Accountants key to reaching Climate Act targets

Accountants have a critical role to play in assisting companies, both large and small, to get on their sustainability journey, writes Dee Moran

Sustainability reporting is a term that is getting much more traction and interest than in the past and with due cause.

From an environmental perspective, the latest report from the Environmental Protection Agency is encouraging in that Ireland’s emissions in 2023 were below the 1990 baseline for the first time in three decades. 

However, the report also states that the Climate Act objective of achieving a 51 percent reduction by 2030 will not be achieved unless all sectors meet their indicative reductions. 

Therefore, it is critical that we, as accountants, play our part in assisting entities to up their game, particularly in the area of sustainability reporting. 

It has become clear in the past year or so that our members’ interest in this area has increased hugely. 

Having over 600 members attend our two recent sustainability webinars is testament to this, as are the numbers signing up to the Institute’s certificate and diploma programmes in this area. 

The transposition of the Corporate Sustainability Reporting Directive (CSRD) into Irish law on 5 July 2024 requires companies, depending on their size, to begin reporting from 1 January 2024. 

Whilst the subsequent publication of the statutory instrument, (S.I. 336/2024) has been very welcome, there remain some areas that require clarification on interpretation before we can begin to write technical guidance for members. 

In this special report, Daniel O’Donovan outlines these interpretations in a very clear and concise manner. 

We have engaged with the Department of Enterprise, Trade and Employment and Minister Peter Burke, TD, FCA, on these interpretive questions, and other matters that require clarification. An amending statutory instrument, S.I. 498/2024, was signed into Irish law on 1 October 2024. While the S.I. provides some clarifications, outlined in Daniel O’Donovan’s article, there still remain questions that must be answered regarding the transposition.

It is important that there is a shared understanding of the legislation, which will allow preparers to set up the processes and procedures necessary to report and comply with the CSRD. 

In this special report, EY’s David Connolly and Alba Boshnjaku outline some of the requirements of the CSRD, and why ignoring sustainability is no longer an option for businesses. 

They also discuss the importance of an entity having the right mindset, and that companies complying with the CSRD could see real business benefits and additional opportunities. 

While approximately 1,000 companies in Ireland will eventually have to comply with the CSRD, there are thousands of other entities that will have to prepare to report on their sustainability information if they are in the value chain of an in-scope company. 

This will place an additional burden on SMEs and a recent study undertaken by Niamh Brennan and Sean O’Reilly from UCD, and Louise Gorman from Trinity College Dublin outlines some of these challenges, and how accountants can assist them in managing the impact. A brief explanation of the research is outlined in their article.

As accountants, we have a critical role to play in assisting companies, both large and small, to get on their sustainability journey.  We encourage you to upskill and be prepared to play a role in this journey.  

Dee Moran is Professional Accountancy Lead at Chartered Accountants Ireland