New research has found that many Irish financial services firms are not aware of a European Union system that is designed to help companies, investors and policymakers to figure out which economic activities are sustainable for the environment.
The EU’s Taxonomy Regulation aims to assist those involved in business to make educated choices about product development and investment.
The research revealed that just 8% of companies surveyed said they have good knowledge of the scheme, with 52% claiming a basic understanding.
A further 27% do not yet know about it, but are in the process of researching and learning about it.
Meanwhile 13% said they do not know anything at all about the system.
“The classification system which has come in under the Taxonomy Regulation will help investors have greater certainty that they are investing in, and will give companies confidence that they are undertaking, projects and activities which are in line with EU environmental targets,” said Michael Kavanagh, CEO of the Compliance Institute.
The regulation was officially adopted three years ago and provides a science based common classification of economic activities that contribute to environmental aims.
Affected companies will have to disclose the extent of their activities that are aligned with the system in their financial year end reports.
Despite the low levels of knowledge among some firms, 48% of the 125 firms that were surveyed said they support the idea of the Taxonomy Regulation.
Exactly half of the said they are less sure, because it may be good for the environment, governance and society, but tough on companies.
Just 2% said they are not in favour.
“Irish companies should make it their prerogative to learn about, and make the most of, the new system,” said Mr Kavanagh
“In doing so, they can play their part in tackling climate change, the consequences of which are being increasingly experienced by people in all corners of the globe today.”