ESG in the current geopolitical context
In 2026, many elements will influence sustainability goals for businesses, their capital providers, and their insurers. The US anti-ESG backlash and EU policy backsliding continue to cause confusion and challenge international progress on climate change and the broader green transition. However, despite the geopolitical headwinds facing ESG, the risks and costs from climate change continue to grow, as do the opportunities in the EU green economy.
For businesses based in Ireland, the EU, and the UK, multiple regulatory and customer pressures will continue to dictate ESG priorities in operations and supply chains. Demands from investors, lenders, and insurers for credible Climate Transition Plans persist amid the risks posed by climate-induced weather events.
Furthermore, Ireland’s EU presidency lead role from summer 2026 also dictates a policy focus on decarbonisation and sustainable finance. For the EU and the green economy, geopolitics is reshaping global competition on the net-zero transition.
In terms of GHG reduction targets, Ireland aims for a 51% reduction by 2030 (vs. 2018) and net-zero by 2050 under the Climate Action and Low Carbon Development Act 2021. Ireland’s EU Effort Sharing Regulation target is at least 42% by 2030. However, the EPA forecasts that Ireland will achieve only a 23% reduction by 2030 based on current progress.
The EU target is at least a 55% net GHG reduction by 2030 (vs. 1990) and climate neutrality by 2050. In November 2025, a binding 2040 target of 90% net reduction was set, with up to 5% via international credits. The EU also adopted an indicative 2035 range of 66.25% - 72.5% as part of its updated Nationally Determined Contribution (NDC) submitted just before COP30, positioning this as a step between the 2030 and 2040 milestones.
The UK Government submitted its first NDC in December 2020, committing to at least a 68% reduction in economy-wide GHG emissions by 2030 (vs. 1990 levels). In January 2025, the revised NDC increased the target to at least 81% by 2035. The UK also aims for net-zero emissions by 2050.
This article reflects the regulatory and policy landscape as at the time of publication. Given the pace of change, developments may occur after release. Contact our team for personalised advice.
Contact us
