Ruth McNamee explores how GenAI is transforming finance, automating tasks, enhancing decision-making and providing insights to deliver better business results The landscape of Generative Artificial Intelligence (GenAI) is changing at an unprecedented pace, offering companies a unique opportunity to drive innovation and secure competitive advantages. Among the various business functions poised to benefit from this technological revolution, the finance function stands out as ideal candidates for early adoption. The power of GenAI in finance GenAI has the potential to revolutionise finance functions by automating routine tasks, enhancing decision-making processes and uncovering valuable insights from vast datasets. From virtual assistants that facilitate chatting with data and documents through automated document processing, to automating financial reporting, the potential applications of GenAI are vast and varied. By implementing a structured and systematic approach, finance functions can improve efficiency and drive strategic growth. Initial steps: ‘TOM Light’ and enablement For organisations eager to start their GenAI journey, adopting a streamlined target operating model (TOM), or ‘TOM Light’, is an excellent first step. This can help organisations to quickly realise the benefits of GenAI without extensive initial investments or complex restructuring. By focusing on a few high-impact use cases, supported with a preliminary governance and technology set-up, finance teams can demonstrate the value of GenAI and build momentum for broader adoption. The GenAI revolution requires companies to actively support employees during the transition, convincing them of the benefits and initiating a cultural shift. New skill sets are in demand, and employees need to learn to use new GenAI systems effectively in a corporate context. To expand the pipeline with additional use cases and support the successful roll out of high-impact use cases, it can be beneficial to start by training an initial group of employees and then extend training step-by-step. A role-based upskilling initiative typically includes foundational and technical AI knowledge, complemented by practical use case ideation sessions — from small daily benefits to large-scale GenAI use cases. For example, knowing how to effectively create prompts and recognise potential applications for GenAI can create efficiencies in an accountant’s or controller’s daily tasks. Long-term vision: a comprehensive target operating model While ‘TOM Light’ offers a quick and effective entry point, long-term success with GenAI requires a more comprehensive TOM. This model should be designed to handle GenAI effectively and responsibly, ensuring the technology is integrated seamlessly into the organisation’s processes and culture. Key components of a comprehensive TOM include: Governance framework: establish clear guidelines for the responsible use of GenAI, including data privacy and security measures. Talent and skills development: invest in larger-scale enablement, building on the experience with the initial group to equip finance teams with the skills needed to leverage GenAI effectively. Technology infrastructure: build a robust and scalable technology infrastructure that can support the deployment and ongoing maintenance of GenAI solutions. Creating a roadmap for success With a TOM in place, organisations can develop a detailed roadmap outlining the steps needed to implement GenAI across the finance function.  The transformative potential of GenAI is undeniable, and finance functions are uniquely positioned to lead the way. By taking immediate action and adopting a structured approach, finance teams could drive innovation, enhance efficiency and create sustainable competitive advantage for their organisation. The time to embrace GenAI is now — don’t just observe the revolution, be a part of it. Ruth McNamee is Finance Transformation Director at PwC

EY’s new State of Sustainability report shows businesses have reached a tipping point on sustainability, revealing a significant shift in sentiment and behaviour, writes Derarca Dennis The EY State of Sustainability 2024 report has reveals an important shift in how Irish businesses view sustainability. Eighty-one percent of respondents reported a heightened focus on sustainability within their organisations over the past year, marking a 19 percent increase from the previous survey in 2022. This is the largest percentage increase noted in the study, indicating a growing commitment to sustainable practices among businesses in Ireland. Sustainability efforts and industry leadership The findings suggest that progress is being made, with 74 percent of respondents rating their sustainability efforts as 'established or better', up from 61 percent in 2022. Fifteen percent consider their efforts 'industry-leading', meanwhile, doubling the corresponding seven percent recorded in 2022. There is still room for improvement, however, with 35 percent of this year’s respondents noting their organisation is not doing enough, up significantly from 17 percent in 2022. Fear of greenwashing influences communication strategies Awareness of the negative impact and reputational risk associated with misleading sustainability claims is growing. Thirty-five percent of the respondents in the EY State of Sustainability 2024 report indicated that fear of greenwashing is influencing their communication strategies, a significant increase from 13 percent in 2022. Key motivations for sustainability Rising stakeholder interest, regulations and perceived bottom-line benefits are key motivating factors driving sustainability in organisations. Close to two-thirds (65%) of businesses reported wider stakeholder enquiries about sustainability impact, up from 49 percent in 2022. More than half (58%) believe demonstrating a greater commitment to sustainability is necessary for access to capital. Interestingly, 30 percent indicated they are increasingly assessing the sustainability status of target companies when considering a merger or acquisition. Regulatory concerns Navigating complex