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Permanent TSB’s Norma Conway tells Accountancy Ireland why neurodiversity must be part of every organisation’s diversity, equity and inclusion strategy Employers who embrace neurodiversity stand to benefit from new ideas and fresh thinking that can boost the bottom line. So says Norma Conway, Diversity and Inclusion, Wellbeing and Engagement Manager with Permanent TSB. As Conway sees it, the neurodivergent community is currently a largely untapped resource for employers in Ireland, many of whom are unaware and unprepared for the strengths and capabilities this cohort can bring to the talent pool. “The benefits of neurodiversity are undeniable. Companies with neurodiversity programmes already in place report improved retention rates, reduced turnover and increased productivity and innovation,” Conways says. In “Neurodiversity as a Competitive Advantage”, an article published in The Harvard Review in 2017, for example, authors Robert D Austin and Gary P Pisanom reported that neurodiverse teams were 30 percent more productive than their neurotypical counterparts. Similarly, a still oft-quoted survey commissioned back in 2003 for the BBC series Mind of a Millionaire found that 40 percent of the UK’s self-made millionaires were dyslexic. Neurodiversity: what it means So, what is neurodiversity? The term was coined in the late nineties by Judy Singer, an Australian sociologist, to recognise that everyone’s brain develops in a unique way.  Harvard Health defines neurodiversity as, “the idea that people experience and interact with the world around them in many different ways; there is no one ‘right’ way of thinking, learning, and behaving, and differences are not viewed as deficits”. While Singer primarily views neurodiversity as a social justice movement, research and education in the area is also increasingly used by clinicians to understand numerous conditions, according to Harvard Health. These conditions range from autism spectrum disorder and attention deficit hyperactivity disorder (ADHD) to dyslexia, dyscalculia and dyspraxia. The upside for business For Conway, the benefits of these different ways of thinking are obvious for employers.  “Neurodivergent people bring a ‘business upside’ literally because they think differently,” she says. “In general, people with dyslexia are better at visual thinking and they are more creative. They have an approach to looking at data and problem-solving that I wouldn’t see myself.  “People with ADHD bring creativity, energy and passion. That’s built into the mindset of how they think and how they approach problems.” For employers, this can mean valuable access to better problem-solving capabilities and a more effective approach to strategising. “In most workplaces, we are generally trying to solve problems, improve things or find solutions, so having someone in the room who thinks differently automatically brings a new approach,” Conway says. “If you’re trying to brainstorm ideas and you bring someone into the mix who thinks differently, is more creative and asks questions nobody else is asking, the power in that is phenomenal.” Understanding and embracing neurodiversity in workplaces, schools and communities can also improve inclusivity for everyone, Conway adds.  “Every human is unique, with a unique combination of abilities and needs. Creating an environment that is helpful to neurodivergent people and that recognises everyone’s individual strengths and talents embraces this idea,” she says.  While she sees growing awareness of neurodiversity in society generally, Conway says the majority of employers continue to adopt a one-size-fits-all approach to recruiting, managing and supporting their employees.  “We have students in Ireland now receiving supports and accommodations throughout school and college, but they reach the workplace and hit immediate barriers as these supports and accommodations don’t exist in most companies,” she says. There is a “huge opportunity” here for employers to access a talent market that is thus far largely untapped, says Conway. The Same Chance Toolkit: A Step by Step Guide to Becoming an Autism Friendly Employer, published earlier this year by AsIAm, Ireland’s national autism charity, revealed that 85 percent of autistic individuals are either unemployed or underemployed.  “This is an opportunity for companies, not only to fill roles, but also to contribute to social justice and employment equity,” says Conway. The Permanent TSB experience As a large organisation employing 3,000 people nationwide, Diversity, Equity and Inclusion (DE&I) first became a key strategic priority for Permanent TSB back in 2017. Neurodiversity has been part of this strategy from day one and continues to evolve in line with developments in the wider world. “The focus on neurodiversity has changed in more recent years and there is an awareness that we need to do more, which has been captured as part of our latest DE&I Strategy for 2023 to 2025,” Conway says. “We now understand the complexities of neurodiversity, how neurodivergent colleagues are impacted by the work environment and the multiple potential business advantages to having diversity of thought in teams.” Ability is one of the main areas of focus in Permanent TSB’s DE&I strategy. “In May, we announced the establishment of our Ability Employee Resource Group (ERG) encompassing both physical ability and neurodiversity. We wanted to hear from colleagues and get their input as we plan to increase awareness and supports,” Conway says. “We’ve worked with the Trinity Centre for People with Intellectual Disabilities (TCPID) for a number of years and more recently we started working with Specialisterne (specialisterne.ie) and AsIAm (asiam.ie) to help understand what a positive experience should look like for candidates and colleagues when hiring neurodiverse talent.  “We have taken their advice on how we can improve our existing processes, onboarding and training and they have also helped us to understand accommodations that may be needed.”  AsIAm is currently working with Permanent TSB’s Digital and Direct Office teams on a sensory review of the banks’ premises and facilitating training for managers.  “It’s important that managers have a core understanding of the realities of neurodiversity and have the strategies needed to respond and take action,” Conway explains.  “Our first Ability ERG workshop will be facilitated in October by the Irish Centre for Diversity and, from there, we will have a clear plan of action based on our colleagues’ feedback and their needs.” Best practice advice for employers Based on her own experience with Permanent TSB, Conway’s advice for other employers is that supporting the needs of employees who are neurodivergent starts right at the beginning of the employment relationship – the recruitment stage. “Standard recruitment practices can be a barrier. Aptitude tests or complex job descriptions and formal interview processes can be challenging – so working with external experts who can advise on any adjustments needed has been a big help for our team,” she says.  Accommodations should be considered relative to the built environment, communications and sensory supports.  “Simple adjustments, such as the lightbulbs we use, or having a decompression room available away from the open-plan office space if needed, can make a difference,” Conway says. “We’re also in the process of rolling out Microsoft 365 and a team of neurodiverse colleagues and allies have worked with IT to ensure that all accessibility features are switched on for all colleagues.  “To complement this, we aim to introduce a support toolkit to include, for example, noise-cancelling headphones and screen readers colleagues can order online.”    Also key to supporting employees who are neurodivergent is buy-in and input right from the top of the organisation. “The support of our own leadership at Permanent TSB has been very important for us,” Conway explains. “It’s great to try to start initiatives and broaden communications and training but without their support – and a willingness to be visible in their support – it would be very challenging.” Start today: first steps  So, what are the first steps employers can take now to begin implementing a workforce strategy that encompasses neurodiversity? “First, listen to the experts,” Conway says. “There are many organisations out there that understand the complexities and supports needed that can guide you – they have the answers so ask for advice as you map out a plan.”  Second, listen to your employees. “Most people now have a personal interest in making the workplace more neurodiverse inclusive, whether it’s from their own perspective, a family member’s or a friend’s,” Conway says.  “Listening to these employees, encouraging them to share their stories and helping them shape your strategy will build trust that is invaluable.”    Ultimately, implementing a workforce strategy that accommodates neurodiversity benefits everyone, Conway says: “It has a knock-on effect on how we interact with each other, our openness with each other, and comfort in sharing information. It is well worth the effort.” Written by Tess Tattersall and Elaine O’Regan  

