown in recent years and has more than 700 employees in 18 offices around the world.

These companies have not only helped to promote sustainable practices, but have also been financially successful.

For example, the Carbon Trust reported revenues of more than $85 million in its latest financial report, while Sustainalytics was purchased by Morningstar for $279 million.

GBCI and GRI, meanwhile, expanded their markets to the Asian continent, especially in China, where certifications were not important, until now.

A fact that shows the importance of the sector is this: Carbon Trust launched a £50 million green bond to finance new sustainability projects, while Sustainalytics attracted investments from major funds such as BlackRock and investment bank Goldman Sachs.