EU regulations is the leading sustainability-related concern for organisations, according to EY’s research, with the EU Emissions Trading System cited by almost two-thirds (65%) as a key concern. Supply chain due diligence, driven by the Corporate Sustainability Due Diligence Directive (CSDDD), is a concern for 62 percent of respondents. The EU Deforestation Regulation and plastic packaging-related measures were cited by 54 percent and 46 percent of respondents, respectively. Supply chain responsibility Sustainability regulations such as the Corporate Sustainability Reporting Directive (CSRD) and CSDDD are designed to make organisations more sustainable by holding them accountable for their supply chains. Sixty-two percent of respondents cited supply chain due diligence as their biggest sustainability-related concern. Engagement levels with supply chains on ESG reporting vary, with 26 percent having not engaged at all, while 50 percent have technology solutions in place to gather data for compliance purposes. Long-term resilience The findings show that the link between sustainability and profitability is becoming an increasingly important factor in corporate strategies. As companies embrace this agenda, they must engage with all stakeholders to create a more resilient and sustainable business. Irish businesses are moving toward sustainability, with growing stakeholder interest, regulatory pressure and bottom-line benefits driving this shift. The report shows that more companies are embedding sustainable practices. Despite this, concerns about greenwashing and regulatory compliance remain challenging. Notably, many companies are scrutinising the sustainability of potential mergers and acquisitions, signalling a commitment to change. While progress is evident, there is still work to do, especially in supply chain accountability. For sustained impact, continued engagement with stakeholders and a proactive approach to regulation will be essential for long-term resilience. Derarca Dennis is Assurance Partner and Sustainability Services Lead at EY

Data use is skyrocketing, raising ethical concerns beyond regulatory compliance. Colm McDonnell explores how embedding digital ethics ensures fairness, transparency, and accountability in organisations Data has become an integral part of modern life, and its usage is growing exponentially. From businesses to governments, organisations are collecting, storing, and analysing vast amounts of data to gain insights, make decisions, and develop new products/services. However, with great power comes great responsibility. The more data organisations process, the bigger the spotlight on them, not only to ensure regulatory compliance but also to focus on the significant ethical concerns resulting from data collection and its use. Furthermore, the growing use of technology, including artificial intelligence (AI) and robotics, stems concerns about the extensive use of data and the potential for misuse. What is digital ethics? Doing the right thing, regardless of legislation, takes you into the field of ethics. Organisations usually focus on various regulatory obligations that they must comply with, but organisations also have a responsibility to their stakeholders, including their employees, customers, vendors, and investors. This goes beyond regulatory compliance. Accountability can be complex to define and demonstrate, often leading organisations to set out some principles they should adhere to such as privacy, fairness, non-discrimination, transparency, and more, while processing data. Embedding digital ethics into an organisation involves promoting the moral values of the organisation through the alignment of data processing practices and processes with those values. Digital ethics refers to a set of principles and moral values that guide the responsible and ethical use of data. The following eight guiding principles define an approach to AI and digital ethics. Code of digital ethics All organisations should establish a code of digital ethics that sets out their commitments to ethical data practices. Digital ethics by design should be considered right from the outset of any product development, product enhancement or any proposed processing of data. Periodic training and awareness programmes should be rolled out to promote awareness of ethical data processing practices. This will eventually build a culture of trust, transparency, and safety within the organisation. Human oversight and determination Organisations must make sure AI systems do not take the place of human accountability and responsibility. There needs to be human oversight and safeguards in place to prevent misuse of data. There should be cross-functional stakeholder collaboration and effective governance. Proportionality, do no harm, safety and security AI systems should only be used as much as is required to accomplish a valid goal. Risk assessment should be utilised to prevent any potential harm from these types of applications. Fair and transparent algorithms Organisations must ensure that their decision-making and algorithms are fair and impartial. This can be achieved through ongoing monitoring and periodic testing. Transparency and explainability Data should be collected and used with transparency, so individuals understand how their data will be utilised thereby allowing them to make informed decisions about whether to share their data. Further, where deemed necessary, before collecting data, organisations should seek consent from individuals. This consent should always be freely given and be fully informed. Inclusion Unconscious or conscious bias can affect inclusivity in an organisation. Organisations should take the necessary steps to ensure the processing of data does not result in or hide discrimination or bias. Vulnerable data subjects who are the most susceptible to negative consequences of processing require additional consideration. Autonomy, freedom, respect, privacy, and dignity Individuals must be able to make their own decisions, take their own actions, and make their own choices. Processing of data should not constrain human beings in how they want to live their lives. Autonomy for individuals to control how their data is processed should be ensured. The processing of the data should be respectful of human values. Specifically, when the processing is carried out through AI, the outcome should not dehumanise individuals. Sustainability AI innovations should be evaluated to consider their effects on the environment and their ability to sustain through periods of time. These innovations should align with the organisation’s sustainability goals. Colm McDonnell is Partner of Risk Advisory at Deloitte