Ireland’s true gender pay gap will only emerge when SMEs begin reporting and now is the time for this crucial business cohort to start preparing, writes Padraic Hayes Dr BJ Fogg, a renowned behaviour scientist at Stanford University, postulates in his book Tiny Habits that small but frequent incremental changes are often the safest and most effective approach to delivering extraordinary results. One hopes this hypothesis will ring true for the SME sector when it comes to preparing for gender pay gap reporting.  The first gender pay gap reporting obligation came into force in 2022 for companies with over 250 employees.  This will extend to SMEs with over 150 employees next year and even further in 2025 when companies with over 50 employees will also be obligated to commence reporting their first gender pay gap. These milestones are very significant when you consider that, according to the most recent Central Statistics Office figures, SMEs with fewer than 250 employees make up 99.8 percent of active enterprises in Ireland and employ 68.4 percent of the workforce. Gender pay gap reporting thus far has only covered the other one percent of Irish enterprises. We can therefore infer that we have yet to see Ireland’s true gender pay gap figure.  As a result, SMEs are going to be in the full glare of both industry and the media once their first reports are published in 2024. This could be Ireland’s de-facto ‘silver bullet’ solution to truly move the needle on the gender pay gap.  What is the gender pay gap? There continues to be a lot of confusion surrounding what exactly the gender pay gap is. It is defined as the difference between the average hourly wage of men and women in the workplace.  The gender pay gap is an assessment of the gender representation of men and women at each level of an organisation characterised by the overall difference in their pay.  For example, how many males and females are in the top quartile of an organisation’s earners versus the lowest quartile – i.e. how well-represented are females by comparison to males?  It is important that the gender pay gap is not confused with “equal pay for equal work”, which is already a legal obligation for employers in Ireland.  The gender pay gap can be caused by a variety of factors such as unconscious bias, company policies or the division of caring responsibilities in the home. According to the United Nations, women worldwide earn 77 cents for every dollar earned by men.  This suggests that over their lifetime, women’s earning potential is significantly less, a staggering realisation in the modern age.  In Ireland, the gap stands at 11.3 percent, which is slightly more favourable than the EU average of 13 percent (Eurostat). This still equates to about one month a year when a woman essentially works for free. It is important to point out also that this is not just a ‘female’ issue, but an economic issue that affects us all. The reduced earning potential for females affects the overall household income.  It is common for women to find it more cost-effective to stay at home to offset childcare costs, for example, and this places downward pressure on household income in an escalating cost-of-living crisis, and thus the cycle repeats.  For this reason alone, we should all feel motivated to proactively figure out the root cause of this socio-economic issue and break the chain once and for all.  Who needs to report and when? Currently, the obligation to report remains solely on organisations with over 250 employees. The first gender pay gap reports were published in December 2022 and the second are due in December 2023. Next year, however, the obligation will extend to all employers with more than 150 employees. The employers will pick a ‘snapshot’ date in June 2024 and report their gender pay gap metrics for the previous 12 months.  Crucially, the employer will also be required to provide the underlying reason why the gender pay gap exists and, more importantly, what actions they are planning to take to rectify it.  Furthermore, they will need to publicly publish their report either on their website or on the government portal planned for introduction later this year.  As SMEs look ahead to this new landmark reporting requirement, they will be taking the steps needed to ensure they meet these first-time obligations. Here is my advice on the steps you should take and the pitfalls you will need to avoid. Challenges for SMEs  Data collection from disparate systems The gender pay gap report will require inputs from a range of data sources. It is rare for any organisation, no matter what size, to be in a position to extract the data they need from a single source. Finance, payroll and HR systems are disparate in nature and contain data of differing quality. This challenge is amplified where spreadsheets persist in place of systems as the book of record. It can be time-consuming and challenging for non-technical users to extract, organise combine and compare this data and significant effort may be required to cleanse existing datasets in preparation for reporting.  Resourcing The amount of time and effort required to complete the gender pay gap report will be significant – it should not be underestimated. For SMEs, this could prove especially challenging because they are more likely to need to divert attention away from regular activities in situations where there is no dedicated reporting team. This may be especially challenging for the leadership team, who will be required to input into the report and sign it off. All of this increases the risk of introducing ‘bias’, akin to someone correcting their own homework so to speak, which you should avoid at all costs. Availability of expertise  Smaller organisations are highly unlikely to have access to the broad range of expertise needed to complete the gender pay gap report. To create a detailed report requires independent expert skills from a range of disciplines such as data analytics, visualisation and organisational change specialists.  Navigating legislative nuances The guidance in relation to how to report has evolved since the initial introduction of gender pay gap reporting. While many issues have been ironed out through the FAQs available on the government website (gov.ie), there are still nuances in the preparation of the report. My advice is to carefully study the available guidance to ensure you are compliant.  Comparing results While many organisations will be tempted to compare and contrast how they ‘measure up’ against their peers, it is worth bearing in mind that there is no right or wrong answer per se. The gender pay gap is a broad, multifaceted and pervasive issue that goes far beyond the numbers. Focus instead on assessing and improving the aspects of your own company practices, policies and culture that influence the gender pay gap – and your gender pay gap result will follow.  Best practice recommendations for SMEs Fail to prepare, prepare to fail It is important to be prepared for the questions you may get from your employees once your gender pay gap report is published. It is critical that you communicate the result of the report and ensure they fully understand what the data is saying and, more importantly, what it is not saying. It is very common for people to misunderstand the metrics contained in the gender pay gap report. As they say, good news travels fast, but bad news travels twice as fast – lead the narrative. Action planning In your final report, you need to provide a list of actions that you are going to follow to improve your gender pay gap in the 12 months ahead. Set goals for the next year in your report using the SMART (Specific, Measurable, Attainable, Relevant and Time-Bound) technique. It is worth noting again here the importance of focusing on your company practices, policies and culture – and take advantage of the opportunity for a yearly reset. Remember, “what gets measured gets done”.   Get help early on I cannot overstate this enough: get help early on. The requirements of your gender pay gap report may look straightforward at the outset, but do not be fooled.  Preparing such a report can be a time-consuming and intricate process requiring expertise in both data analytics and visualisation and organisational psychology, which together provide a complete assessment.  Moreover, significant input from departments and teams across the organisation will also be needed – typically human resources, finance and payroll, and senior management.  Final word Numerous organisations have come to us seeking help having realised just how complex preparing a gender pay gap report can be.  The best approach is to view it as an in-depth reporting process akin to an annual audit of your workforce analytics, practices, policies and culture.  Padraic Hayes is an Associate Director on Grant Thornton’s digital transformation advisory team and heads the firm’s gender pay gap service offering

Ronan McGovern, FCA, barrister and Stanford Scholar, talks about his experience living with ADHD and why more support is needed for neurodiversity at work  He is a Chartered Accountant, barrister and strategy manager with one of Ireland’s biggest banks but, for Ronan McGovern, the title he is most proud of is Stanford University Scholar. It was while studying for his MBA at the prestigious US university in 1996 that McGovern was first diagnosed with attention deficit hyperactivity disorder (ADHD). And it was through his continued work with Stanford that McGovern would go on to discover what he calls his “life purpose”. “In 2019, I was invited to work for six months on the Stanford Neurodiversity Project at Stanford Medical School, and it changed my life,” he explains.  “I discovered my unique offering to the world – what I was put on this earth to do; to be a neurodiversity champion and innovator.” His path to learning he had ADHD and discovering the world of neurodiversity was a long one, however. McGovern was already well into his thirties by the time he received his diagnosis. Although, these days, he views ADHD as the fuel powering “all the amazing things I have done in my life”, his experience growing up with the condition was not always positive. “I have been given these amazing gifts – academic excellence, creativity, ideas, energy, productivity – I stand out and I am authentically myself. I think differently but thinking differently wasn’t a good thing in the Ireland I grew up in,” he says. “In Irish society in the sixties and seventies, there was a very homogenous culture. Being different generally meant you were punished.” Early years McGovern grew up in the west Dublin suburb of Palmerstown and started primary school in 1965.  “It was long before there was any recognition of neurodiversity and I have to say I learned very little because my mind was always wandering,” he says. “Everybody’s mind wanders, but for an ADHD person, the inattention and mind-wandering are pronounced. The teachers had no idea I wasn’t learning anything. I just basically sat in class not telling them.” By the time he was ready to progress to secondary school in 1975, corporal punishment was still very much part of “the school culture” in Ireland, McGovern says.  “Some teachers saw me as what, in those days, they might have called a ‘a bold boy’, disrupting the class and with no apparent interest in learning,” he reflects. “During my time at secondary school, I would say corporal punishment was used on me maybe four or five times more often than my peers. “There was also shaming of different descriptions – I remember being put outside the door of the classroom as punishment – but that kind of treatment wasn’t exclusive to my secondary school at that time.” Despite this, McGovern’s academic performance remained strong throughout his school years with his exam results “ranging from average to top of the class”. “I believed in myself,” he says now. “Sometimes I was made to feel ‘less than’; I was shamed and ridiculed for being honest and straightforward, but throughout it all, I always believed in myself.” Path to diagnosis After leaving school, McGovern went on to train with a small accountancy practice and joined PricewaterhouseCoopers’ Dublin office in the early eighties. “In 1993, I was accepted into the MBA programme at Stanford Business School. The tuition at that time was about €30,000 per quarter so I decided to apply for a transfer to PwC New York for the sole reason of earning the money I would need to join the Stanford programme,” he says.  