Firm-Level Attitudes and Actions to the “Twin Transition” Challenges of Digitalisation and Climate Change

Abstract

There are increasing pressures on firms to adjust to the major global challenges of climate change and rapid developments in digital technologies. To date, the impacts of these two challenges on firms have largely been examined as separate issues. However there are suggestions of overlap, with the potential of digital technologies to help economies and firms shift to greener production methods. This paper provides a novel contribution to this literature on a “twin transition” by examining for the first time the overlap at a firm level between climate actions and digitalisation. The data are drawn from a large-scale survey of 3,000 firms in Ireland in 2020. The report includes novel questions on energy use, climate adaption priorities and digital strategies along with a wide range of firm characteristics. Our key outcome variables are the degree of digitalisation in the firm, if it has a climate plan and does it implement climate actions such as monitoring emissions. We find considerable overlap between having a climate and a digital plan in place across firms, while controlling for a range of other firm characteristics. At the same time, we find a reasonably large share of firms have positive attitudes to the importance of climate planning but without reporting corresponding concrete actions, suggesting a gap for policy to address.