As businesses navigate a new landscape, the CSRD challenges them to comply, but also to seize the opportunity for growth through sustainability, writes Dave O’Shaughnessy Embarking on a new era of transparency and accountability, the European Corporate Sustainability Reporting Directive (CSRD) is set to revolutionise the way large and publicly listed companies disclose their environmental, social, and governance (ESG) practices. Phase 1 of the CSRD targets large companies meeting at least two of these criteria: over €50 million in net turnover, more than €25 million in balance sheet totals, or an average of 250 employees annually.   This directive unfolds progressively through to 2029, with the goal for entities to measure, understand, and communicate their ESG impacts in a transparent, consistent, and comparable way. The scope of the directive, in terms of the amount of data needed and the specific requirements, including presentation, digital tagging, comparative data analysis, and digital submission, is broad and detailed. There are more than 800 individual data points within CSRD, of which almost 200 are mandatory.  CSRD incorporates quantitative and qualitative metrics, to measure the impacts, risks, and opportunities of upstream, own-operations and downstream activities, based on a thorough double materiality assessment. Moving beyond compliance Companies now have the chance to extend their vision beyond mere compliance requirements by leveraging the wealth of data and analytics at their disposal to unlock a multitude of untapped opportunities. Preparation and presentation of comprehensive ESG reports provide organisations with actionable insights about their business that they did not previously have. Organisations are increasingly recognising that a well-defined sustainability strategy is essential for long-term success. As they develop and refine these strategies, the need for technology that not only supports but also enhances their sustainability goals becomes clear. These strategies should be adaptable and scalable, evolving in tandem with the organisation’s growth and sustainability ambitions. By integrating advanced data management systems, organisations not only meet their ESG reporting needs but also provide a platform for performance monitoring and management, as well as scenario modelling to shape future initiatives. The right technology is a catalyst, propelling organisations towards their sustainability objectives and unlocking new opportunities for responsible growth. For assurance, it’s essential to have systems in place that can accurately track and document ESG initiatives, allowing for third-party verification. This helps to confirm that the reported data is complete, accurate, and consistent with relevant standards and frameworks. Assurance processes also provide stakeholders with confidence that the organisation’s ESG disclosures are trustworthy and that it is committed to transparency and accountability. Delivering value through technology Scalable, adaptable, and flexible technology should provide the backbone of every organisation’s ESG strategy. Organisations require a technology solution that will streamline the data integration process and automate the collection, collation, analysis, and reporting of ESG data for relevant reporting frameworks. Implementation of a comprehensive data management system will not only help companies streamline data integration and automate ESG data handling for reporting frameworks but also meet their ESG reporting and assurance requirements.  A 2023 NASDAQ research report that interviewed 150 global sustainability, finance, and legal executives found that investment in ESG software is helping to improve organisational collaboration, mitigate risks, and meet ambitious ESG and sustainability goals. One of the predominant challenges that we are seeing for many organisations relates to value chain reporting. The need to share detailed, potentially sensitive, data between value chain partners, from raw material extraction to end-of-life disposal and recycling certainly brings an added level of complexity. Value chain reporting requirements for scope 3 emissions and on social areas, such as child labour and modern slavery, challenge the traditional definition of an organisation’s boundaries. As well as the processes and systems needed to capture accurate and reliable data, the related governance and cultural implications of this fundamental shift are complex and challenging.  To meet these challenges, companies need to leverage technology that is adaptable to different frameworks including all the necessary integration capabilities with internal systems. A future-proof solution that meets today’s reporting and ESG management needs, while also incorporating additional evolving regulatory requirements and others that may follow, is needed. Looking beyond reporting CSRD is in force and although the new sustainability reporting requirements may seem vast and onerous, the opportunity it provides to look beyond reporting and to explore new and innovative options is compelling. The need for an ESG reporting solution that is adaptable, scalable, and integrated is clear. Dave O’Shaughnessy is Sustainability Reporting Partner at EY