McGovern began his MBA studies in 1995 and was about eight months in when he was approached one day by one of his classmates.  “She said to me, ‘Ronan, I want to ask you a question. Have you ever heard of ADHD?’ I said no. She explained the condition and said that she had been watching me in class and believed I may have it,” he explains. “She was a doctor, and she knew a lot about autism and ADHD. She gave me a reference to the Stanford Medical Centre and told me they would point me in the direction of an educational psychologist who could assess me.”  Following a 10-hour assessment by an educational psychologist in Palo Alto, McGovern received a 15-page report.  “It told me that I had what was called Combined ADHD; a combination of hyperactivity and inattention. That was in early June 1996,” he says. “At the time, I felt a bit of sadness over the fact that I had not been diagnosed earlier, but I also felt a bit of relief and then excitement. My final observation was: Let me see what I can do in the future now that I have this diagnosis.” In the years since, McGovern has come to view his ADHD as “a gift”. “I bring creativity and ideas to the table,” he says, “an understanding of how everything is connected, be it biology, business or machine learning. That has really stood to me in my life and work.” Stanford Neurodiversity Project McGovern took a six-month career sabbatical in 2019 and returned to California to take part in the Stanford Medical School Neurodiversity Project. Led by Dr Lawrence Fung, the aims of the Stanford Neurodiversity Project include maximising the potential of neurodiversity and establishing a culture that treasures the strengths of neurodiverse individuals.  It defines neurodiversity as “a concept that regards individuals with differences in brain function and behavioural traits as part of normal variation in the human population” and says, “the movement of neurodiversity is about uncovering the strengths of neurodiverse individuals and utilising their talents to increase the innovation and productivity of society as a whole”. Following his six-month stint on the neurodiversity project, McGovern took part in Stanford Rebuild Innovation Sprint, launched in 2020 to help develop solutions for the challenges and opportunities society would face in the wake of the COVID-19 pandemic. “Stanford invited alums and others to initiate an entrepreneurial project aimed at rebuilding society,” he explains. “Professors gave their time to assist volunteers and I volunteered to do something on neurodiversity in business and formed a core team with Susan O’Malley, an Irish Stanford business school alum, and Tiffany Jameson, a neurodiversity consultant.  The group recruited 50 other volunteers and, “over three months in the summer of 2020, we all co-authored our Stanford Rebuild Report,” McGovern says. “When our Rebuild project drew to a close that August, we formed NDGiFTS to prevent this work coming to an end.” NDGiFTS stands for Neurodiversity Giving Individuals Full Team Success and is, McGovern explains, a movement dedicated to building a “global community whose aim is to increase the inclusion and celebration of neurodiversity at work”.  To this end, NDGiFTS has produced a 78-page report, available at ndgiftsmovement.com, with input from 70 contributors and insights from 300 stakeholders worldwide. NDGiFTS’ mission “The mission of the NDGiFTS movement is to prove that neurodiverse individuals are worth investment from organisations who stand to reap the reward of innovation,” McGovern says. “Our core belief is that the neurodivergent individual, when appropriately supported and embraced, brings cultural and economic advantages to the workplace, including creativity, innovation and entrepreneurial energy.”  According to McGovern, as many as 20 percent of people worldwide have neurodivergent conditions ranging from ADHD and autism spectrum disorder to dyslexia, dyscalculia and dysgraphia. “Even now, all these years since my diagnosis, the sad truth is that society has not yet built the structures to support and service people who are neurodiverse,” he says. “This applies as much to the business environment, apart from a very small minority of companies, Goldman Sachs being a particular exception to the rule.” In 2019, the US banking giant launched the Goldman Sachs Neurodiversity Hiring Initiative, an eight-week paid internship for people who identify as neurodiverse. “It went on to hire more than 50 neurodivergent people over three years. Every one of the participants in that internship programme was made a permanent employee,” McGovern says. As it stands, however, Goldman Sachs remains the outlier with few organisations having made the same strides in neurodiversity inclusivity. McGovern is, meanwhile, once again partnering with Stanford University to publish a book in 2024 that will detail his experiences growing up and living with ADHD. “My own experience of work was that my experience at school carried through to my professional life. When I was challenged to progress in a certain role, I found the perception was that I didn’t fit the mould of my other colleagues,” he says. “My message now is that we need to focus on the intentional recruitment of the neurodiverse talent base, similar to the Goldman Sachs model. “I would like employers to look at my personal journey and start thinking seriously about neurodiversity and the potential of people like me.  “My story is not unique, but I think I can help to open a serious conversation about neurodiversity in Ireland and around the world. We should not have a society where people spend all their time swimming against the tide.” Written by Elaine O’Regan

Accountants will be the profession best placed to bring the necessary rigour to the analysis and governance of critical data in the age of AI, writes Sharon Cotter Canadian philosopher Marshall McLuhan has suggested: “We become what we behold. We shape our tools, and thereafter our tools shape us”. This is important to remember today, when the spotlight is on the potential consequences, intended and unintended, of the artificial intelligence (AI) tools being shaped by humans. The rise of AI AI encompasses a vast range of computer science research. Since the 1950s, scientists have pursued the goal of building machines capable of completing tasks that normally require intelligent human behaviour.  Machine learning (ML), a subset of AI, enables machines to extract knowledge from data and to learn from it autonomously.  In the past decade, the exponential increase in the volume of data generated, captured, stored and available for analysis, coupled with advances in computing power, have created the impetus and means to rapidly advance ML, which in turn has facilitated the development of narrow AI applications.  In essence, narrow AI applications are computer programs, or algorithms, specifically trained, using very large datasets, to carry out one task, or a limited number of tasks. Best suited to tasks that do not require complex thought, narrow AI algorithms can often accomplish such tasks better and more swiftly than humans.  Most of the AI capability we use today is narrow AI – from Alexa and Siri, which carry out human voice commands, to ChatGPT and Bard, which generate output based on conversational text prompts, and Dall-E2, which generates visual images based on text prompts, to name but a few.  In the field of accounting, we can utilise coding languages and software tools such as Python, ‘R’ and Alteryx to generate predictive forecasts and models.  We often use these tools without realising that we are using elements of narrow AI. For example, these programming languages and software tools embed many of the statistical algorithms that allow us to easily carry out linear regression analysis, a common method of predicting future outcomes based on past data. Adapting to broaden our role The word ‘computer’ was first coined by the English poet Richard Brathwaite in 1613 to describe a person who carried out calculations or computations. For the next 350 years or so, most humans who needed to perform calculations used mental arithmetic, an abacus or slide rules until the widespread availability of electronic handheld calculators in the 1970s. As accountants, we have seamlessly adapted to the tools available to us – whether these are an abacus, double-analysis paper, a totting machine, or computer software tools like Excel and Alteryx.   The use of these tools, and the time saved by their use, have allowed us to broaden our role from recording, summarising and presenting the underlying economic transactions to providing a much wider range of useful information to decision-makers both within, and outside, organisations.  This is reflected in commentary from the professional accountancy bodies emphasising the importance of good organisational decision-making and suggesting that the core purpose of our profession should be to facilitate better decisions and identify the business problems that better decisions will resolve. Asking the right questions In 1968, Pablo Picasso is reputed to have said: “Computers are useless. They can only give you answers”. While the remark may have been dismissive of the then cumbersome mainframe computer, it does encapsulate the notion that the real skill lies in figuring out the right question to ask, as this requires both judgement and creativity.  Useful, timely and relevant information for decision-making can only be produced if the right question is asked of the right data at the right time. On the face of it, this seems simple and straightforward, but in practice it is often much more difficult to achieve.  Deciding what question to ask requires knowledge of the business context, and an understanding of the issue being addressed as well as an ability to clearly articulate the issue. Critical thinking is key to identifying what answers are needed to identify the range of solutions for the issue at hand. Deciding what data is appropriate to use in the analysis requires an understanding of what data is available, where it is stored, how it is stored, what each data element selected represents, how compatible it is with other data, and how current that data is. It also requires knowledge of the limitations posed by using particular sets of data. Being able to generate the answer to the right question using the right data is only relevant if it can be produced at the point at which this information is needed. Sometimes, not all the data needed to answer the question is readily available, or available in the required format. Data from several sources may need to be combined and, where data is incomplete, judgement will be needed on the assumptions necessary to generate a relevant and timely set of data. Accountants are well-positioned The skills, experience and mindsets we develop as part of our professional training positions accountants well to provide the best possible decision-enabling information to decision-makers.  