By Susan Rossney, Sustainability Advocacy Manager, Chartered Accountants Ireland
Northern Ireland, like the rest of the UK and Ireland, is experiencing the tangible effects of climate change—more frequent flooding, shifting weather patterns, and pressure on natural ecosystems.
At the same time, biodiversity is in steep decline, threatening the ecological foundations upon which society and the economy depend. The transition to a climate-positive economy—one that reduces emissions but actively restores ecosystems and sequesters carbon—is no longer optional. It is essential for long-term economic stability, public health and environmental resilience.
In October a Northern Ireland Audit Office Report stated that progress with Northern Ireland’s energy strategy is “lagging considerably”. The report found this was despite expenditure totalling around £107 million since 2020. The plan aimed to achieve 80% of the region’s electricity from renewable sources by 2030, using wind and solar sources. It seems clear that what we are doing isn’t currently working.
There are strategic opportunities for Northern Ireland industry and for businesses in the transition to a climate- and nature-rich economy. It can help attract inward investment and Foreign Direct Investment to future-proof the region and secure the long-term viability of high-value jobs.
A study by the World Resources Institute found that climate adaptation investments yield significant returns: with every $1 invested in adaptation and resilience more than $10 would be generated in benefits over 10 years. Businesses that embrace sustainability can also reduce costs, enhance brand reputation and improve their ability to attract talent and access new markets.
All sectors of the economy must take action to achieve these benefits, including small and medium-sized enterprises (SMEs). Accounting for over 99% of all businesses and employing a significant portion of the workforce, SMEs are the backbone of Northern Ireland’s economy.
With their size and agility, SMEs are uniquely positioned to innovate and implement sustainable practices quickly. But they face significant challenges in what can be a complex and potentially resource-intensive transition.
Without coordinated support, many SMEs risk being left behind, and with their prominence in the business landscape of the region, this in turn undermines regional efforts to meet climate and biodiversity targets.
In its response to the draft Climate Action Plan 2023–2027, published for consultation by the Department of Agriculture, Environment and Rural Affairs, Chartered Accountants Ireland advocates for targeted supports for SMEs, along with accurate emissions data for the sector and a clear communication strategy to help SMEs play their full part in Northern Ireland’s transition to a net zero economy.
Zara Duffy, Executive Head of Global Engagement with Chartered Accountants Ireland, described the challenges facing SMEs:
“Many SMEs are in the supply chains of organisations that are in scope of mandatory sustainability reporting requirements, or are seeking funding for investment from financial providers or lenders. Not all of them have the skills and resources to meet the sustainability criteria to remain in those supply chains or secure the investment or finance. They need the Government to create the enabling conditions for them to thrive in a green economy.
“Against this is the need to simplify any administrative burden for SMEs that may arise. Dealing with red tape is also a major disincentive for SMEs in taking action, as SMEs need to focus their limited resources on implementing real climate action, rather than navigating complex regulations and funding processes.”
SMEs clearly need support, but many UK Government supports – such as the Industrial Energy Transformation Fund – are aimed at high-energy-using businesses in Northern Ireland, England and Wales. SMEs with lower energy use have far fewer supports and find focusing on climate change difficult.
To counter this, Chartered Accountants Ireland is calling for meaningful incentives to help them modernise operations, reduce energy costs, and improve competitiveness. This includes targeted financial support for SMEs in the form of timely grants, for example, energy efficiency grants with simplified funding applications.
The Institute also calls for reductions to the Climate Change Levy payments for businesses actively managing energy use. Revenues raised from the CCL could be ringfenced for climate and nature projects. This would create a transparent and fair link between business contributions and environmental outcomes.
Accurate data is essential for designing effective, evidence-based policies and understanding SMEs’ contributions to regional emissions. Chartered Accountants Ireland is also calling on the government to invest in better data collection and analysis of SME emissions.
Finally, Chartered Accountants Ireland recommends the Government embark on a campaign to communicate climate information, support schemes, and success stories clearly and accessibly to SMEs, ensuring that messaging is inspiring, practical, and tailored to the SME context.
Northern Ireland’s SMEs are resilient, innovative, and deeply embedded in their communities. With the right support, they can become powerful agents of change—restoring nature, reducing emissions, and building a thriving, sustainable economy for future generations. Government and professional advisors must work together to create a coherent, accessible, and empowering framework for SME sustainability.
Northern Ireland has a rich history of resilience and entrepreneurship. By investing in its SMEs and equipping them to lead the green transition, the region can build a future that is not only economically vibrant but also ecologically thriving.