The introduction of Enhanced Reporting Requirements on 1 January 2024 has resulted in increased scrutiny of the taxability of employee benefits and expenses, writes Jillian O’Sullivan We have seen a shift in Revenue focus during PAYE interventions not only to matters within scope of Enhanced Reporting Requirements (ERR) reporting but also to staff entertainment. It is, therefore, critical that employers now consider whether they are required to submit a PAYE Settlement Agreement (PSA) application before the 31 December deadline. This process enables employers to account for income tax, Universal Social Charge (USC) and PRSI due on taxable employee benefits and expenses that have not been accounted for via the PAYE system during the year, to ensure payroll tax compliance is managed appropriately. What is a PAYE Settlement Agreement? Many employers provide benefits and expenses to employees, such as staff entertainment, vouchers and other gifts. Unless these benefits and expenses fall within the terms of specific tax exemptions or Revenue concessions, they are liable to payroll taxes on a real-time basis. PSAs are an administrative arrangement that allows employers to pay taxes on behalf of their employees on benefits and expenses that are ‘minor and irregular’ in nature in one annual settlement on a grossed-up basis. Deadlines A written application must be submitted to Revenue by 31 December 2024 for the PAYE year 2024. Taxes due under the agreement must then be paid over by 23 January 2025. Included PSA items The benefits or expenses to be included must be non-cash, minor in nature and amount, and irregular with regard to the frequency the benefits or expenses are provided. Examples of taxable items that could be included in a PSA are: Staff entertainment; Staff lunches/drinks/meals; Staff awards and prizes; and Staff gifts where the small benefit exemption has otherwise been utilised, e.g. wedding, birthday, baby, Easter and Christmas gifts. Get proactive With the increasing scrutiny by Revenue on payroll tax compliance, it is essential for employers to proactively assess their obligations regarding PSA. Ensuring that all taxable employee benefits and expenses, including staff entertainment and gifts, are accounted for can help avoid potential penalties and maintain good standing with Revenue. The 31 December deadline for PSA applications for the 2024 PAYE year is a critical date that employers should not overlook. By meeting these requirements and preparing well in advance, businesses can streamline their tax processes, reduce administrative burdens, and foster a compliant and transparent work environment. Jillian O’Sullivan is Corporate Compliance Partner at Grant Thornton

Neil Hughes explains how mastering emotional intelligence can empower leaders to build trust, improve communication and enhance team performance One of the most critical factors shaping leadership today is the capacity to manage one’s own emotions while also understanding and responding to the emotions of others – also known as emotional intelligence (EI). Daniel Goleman, one of the pioneers of the concept of EI at work states: “technical skills will only take you so far. EI will take you farther”. Goleman identifies five components of EI that can help individuals navigate and maximise their personal and professional relationships effectively:  Self-awareness refers to the ability to recognise and understand your emotions and how they affect others.  Self-regulation is the ability to manage or redirect disruptive emotions and adapt to change. Motivation is about a leader’s drive to achieve meaningful goals for reasons beyond external rewards.  Empathy is the ability to understand the feelings of others by recognising and considering others’ perspectives. Social skills refer to proficiency in managing relationships and having the ability to inspire and influence others positively. Much has been written about Satya Nadella’s success as the CEO of Microsoft. His approach to leadership is grounded in EI, with a strong emphasis on empathy, building relationships and developing a collaborative work culture. With his leadership, Microsoft has experienced a profound transformation with its share price growing an impressive 969 percent since Nadella took over. So, what can leaders learn from this? By fostering EI in themselves and their organisations, leaders can cultivate a deeper understanding of themselves and their teams. An emotionally intelligent leader can build trust within their teams by applying behaviours and practices which are rooted in Goleman’s components of emotional intelligence.  Leaders who possess social skills, practice empathy and understand motivational drivers can set a foundation for building strong relationships. These qualities enable leaders to understand, connect and support their employees. Emotionally intelligent leaders who are effective at managing their emotions and understanding the emotions of others excel in areas such as communication and decision-making. They are adept at expressing themselves clearly and tailoring their communication styles to suit individuals and situations, which cultivates open dialogue and reduces misunderstandings. They remain calm under pressure and take a holistic view of situations, leading to rational and empathetic decision-making.  Leaders with high levels of emotional intelligence also tend to practice self-regulation, which means they avoid impulse reactions, making them better equipped to manage conflict. By remaining composed during disputes, they fully understand different perspectives and lead their teams towards constructive solutions and growth opportunities.  By focusing on these components of EI, leaders can establish lasting trust within their teams driving higher performance. The Journal of Organisational Behaviour has found that high levels of trust can increase team performance by up to 20 percent.  Leaders who invest in understanding and developing their emotional intelligence are much better equipped to handle their own emotions and those of others, which makes them more capable of leading their teams to success.  What steps will you take to harness the power of EI to transform your leadership, build trust and increase performance within your team? Neil Hughes is Director of People and Change Consulting at Grant Thornton