Scepticism is a key tenet of our profession. We look to spot anomalies in data and information, and to question the information by asking “does it make sense?” We are trained to be methodical, thorough and to look beyond the obvious. Training and experience enable us to develop our professional judgement, which we apply when determining what is relevant, appropriate and faithfully represents the underlying economic transactions.  We are adaptable and flexible in the tools we use, and aware of the need to stay up to date with the law and regulation applying to the storage and use of data. In short, we are valued problem-solvers and critical thinkers. Accountants’ ‘jurisdiction’ In his book The System of Professions: An Essay on the Division of Expert Labor, Andrew Abbott uses the term ‘jurisdiction’ to represent the link between a profession and its work.  Jurisdiction is an important concept, as the acknowledged owner of a task is likely to be able to shape the characteristics of that task. In the context of accountants’ work, the term ‘jurisdiction’ means the extent to which organisations, and society, accept that due to their professional expertise, only specific roles and responsibilities should be carried out by accountants.  Within organisations, accountants’ jurisdiction is not static. The roles and responsibilities that fall within their remit can, and do, change.  The jurisdiction of accountants can be encroached upon. Others within the organisation may also have expertise allowing them to claim work once exclusively identified with accountants. Challenges to jurisdiction The emergence of new roles, such as data or information specialists, who collect, clean and analyse data, has meant that complex analysis of financial information can now be done by non-accountants.  Some organisations have explored ways in which operational managers and decision-makers can be given direct access to financial systems.  Known as ‘self-service’ menus, such direct access to information allows decision-makers to drill down into the detail of transactions – for example, to identify the underlying causes of deviations from budget, all without the need to consult with their colleagues in the finance department.  If an organisation transfers responsibility for data analysis and decision support to data specialists and/or decision-makers, then the jurisdiction of the accountant may be narrowed or reduced. Opportunities for role expansion Equally, however, accountants’ roles and responsibilities can be increased, resulting in their jurisdiction being broadened or expanded.  The expansion of an accountant’s role requirements can either result from increased job tasks and responsibilities, or from changes in the tools and technologies available to carry out these tasks and responsibilities.  Recent research and professional body commentary has, for example, explored the extent to which management accountants have embraced changes in their role or taken on wider responsibilities, such as business partnering.  Multiple elements such as role identity, the ability to embrace change in a positive way and developing strong communication skills, to name but a few, all contribute to the successful adoption of additional responsibility. Futureproofing with digital fluency The rapid and on-going development, enhancement and availability of software tools that can be used to capture, store, identify, slice and dice data, and present information in visual graphics, are forcing accounting professionals to consider the level of IT competency required to operate efficiently and effectively in today’s digital world.   Professional accountancy bodies emphasise the importance of digital skills in futureproofing the accountant’s role while many of the larger multinational companies espouse the need for finance staff to have good digital fluency. Challenges and opportunities Both encroachments and expansions to the jurisdiction of accountants bring their own set of challenges and opportunities.  Maintaining, and expanding, accountants’ jurisdiction over the integrity of data, and the provision of information for decision-making, should be a key part of the profession’s strategy in the digital age.  I believe that the ‘governance’ of data, rather than the use of specific AI tools, should be the focus of the accountancy profession when formulating strategies for its future direction. In addition to enhancing our digital skills, we need to consider strategies such as adapting and changing the role of the chief financial officer to include overall direct responsibility for data analytics.  The governance, management and analysis of data should be as important as traditional responsibilities in finance.  Governance of data requires rigour and objectivity to ensure that its integrity is preserved. We should noticeably stake our claim as the profession best placed to bring that rigour and objectivity to the governance and analysis of data used for decision-making.  Failure to consider such strategies may mean we increase the risk that encroachments rather than expansions to our role – our jurisdiction – will become a reality. We should strive to ensure that our future role is shaped by us rather than by these new digital tools and techniques. Sharon Cotter, FCA, lectures in accounting and finance at the University of Galway

As we approach the final months of 2023, three Chartered Accountants take a moment to contemplate the hurdles Ireland has surmounted and share their aspirations for the remainder of the year Sinéad Nolan Financial Accountant AXA Insurance The economy is fine on paper (GDP and domestically); however, housing is a major issue, in both affordability and availability. The cost-of-living crisis is only exacerbating a problem that was already there for young professionals starting off their careers. Paying rent is a continuous challenge, as is looking for an affordable house to purchase. The interest rates keep rising, and house prices don’t seem to be reducing. Many in the country felt the challenge of paying bills in the wintertime. On top of that, there has been a lot of uncertainty with the war in Ukraine.  On the plus side, there has recently been slight moderation in the price of energy and in inflation, and the pleasant weather in June was a bonus! (Less pleasant in July, admittedly.) Also, the unemployment rate in the Republic of Ireland fell to a record low of 3.8 percent in May. To help, my employer has hosted many financial wellness webinars, which, given the current economic crisis, have been great.  We also received a well-being day off, not to mention personal interaction is happening in the office again – we are attending social events, which is brilliant.  As for the rest of the year, I hope the housing crisis settles, and there is more support given to first-time house buyers from the Government. I joined the Young Professionals Committee in July after attending the wonderful Pride BBQ in June. I am looking forward to organising and hosting events, and connecting with other members of the Institute. The Young Professionals Committee is a great networking platform, so I am very excited to get stuck in with it. Jim Stafford Consultant Friel Stafford I work every day at the coalface, advising companies and individuals who are dealing with financial challenges, and thus I appreciate the issues facing the economy.  While there is an economic brew of uncertainty caused by inflation, geopolitical issues, etc., the biggest impact we have seen this year has been the dramatic increase in interest rates, which has shaken some people to the core.  We have observed a noticeable increase in Members Voluntary Liquidations from businesspeople who are deciding to ‘cash in their chips’ now rather than face future uncertainty.   One of the positives that I have always enjoyed when working with people under financial pressure is recognising the levels of resilience people have. On the ‘resilience spectrum’, I am delighted to see some clients who bounce back stronger than ever.   The highlight for me personally this year was the sale of Friel Stafford to Ifac, which will enable us to provide restructuring services such as the Small Company Administrative Rescue Process (SCARP) across Ifac’s 30+ offices.  The association with Ifac has moved us into the top ten accountancy firms in Ireland, which has opened the doors to certain types of work, making it easier for us to attract and retain talent.  A big development during the year was the growth of artificial intelligence (AI). While there is great potential for generative AI to change the workplace, there is also huge scope for more sophisticated fraud.  Looking to the year ahead, a big challenge for some businesses will be the ending of the Revenue warehousing scheme, which was a valuable lifeline for many.  We expect to see an increased number of SCARPs next year.  Another big challenge for some firms will be the Companies Registration Office and the Corporate Enforcement Authority increasing their enforcement activity on companies that are struck off. Gordon Naughton  Chief Executive Officer Tactive   January represented a strange and uncertain time for the Irish and global economy. Many initiatives were placed on hiatus due to significant inflationary, economic and geopolitical concerns.  In January, it was startling to see how quickly the mood had shifted from November and December. Since then, the business community and consumers have learned to live with these concerns and are in a positive state of mind.  Currently, the Irish economy is showing tremendous resilience, with the overall tax intake and consumer spending being unexpectedly high. It seems the country is forging ahead. However, if the past three years are a barometer for future challenges, predicted and day-to-day issues tend to be easy to deal with. It’s the unpredicted challenges that can pose the most difficulty.  My key lesson from this period is that businesses need to be agile, efficient and have contingency plans for the three main ways an economy can move – up, down or steady on.  Luckily, I have great clients, a good support structure and network that has brought me through any uncertainty. I am so lucky to work from home and spend time with my wonderful family.  Continuous learning is a facet of my life, as I simply like reading and expanding my knowledge. This year I obtained a black belt in Lean, which has helped me professionally and personally.  As for the rest of 2023, I hope to continue to work with outstanding clients.   

