Most firms cite supply chain regulations as their biggest sustainability concern
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A majority of Irish firms have reported a heightened focus on their sustainability efforts but concerns remain around supply chain due diligence following the implementation of new EU regulations, a new report from consultancy firm EY has found.
According to the latest EY Ireland’s State of Sustainability report, 81% of firms reported a heightened focus on sustainability over the past year, a 19% increase from the last survey in 2022.
Despite the increase in sustainability focus, 35% of respondents feel that their organisation is not doing enough.
In terms of their supply chains, 62% cited their supply chain due diligence as their biggest sustainability-related concern.
This was attributed to the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) which was designed to make organisations more sustainable by also making them responsible for the impacts of their supply chains.
The CSDD came into effect in July this year.
Levels of engagement with supply chain suppliers on reporting by organisation vary with 26% saying they have not engaged with their supply chain on environmental, social, and governance (ESG) reporting at all to date, while 19% of businesses have had initial conversations and 17% have had advanced discussions about the importance of collaboration.
Encouragingly, 50% of all organisations have technology solutions in place to gather data from their supply chains for compliance purposes, while 32% have systems to gather information in order to assess the ESG performance of their supply chains.
EY Ireland partner Derarca Dennis said “organisations that have not yet started engaging and collaborating with their supply chains run the risk of being left behind”.
More than half, 54%, of firms were concerned about the EU deforestation regulation, which has far-reaching implications for what can and cannot be produced or sold within the EU.
The report surveyed 200 senior sustainability decision-makers across the public and private sectors in Ireland.