Increased spending on R&D to support sustainable practices

A company’s sustainability credentials have become an increasingly important competitive differentiator. Brands can quickly lose their lustre with modern consumers if they are seen to be failing on sustainability measures while whole sectors, such as agriculture, can find themselves in the dock in the court of public opinion due to their perceived environmental impact.

As a result, businesses and governments are spending increasing amounts on R&D efforts aimed at supporting sustainable practices as well as reducing climate impact. In Ireland, those efforts span a wide range of sectors including energy, agriculture, life sciences, and transport.

“Ireland has enjoyed great success to date in renewable energy deployment and remains a world leader in integrating ever greater proportions of renewables on the system,” says KPMG head of sustainable futures Russell Smyth. “Significant R&D is under way, both in the public and private sector, to further increase this penetration and optimise ways to utilise surplus energy, such as green hydrogen or sustainable aviation fuel production.”

In the medical devices sector, companies are redeveloping their processes to produce less waste. “Interestingly, these projects are not just about increasing yield, but rather for the purposes of improving or increasing sustainability,” says Ken Hardy, head of KPMG’s R&D incentives practice.

“Many companies in the field of mechanical and electrical engineering are examining ways to reuse waste products from large scale industry,” he adds. “For example, one Irish company is researching methods of heating homes through recycling the hot water waste-product generated from cooling data centres. And in agriculture several companies are working on using hydroponic farming — growing plants without soil — to produce nutritionally dense food. Hydroponic farming has the potential to be a much more energy efficient way of producing food and tackles issues of species conservation, land usage, soil pollution and deforestation.”

New technologies will play an important role in assisting the agriculture sector in achieving its challenging target of a 25 per cent emissions reduction by 2030. “The proliferation of deep technology into the agriculture sector could have a huge positive impact on the reduction of greenhouse gasses,” says Damien Flanagan, a partner with the KPMG R&D incentives practice. “Already, we have seen learning algorithms being applied to increase the efficiency of farming through yield prediction, disease detection, livestock welfare and water management to name but a few examples. In Ireland, there are several companies already working on bringing concepts like computer vision, edge computing and IoT [internet of things] into both arable and livestock farming.”

It’s not all about direct emissions reductions. “All enterprises have to think about sustainability in the broadest sense,” says John Shaw, country head with health insurance software specialist Legato Health Ireland. “The very future of the enterprise depends on sustainability. Whether you are manufacturing cars or providing health insurance, you have to become more sustainable. Customers are increasingly concerned about the future of the planet and every company needs to deliver products or services in a sustainable way.”

Sustainability in the healthcare space means a profound shift in focus, he adds. “We are part of Elevance Health, an American health insurance provider, and our CEO talks about total health and a whole health approach for policy holders. We are moving from health insurance to health assurance and prevention rather than cure. Instead of providing heart transplants for people suffering from cardiovascular disease, it is better to prevent the disease in first place. People born in Ireland today can expect to live until they are 95. Living longer is good, living longer and healthier is better. We are building software products for our parent company as well as for sale to other health insurers which support that transition to a sustainable healthcare world.”

Sustainability also informs the company’s approach to software development. “There is a phenomenon known as technical debt which means that once you develop a solution you use it for five years and then replace it,” he explains. “We have adopted an evergreen policy. We create software that has a very long future. It goes through simple iterative upgrades rather than being discarded and replaced.”

Having the skills to carry out the R&D in these areas is critically important, according to Tracey Donnery, executive director of policy and communications with Skillnet Ireland. “For us what’s key is to make sure businesses have right talent to make them more sustainable and competitive in the long term. We are looking at the jobs and skills that will be required in the sustainable economy. That includes the people who will research and develop new sustainable products and services.”

Through its Climate Ready Academy, Skillnet Ireland is already helping businesses to adopt low-carbon practices. “Upskilling and workforce development will help drive understanding of climate change and the adoption of new practices.”