The Digital Services Act aims to better protect users in the online world, but its requirements will impose many new obligations on service providers, say Mary Loughney, Shane O’Neill and Filipa Sequeira The increased use of digital technology dramatically raises the chances of end users being exposed to illegal or harmful online content. Regulations and laws are catching up with the fast-paced world of emerging digital services and online platforms to ensure online services’ security, accountability and openness.  The Digital Services Act (DSA), an EU regulation, aims to modernise the digital landscape and defend users’ rights. What digital services does the DSA cover? The DSA encompasses a broad range of online intermediaries, including internet service providers, cloud services, messaging platforms, marketplaces and social networks.  Hosting services, such as online platforms (a hosting service provider that “stores and disseminates to the public information, unless that activity is a minor or purely secondary feature of another service”), social networks, content-sharing platforms, online marketplaces and travel/accommodation platforms, have specific due diligence obligations.  The DSA’s most significant regulations target very large online platforms, with a substantial societal and economic impact reaching a minimum of 45 million EU users, representing 10 percent of the population.  Similarly, very large online search engines with over 10 percent of the EU’s 450 million consumers will have greater responsibility for combating illegal content on the internet. Key provisions of the DSA The DSA outlines specific responsibilities for online platforms, including big platforms, intermediaries and hosting service providers.  Due to their significant societal impact, the Act introduces categories called Very Large Online Platforms (VLOP) and Very Large Online Search Engines (VLOSE), which are subject to stricter regulations and audit requirements.  An independent audit must cover all the obligations imposed on VLOPs and VLOSEs by the DSA, including the duties to remove illegal content, provide users with transparency about how their data is used and prevent the spread of disinformation.  The following focus areas are central to the DSA’s requirements: Due diligence around safety and content moderation: The DSA lays out guidelines to address illegal content, such as hate speech, terrorist propaganda and fake goods. Online platforms must set up efficient content moderation systems and offer ways for users to report unlawful content. This may involve using automated tools for detection and removal. User rights and transparency about terms of service, consent, algorithms and advertising practices: Companies must offer more transparency about how their platforms operate, including their terms of service, algorithms and advertising practices. This will help users to understand how their data is being used. Users’ ability to control their privacy settings and flag harmful content: Companies must provide users with tools to manage their privacy settings and flag harmful content. This will help users to protect their personal data and keep themselves safe online. Companies are also required to respond to flagged content within a reasonable timeframe. Measures to prevent the spread of disinformation: Companies must take steps to prevent the spread of disinformation, such as by labelling sponsored content and providing users with access to reliable information. This may involve working with fact-checking organisations or other companies to share information about disinformation. Accountability for the content hosted on platforms: Companies must be accountable for the content hosted on their platforms. This means they must be able to remove illegal content promptly and co-operate with law enforcement authorities. With these provisions in mind, a sensible place to begin your journey may involve conducting a maturity assessment using a risk-based approach so the organisation is aware of the risks that require mitigation: Maturity assessment: The risk assessment should consider a range of factors, such as the nature of the platform, the type of content hosted and the potential for harm to users. Address DSA requirement gaps: As a result of the risk assessment, organisations should identify their exposed risks and implement necessary measures, which include enhancing content moderation tooling, increasing transparency and enabling more robust end-user control mechanisms. Compliance reporting: Organisations would be required to comply with third-party external audits. While that audit would evaluate the platform’s systems and processes, compliance reporting may also include information on overall risk mitigation efforts. The challenging aspects of the DSA’s audit requirements To ensure compliance with the DSA’s provisions, digital service providers, predominantly VLOPs and VLOSEs, will be subject to independent audits. The audit must be conducted in accordance with the methodology and templates established in the delegated regulation, and the audit should review whether the VLOP or VLOSE: has a clear and transparent policy on how it addresses illegal content; has a system in place for detecting and removing illegal content and preventing the spread of disinformation; and provides users with adequate transparency about how their data is used. The audits will evaluate the platform’s efforts to deal with illegal content, the openness of content moderation procedures, adherence to DSA requirements, and the efficiency of user reporting mechanisms. The platform’s practices for data security and privacy will also be examined.  It will be challenging for online intermediaries to comply with some DSA requirements.  Accurate classification of digital services The DSA distinguishes between different types of digital services, such as intermediaries, hosting services and online platforms. Assigning the correct classification to a specific service can be complex, especially for hybrid platforms with multiple functionalities. Accurately defining the obligations and responsibilities associated with each classification requires careful analysis. Removing illegal content in a timely manner The DSA requires the removal of unlawful content in a timely manner after being made aware of its existence. Implementing effective content moderation mechanisms while respecting freedom of expression and avoiding over-removal or under-removal of content is a complex task. Developing sophisticated algorithms and human review processes to strike the right balance poses significant technical and operational challenges.  Further transparency about how content is moderated  The DSA requires more transparency about how online intermediaries moderate content. This includes providing information about the criteria used to moderate content, the processes used to make decisions and the appeals process available to users who flag moderation issues.  It can be difficult to require online intermediaries to disclose sensitive information about their internal operations. Additional steps to protect users’ privacy rights  The DSA requires additional steps to protect users’ privacy and enhance users’ rights. This includes transparency, user control over content and redress mechanisms.  These new provisions can be challenging to implement as they require online intermediaries to change their business practices significantly.  Implementing user-friendly interfaces and operative-complaint resolution mechanisms to ensure seamless user experiences can be technically complex and resource intensive. Compliance with new rules on targeted advertising  The DSA introduces new rules on targeted advertising. These rules prohibit online intermediaries from using sensitive personal data to target users with ads, and they require online intermediaries to give users more control over the ads they see.  Co-operation with authorities The DSA emphasises co-operation between platforms and regulatory authorities.  Ensuring information sharing, responding to legitimate requests and establishing effective communication channels with various national authorities across the EU pose many challenges. Maintaining confidentiality and data protection while complying with these requirements can be tricky. Interpretation of the DSA The interpretation of the DSA may evolve as it undergoes the legislative process. As such, there are themes associated with how one might expect an audit will be conducted: Transparency: The audits must be conducted transparently. Accountability: The audits are designed to ensure that VLOPs and VLOSEs are accountable for compliance with the DSA. Effectiveness: The audits must effectively identify and address any compliance gaps. Proportionality: The audits must be proportionate to the size and complexity of the VLOPS and VLOSEs. Flexibility: The delegated regulation allows auditors to adapt the audit methodology to the specific circumstances of the VLOP or the VLOSE. These are just some specific requirements that are tricky and complicated to implement. However, the DSA is essential to creating a safer and more accountable online environment. Best practice The table above displays exemplary and tactical actions that could be considered when enhancing users’ privacy rights and transparency about terms of service, consent, algorithms and advertising practices. In addition to these specific steps, companies should consider implementing several general best practices: A well-defined risk management framework: Establishing ongoing risk assessment activities will help companies identify and mitigate user risks. A culture of compliance: This will help ensure that all stakeholders are aware of the DSA requirements and committed to complying with them. A robust process for responding to incidents: This will help companies to respond quickly and effectively to any incidents that may arise. An oversight process for monitoring and reporting on compliance: This will help companies track their progress and identify areas where they may need to improve. A trustworthy online environment The DSA represents a significant step toward regulating online platforms and digital services within the EU. By introducing audit requirements, the DSA enhances transparency, accountability and user protection in the digital world. Independent audits will serve as a mechanism to ensure compliance with the DSA’s provisions, thereby fostering a safer, fairer and more trustworthy online environment. Mary Loughney is Director and Head of Technology Risk Consulting at Grant Thornton  Shane O’Neill is Partner and Head  of Technical Change, Financial Services Advisory at Grant Thornton  Filipa Sequeira is Senior Consultant of Financial Services Advisory at Grant Thornton

Recent European heatwaves have highlighted the impact climate change has on society and the economy. Susan Rossney explores the challenges facing Irish businesses when taking steps to tackle the crisis Recent severe heatwaves in continental Europe have shown how the effects of global warming are coming ever closer to home. Forced migration, drought, forest fires and biodiversity loss are some of the many ways climate change will impact Irish society.  Its impact on the economy will be acute, affecting everything from the health and wellness of employees to the cost of raw materials, scarcity of resources and supply chain disruption.  Ireland and climate change Climate change poses risks to humans, nature and Ireland as a nation.  Ireland is legally bound to meet ambitious national and international climate targets. According to the Climate Change Advisory Council (CCAC), an independent advisory body, Ireland will not meet the climate targets it has set for itself in the first and second carbon budget periods. The Environmental Protection Agency’s (EPA) provisional estimates on 2022 greenhouse gas emissions show that Ireland already used 47 percent of the carbon budget for 2021–2025 in the past two years.  An annual reduction of 12.4 percent is now required for each of the remaining years if Ireland is to stay within budget.  However, as emissions fell only 1.9 percent in 2022, this has been described as “extremely challenging” by the EPA.  It is clear that action is required across all sectors of the economy and society, including: Mitigation: reducing activity that causes climate change, like burning fossil fuels (coal, oil and gas); and Adaptation: making changes to deal with the effects of climate change, from operational changes to cope with rising summer temperatures or winter flooding to factoring in the risk of developing stranded assets and increased carbon tax liabilities. Ireland’s perception of climate change According to Climate Change in the Irish Mind, EPA research conducted in 2021, most Irish citizens share a desire for action on the climate crisis.  However, other EPA research has found that our emissions of greenhouse gases (GHGs) continue to rise.  Environmental Indicators Ireland 2022, published by the Central Statistics Office (CSO), shows that Ireland’s 2022 emissions were 11 percent higher than in 1990.  Enterprises contributed an estimated 12.7 percent to Ireland’s overall emissions in 2018, according to the Climate Action Plan 2023. Although this is less than the contributions of other sectors, there remains a need for Ireland’s enterprises to take action to reduce their emissions.  However, a 2022 national survey of 380 SMEs and larger enterprises across industry and service sectors by Microsoft and University College Cork found that Irish businesses are underprepared to make the necessary changes to transition to a net zero future. According to the study, 86 percent have no commitments or targets to decarbonise.  Barriers to action  In the face of evidence of climate change – and Ireland’s willingness to take action – what is preventing Irish businesses from responding to the crisis?  As an issue, climate change is complicated, abstract and overwhelming. Multiple interdependent factors cause it, and it is nearly impossible to avoid contributing to it in our daily lives. Buying products, driving a car or taking a flight for a foreign family holiday (full disclosure: I’m just back from one) all add to the overall problem. The solutions to the climate crisis are also interdependent and complicated. The positive changes we can make as individuals can feel insignificant, especially compared with large countries’ continued pollution.  The European Commission’s Annual Report on European SMEs 2021/22 – SMEs and environmental sustainability identified access to finance, limited expertise and skills, and regulatory and administrative barriers among the challenges facing SMEs in particular. Businesses that want to take climate action often have limited time, cash flow, resources and support (both financial and non-financial) to take action.  Knowledge is also a barrier. Many professionals qualified at a time when climate change was not identified as a business risk. They now find themselves having to skill up mid-career in an area that is famous for changing frequently.  Finally, many citizens and businesses are still struggling with crises related to COVID-19, inflationary pressure, supply chain disruption and high energy costs. Staying afloat is a crisis in itself.  Firms, particularly SMEs, focusing on the practicalities of running a business, paying staff and grappling with cash flow and costs are more likely to see climate action as the responsibility of governments or, at the very least, large corporations rather than them.  On top of that, climate discussions are often politicised. They are regularly reduced to a ‘them vs us’ polarised debate in mainstream media rather than discussing how everyone can work together to deliver solutions.  Threats and opportunities  For businesses, climate change presents both threats and opportunities.  Threats The threats have been categorised as physical risks (both ‘acute’ and ‘chronic’) and transitional risks.  Opportunities  Taking action on the climate crisis enables businesses to restore lost ecosystems, improve air quality, community health and well-being, and avail of the opportunity to make a lasting positive impact. There are additional advantages to consider: Reduced costs – the Sustainable Energy Authority of Ireland (SEAI) estimates that the average SME can save up to 30 percent on its energy bill by becoming more energy efficient (improved heating and lighting, lower maintenance of electric vehicles, efficient water and materials management and using recycled materials with a lower climate impact all contribute to lower costs);  Reduced reliance on exposure to fluctuating oil and gas prices from switching from fossil fuels (coal, oil and gas) to renewable energy sources; Reduced exposure to carbon tax, which is increasing €7.50 per tonne to €100 per tonne in 2030; Access to grants, allowances and tax reliefs; Improved access to capital and finance from investors and lending looking to ‘green’ their portfolios; and A competitive edge in attracting talent, clients and customers. Steps to climate action Businesses looking to take action on the climate crisis can take several steps: Build your knowledge. There are many resources out there, several provided by the Government and Chartered Accountants Ireland. Begin measuring emissions with tools like the Government’s Climate Toolkit for Business.  Consider an internal energy audit to find ways of reducing your carbon footprint. SEAI maintains a list of registered energy auditors and offers SMEs a €2,000 voucher towards the audit cost. Consider setting up an internal environment and climate impact team to devise a decarbonisation plan.  See also the Sustainability Glossary in the Sustainability Centre of the Chartered Accountants Ireland website.  For more, see www.charteredaccountants.ie/sustainability-centre/sustainability-home Susan Rossney is Sustainability Officer at Chartered Accountants Ireland Reporting and climate change The Corporate Sustainability Reporting Directive (CSRD) is an EU Directive requiring certain companies to disclose information on sustainability-related impacts. It proposes significant changes to how entities report on their business’s environmental, social and governance (ESG) impacts. These changes will affect many enterprises – directly and indirectly.  Businesses ‘in scope’ of the CSRD are required to consider their supply chain when reporting on sustainability matters. This will mean that companies not in scope that form part of a supply chain may be asked to provide climate-related information by companies in scope. Small companies should prepare for this and have a mechanism to measure and disclose their carbon emissions. For more on the CSRD, see the Chartered Accountants Ireland Technical Hub. Dee Moran is Professional Accountancy Lead at Chartered Accountants Ireland  

Michael Diviney and Níall Fitzgerald explore the ethical challenges arising from artificial intelligence (AI), particularly ‘narrow’ AI, and highlight the importance of ethics and professional competence in its deployment Earlier this year, artificial intelligence (AI) industry leaders, leading researchers and influencers signed a succinct statement and warning: “Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.” Was this a publicity stunt? Well, probably not, as the generative AI ChatGPT was already the fastest-adopted application in history.  Was this an over-the-top, alarmist statement by a group possibly trying to steal a march on self-regulation of a rapidly emerging technology and growing industry?  Again, this is unlikely if one considers the warnings of pioneer thinkers like Nick Bostrom, Max Tegmark, Stephen Hawking and Astronomer Royal Martin Rees. They concur that there is an existential threat to humankind if human-level or ‘general’ AI is developed and the ‘singularity’ is reached when AI surpasses human intelligence.  Autonomous weapons and targeting are a clear risk, but more broadly, unless we can ensure that the goals of a future superintelligence are aligned and remain aligned with our goals, we may be considered superfluous and dispensable by that superintelligence.  As well as the extinction threat, general AI presents other potential ethical challenges.  For example, if AI attains subjective consciousness and is capable of suffering, does it then acquire rights? Do we have the right to interfere with these, including the right to attempt to switch it off and end its digital life?  Will AI become a legal entity and have property rights? After all, much of our economy is owned by companies, another form of artificial ‘person’. Ethical challenges from ‘narrow’ AI Until general AI is here, however – and there is informed scepticism about its possibility – the AI tools currently in use are weak or ‘narrow’ AI. They are designed to perform a specific task or a group of related tasks and rely on algorithms to process data on which they have been trained.  Narrow AI presents various ethical challenges:  Unfairness arising from bias and opacity (e.g. AI used in the initial screening of job candidates include a gender bias based on historical data – in the past more men were hired); The right to privacy (AI trained with data without the consent of the data subjects); Threats to physical safety (e.g. self-driving vehicles); Intellectual property and moral rights, plagiarism and passing-off issues in the use of generative AI like ChatGPT and Bard; and Threats to human dignity from the hollowing out of work and loss of purpose. Regulation vs. ethics Such issues arising from the use of AI, particularly related to personal data, mean that regulation is inevitable.  We can see this, for example, with the EU’s landmark AI Act, due to apply by the end of 2025, which aims to regulate AI’s potential to cause harm and to hold companies accountable for how their systems are used. However, as Professor Pat Barker explained at a recent Consultative Committee of Accountancy Bodies (CCAB) webinar, until such laws are in place, and in the absence of clear rules, ethics are required for deciding on the right way to use AI.  Even when the regulation is in place, there are likely to be cases and dilemmas that it has not anticipated or about which it is unclear. Legal compliance should not be assumed to have all the ethical issues covered, and as AI is evolving so quickly, new ethical issues and choices will inevitably emerge.  Ethics involves the application of a decision-making framework to a dilemma or choice about the right thing to do. While such a framework or philosophy can reflect one’s values, it must also be objective, considered, universalisable and not just based on an instinctual response or what may be expedient. Established ethics frameworks include: the consequentialist or utilitarian approach – in the case of AI, does it maximise benefits for the greatest number of people?; and the deontological approach, which is based on first principles, such as the inalienable rights of the individual (an underlying philosophy of the EU’s AI Act). (The Institute’s Ethics Quick Reference Guide, found on the charteredaccountants.ie website, outlines five steps to prepare for ethical dilemmas and decision-making.)  A practical approach While such philosophical approaches are effective for questions like “Should we do this?” and “Is it good for society”, as Reid Blackman argues in Harvard Business Review, businesses and professionals may need a more practical approach, asking: “Given that we are going to [use AI], how can we do it without making ourselves vulnerable to ethical risks?”  Clear protocols, policies, due diligence and an emphasis on ethical risk management and mitigation are required, for example responsible AI clauses in agreements with suppliers. In this respect, accountants have an arguably competitive advantage in being members of a profession; they can access and apply an existing ethical framework, which is evolving and adapting as the technology, its opportunities and challenges change.  The Code of Ethics The International Ethics Standards Board for Accountants (IESBA) recently revised the Code of Ethics for Professional Accountants (Code) to reflect the impact of technology, including AI, on the profession. The Chartered Accountants Ireland Code of Ethics will ultimately reflect these revisions.  IESBA has identified the two types of AI likely to have the most impact on the ethical behaviour of accountants:  Assisted intelligence or robotic process automation (RPA) in which machines carry out tasks previously done by humans, who continue to make decisions; and  Augmented intelligence, which involves collaboration between human and machine in decision-making. The revisions also include guidance on how accountants might address the risks presented by AI to ethical behaviour and decision-making in performing their role and responsibilities.  Professional competence and due care The Code requires an accountant to ensure they have an appropriate level of understanding relevant to their role and responsibilities and the work they undertake. The revisions acknowledge that the accountant’s role is evolving and that many of the activities they undertake can be impacted by AI.  The degree of competency required in relation to AI will be commensurate with the extent of an accountant’s use of and/or reliance on it. While programming AI may be beyond the competency of many accountants, they have the skill set to:  identify and articulate the problem the AI is being used to solve;  understand the type, source and integrity of the data required; and assess the utility and reasonableness of the output.  This makes accountants well placed to advise on aspects of the use of AI. The Code provides some examples of risks and considerations to be managed by professional accountants using AI, including: The data available might not be sufficient for the effective use of the AI tool. The accountant needs to consider the appropriateness of the source data (e.g. relevance, completeness and integrity) and other inputs, such as the decisions and assumptions being used as inputs by the AI. This includes identifying any underlying bias so that it can be addressed in final decision-making. The AI might not be appropriate for the purpose for which the organisation intends to use it. Is it the right tool for the job and designed for that particular purpose? Are users of the AI tool authorised and trained in its correct use within the organisation’s control framework? (One chief technology officer has suggested not only considering the capabilities of the AI tool but also its limitations to be better aware of the risks of something going wrong or where its use may not be appropriate.) The accountant may not have the ability, or have access to an expert with that ability, to understand and explain the AI and its appropriate use.  If the AI has been appropriately tested and evaluated for the purpose intended. The controls relating to the source data and the AI’s design, implementation and use, including user access. So, how does the accountant apply their skills and expertise in this context?  It is expected that accountants will use many of the established skills for which the profession is known to assess the input and interpret the output of an AI tool, including interpersonal, communication and organisational skills, but also technical knowledge relevant to the activity they are performing, whether it is an accounting, tax, auditing, compliance, strategic or operational business decision that is being made.  Data and confidentiality According to the Code, when an accountant receives or acquires confidential information, their duty of confidentiality begins. AI requires data, usually lots of it, with which it is trained. It also requires decisions by individuals in relation to how the AI should work (programming), when it should be used, how its use should be controlled, etc.  The use of confidential information with AI presents several confidentiality challenges for accountants. The Code includes several considerations for accountants in this regard, including: Obtaining authorisation from the source (e.g. clients or customers) for the use of confidential information, whether anonymised or otherwise, for purposes other than those for which it was provided. This includes whether the information can be used for training AI tools.  Considering controls to safeguard confidentiality, including anonymising data, encryption and access controls, and security policies to protect against data leaks.  Ensuring controls are in place for the coding and updating of the AI used in the organisation. Outdated code, bugs and irregular updates to the software can pose a security risk. Reviewing the security certification of the AI tool and ensuring it is up to date can offer some comfort.  Many data breaches result from human error, e.g. inputting confidential information into an open-access web-based application is a confidentiality breach if that information is saved, stored and later used by that application. Staff need to be trained in the correct use and purpose of AI applications and the safeguarding of confidential information. Dealing with complexity The Code acknowledges that technology, including AI, can help manage complexity.  AI tools can be particularly useful for performing complex analysis or financial modelling to inform decision-making or alerting the accountant to any developments or changes that require a re-assessment of a situation. In doing so, vast amounts of data are collected and used by AI, and the ability to check and verify the integrity of the data introduces another level of complexity.  The Code makes frequent reference to “relevancy” in relation to the analysis of information, scenarios, variables, relationships, etc., and highlights the importance of ensuring that data is relevant to the problem or issue being addressed. IESBA was mindful, when revising the Code, that there are various conceivable ways AI tools can be designed and developed to use and interpret data.  For example, objectivity can be challenged when faced with the complexity of divergent views supported by data, making it difficult to come to a decision. AI can present additional complexity for accountants, but the considerations set out in the Code are useful reminders of the essential skills necessary to manage complexity. Changing how we work As well as its hugely beneficial applications in, for example, healthcare and science, AI is proving to be transformative as a source of business value.  With a range of significant new tools launched daily, from personal effectiveness to analysis and process optimisation, AI is changing how we work. These are powerful tools, but with power comes responsibility. For the professional accountant, certain skills will be brought to the fore, including adaptability, change and risk management, and leadership amidst rapidly evolving work practices and business models. Accountants are well placed to provide these skills and support the responsible and ethical use of AI.  Rather than fearing being replaced by AI, accountants can prepare to meet expectations to provide added value and be at the helm of using AI tools for finance, management, strategic decision-making and other opportunities. Michael Diviney is Executive Head of Thought Leadership at Chartered Accountants Ireland Níall Fitzgerald is Head of Ethics and Governance at Chartered Accountants Ireland

Imelda Hurley, CEO at Coillte, the semi-state forestry company, talks about her passion for sustainability and the importance of Ireland’s climate action and biodiversity agenda for the Irish economy and society  Imelda Hurley knew from an early age that she was destined for a career in business. Hurley tells Accountancy Ireland about her career path and how Coillte’s strategic vision will further support its contribution to Ireland’s climate targets, optimising the multiple benefits from forestry.  Tell us about yourself and the start of your career. I grew up on a family dairy farm just outside Clonakilty in West Cork. My first job was with Clonakilty Black Pudding, a little-known brand back then, but now a very successful and entrepreneurial operation. I completed a Business Studies degree at the University of Limerick. Following that I joined Arthur Andersen and became a Chartered Accountant. During that time, I had the opportunity to engage with multinationals and indigenous companies. That gave me a great lens into how organisations successfully operate, develop and implement strategy. How has your career evolved since you qualified as a Chartered Accountant? A: I always had an ambition to become a CFO and eventually a CEO. My career experience has been from farm to fork to forestry, working in the food, agribusiness and agriservices businesses across a variety of ownership structures.  During my role as CFO and Head of Corporate Sustainability at PCH International in China, I had the opportunity to learn more about sustainable product development and supply chain management.  That was over 10 years ago, when few organisations were talking about sustainability. I’m left reflecting on how times have changed over those 10 years and how there is an increased focus on sustainability today.  You were appointed as CEO of Coillte in November 2019. Tell us about your role and what attracted you to the position. I really enjoy the outdoors and nature. Coillte gave me a great opportunity to work in a business with a commercial focus, but also a business delivering social good. I joined Coillte in November 2019 and I spent much of the first two years navigating the pandemic. I wanted to ensure that Coillte emerged from the pandemic as a sustainable, viable and vibrant organisation. I am pleased to say that when we reported our 2021 results, we delivered record revenues, record profitability and a record dividend to the State.  Coillte manages 440,000 hectares of primarily forested land, circa seven percent of Ireland’s land, with about 6,000 individual properties. We have just over 800 employees and 1,200 contractors working across three divisions: Coillte Forest, Land Solutions and Medite Smartply.  Coillte is the nation’s largest forester and producer of certified wood, a natural, renewable and sustainable resource and the largest provider of outdoor recreation space in Ireland. It enables wind-energy on the estate, processes forestry by-products and undertakes nature rehabilitation projects of scale. When you were presented with your Businessperson of the Year Award in December, you were described as an “advocate for sustainable business practices and a leader in sustainability discussions”. Why is sustainability important to you? We are on a journey that requires us to leave the planet in a better place than we found it. There is a financial balance sheet but also an environmental and social balance sheet. Good business brings these together. From my perspective, I accepted the award on behalf of Team Coillte, all of whom work every day to balance and deliver the multiple benefits of forestry.  Tell us about the strategic vision you launched last year and Coillte’s plans for the next 12 months and beyond. In April 2022, we launched a new forest strategic vision focusing on four pillars – Forests for Climate, Wood, Nature and People. This vision sees us, as an example, enabling the creation of 100,000 hectares of new forests by 2050. Those forests will sink approximately 18 million tonnes of CO2.  We are also working on how we manage our existing forests to capture an additional 10 million tonnes of CO2 by 2050.  We have an ambition to redesign approximately 30,000 hectares of peatland forests through a programme of rewetting or rewilding for climate and ecological benefits and also aiming to enable the generation of one gigawatt of renewable wind energy by 2030.  From a people and recreational perspective, we are targeting to enable €100 million of investment to create world-class visitor destinations by 2030.  In July 2022, we launched Beyond The Trees, Avondale at Avondale Forest Park in County Wicklow and in June of this year, we opened the newly refurbished Avondale House, further adding to Avondale Forest Park experience, which has had over 300,000 visitors since June 2022. Our ongoing focus is to continue to ensure a strong, viable, vibrant Coillte that focuses on optimising our contribution to Ireland’s Climate Action plan, while continuing to deliver sustainably certified timber to support the decarbonisation of the built environment.  Our strategic vision also involves increasing from 20 percent of the estate being primarily managed for nature and biodiversity to 30 percent by 2025 and to 50 percent in the long-term. Another major focus for us is workforce capacity, planning for our organisation and the industry more broadly. We have 440,000 hectares under management and between now and 2050 the State has an ambition to increase forest cover from 11.6 percent to 18 percent. As such there will be a requirement to attract more people into our sector going forward. Are you glad you made the decision to qualify as a Chartered Accountant and what career advice would you offer your younger self? A: In the early years of my career, I looked up to others. Ultimately, I realised what was much more important was to follow my own path and enjoy the journey. You have to do what makes you happy and if you work hard and are determined, good things will come.  

Sustainability is often seen as the domain of large corporates but SMEs have the collective potential to be more powerful players. Sheila Killian explains why Social and environmental sustainability is often seen as more relevant to big multinational companies (MNCs) than to SMEs, small-to medium enterprises employing no more than 250 people. MNCs are more likely to have a sustainability strategy, and resources for its implementation, monitoring, reporting and communication.  They are more likely to report externally, integrating their reporting across sustainability and financial activities, and to be scored by ESG rating agencies.  This does not mean that MNCs carry all the responsibility or should reap all the benefits, however.  SMEs are enormously impactful in aggregate and have a huge amount to gain by getting involved. So, why and how should they engage? The potential impact of SMEs on sustainability SMEs have a massive collective impact. In Ireland, they account for seven jobs in 10. While large companies are commonly exporters, SMEs tend to serve their local region.  In terms of where people live, work, shop and spend their leisure time, smaller enterprises dominate. This amplifies both their responsibility, and the opportunities open to them. Because SMEs are embedded in their communities, they often make a huge contribution socially without realising it. This may lie less in strategy than in values.  David O’Mahony of O’Mahony’s Booksellers Ltd, a long-established independent bookshop in the south-west, sums up the position: “It’s only when you really think about it and put all the things together that you realise that there’s a lot more going on … [in corporate responsibility and sustainability] … than we would have probably realised ourselves.”  O’Mahony’s enjoys high social capital locally, gained through understated good work for the community and environment, derived from values and a sense of neighbourliness rather than from formal reporting.  Why SMEs do not report Despite this implicit moral accountability, many SME owners do not think about reporting externally on their sustainability. This is often because they don’t see the value to be gained. Compared with MNCs, there is much less separation between ownership and management/control in SMEs.  Therefore, the need for both internal and external reporting is reduced because the main shareholders are already intimate with what is going on in the business, and employees are closer to the leadership.  Unless the business is considering raising external finance, there is little need to consider how potential investors might perceive it, and if there is a perception that customers are not interested in sustainability activities, these will not be reported.  It seems to come naturally to SMEs to be community-oriented, however, often because they are family-owned, and such behaviour reflects the origins and values of the family.  Such firms tend not to have formal, written codes of conduct, but instead propagate the personal values of their owners, who do not consider that a separate, published set of values and reporting on their social and environmental activities is necessary for business. Why SMEs should report One reason for SMEs to begin some form of sustainability reporting is so that they can compete with MNCs locally to attract and retain talented employees.  The labour market is tight, remote working has shifted the power balance, and younger generations are more focused on sustainability.  Increasingly, SMEs are framing their sustainability credentials more clearly, and connecting them with their employer brand so that they can attract the talent they need.  There is also a consumer angle. The challenge posed by behemoth online retailers to small, local bricks-and-mortar businesses is now well-rehearsed.  A small, independent business, like a bookshop, needs to clarify and articulate its values and personal touch as a competitive advantage.  This ‘personality’ needs to be communicated externally if it is to reach the right customers effectively. Sustainability reporting can convey a sense of what the company is all about, its values and purpose – its ‘soul’. A third reason, particularly applicable to SMEs operating in the business-to-business sphere, is that reporting on strong sustainability metrics confers an advantage in entering the supply chains of larger firms.  If, for instance, an MNC is moving towards zero-carbon, it is likely to require smaller companies in its supply chain to be also on that journey.  A fourth reason to report is the internal value to be gained from paying attention to sustainability. Measuring, reporting and constructing a narrative around social and environmental values will improve the culture of the business, and pave the way to greater innovation.  Hotel Doolin in County Clare is an example of a small business that tells its sustainability story effectively. It has shortened its supply chain by buying local produce.  The hotel harvests rainwater, it has eliminated single-use plastics, and uses environmentally low-impact energy and heating. It became Ireland’s first carbon-neutral hotel in 2019, under the Green Hospitality Programme, ahead of many larger competitors.  The business also promotes social sustainability, employing refugees, supporting local community groups and actively seeks to be a good employer. This has enhanced its reputation not only locally but nationwide.  Partnering with not-for-profits Smaller companies that are ambitious in terms of sustainability targets will inevitably want to achieve things that are beyond their capacity.  If, for example, a business decides to work on the water quality in the area in which it operates, it may lack in-house expertise, jeopardising its credibility with the local community. One solution may be a partnership with a not-for-profit organisation (NFP). NFPs often have the expertise to tackle social and environmental issues but lack the resources, whereas companies may have resources (money) but lack the knowledge. A partnership can achieve sustainability goals if the match is right.  The NFP needs to be operating in the area in which the company wants to make progress, and the company needs to align with the NFP’s approach to society and the environment.  Mutual respect and consultation are key. At worst, a partnership can be seen as a ‘fig leaf’ for the SME and can undermine the legitimacy of the NFP. At best, it can be truly impactful for all involved. SMEs’ supply chain responsibilities  MNCs are famously held responsible for the working conditions in which their goods are produced by companies in their supply chains. Scandals, including the sweatshop labour exposed in the 1990s to the Rana Plaza garment factory collapse in Bangladesh in 2013, have forced companies such as Nike, Gap and Nestlé to change their practices.  Bad practices persist today, however, even where goods are produced close to home. In 2020, for example, it was revealed that online vendor BooHoo was selling clothes made in extremely poor working conditions in Leicester in the UK.  For a small, independent retailer, this means that, unless it takes steps to assure itself of the origin of the goods it sells, the risk remains that all or some element/s of those goods may have been produced in sweatshop conditions.  Smaller firms may lack resources to monitor conditions in their suppliers’ factories. Nor are they likely to have the requisite buying power to impose a code of conduct on their suppliers. So, what can they do about the conditions under which the goods they sell are produced? The International Labour Organization has clarified that a firm has responsibility as far up the supply chain as it has ‘reasonable influence’.  Large firms can leverage direct buying power to positively impact supplier. Starbucks works with its coffee producers to bring them up to higher social and environmental sustainability standards, for example.  A small trader is, however, limited to choosing suppliers wisely, and using their influence when feasible, perhaps working with other firms in the sector. The key differences between the supply chain responsibility of MNCs and SMEs, then, relate to power and influence. This principle also applies to other areas of sustainability. More power means more responsibility and the potential to make a positive impact.  SMEs need to address all the key issues of fair pricing, employee welfare, human rights and environmental impact within their own operations and – as far as possible – outside of them, bearing in mind their levels of resources and power.  The key questions here are: “Are we doing all we reasonably can to achieve sustainable practice?” and “Are we seeking to improve?”  Sometimes, acting in concert with other SMEs, can achieve more. The outcome may not be perfection, but honest efforts in the right direction will carry collective weight.  Sustainability and the SME advantage While corporate sustainability is often seen as the domain of MNCs, SMEs – because of their numbers and connection with, and impact on, society – are potentially more important players.  Many SMEs do not report their sustainability policies for several reasons, including informality, time and resource pressures, unfamiliarity with reporting standards and frameworks, or because a strong internal locus of value and ethical behaviour is already vested in their owners and leaders.  However, SMEs generally have high levels of engagement with their local communities and implement sustainability on an intuitive basis, drawing on leaders’ personal values. Reporting these efforts can bring significant advantages externally and internally.  Despite a lack of resources relative to larger companies, the key to building sustainable value for SMEs lies in making the best choices that are within their power at a given time. Sheila Killian is Associate Professor at Kemmy Business School, University of Limerick, and author of Doing Good Business: How to Build Sustainable Value

Remote work has given trainee accountants a lot of freedom. However, that freedom comes with some challenges that can be overcome with balance, says Jack Deignan It’s easy to list the obvious joys of remote work. The increased levels of flexibility in daily routines, the total elimination of the pains of the commute and the comfort to be found in working from your own home.  There’s also something to be said of the lack of pressure that working from home allows. There is no expectation to get out of your pyjamas, and you can take solace in knowing your favourite mug is just down the hall.  It can be much easier to get into the rhythm of the day if you just need to walk from your bed to your desk.  Work and study challenges However, working remotely is not without its challenges.  The lack of social cohesion in teams when everyone works from home can impact performance. It’s also difficult to foster a sense of comradery if every interaction is facilitated through a screen.  Learning on the job has also become more difficult in some cases. It’s almost always more beneficial to ask someone to explain something face-to-face.  The same goes for studying. When the pressure is on, it can feel isolating to be away from people who are going through the same kind of juggling act between work, study and life. A proper balance Working remotely has created an opportunity to reflect on what is gained and lost when given a chance to work from home.  We must balance our work and study while utilising the advantages of remote working. When working from home, you can get lost in a task and continue working more than what would be considered healthy for proper work-life balance. It’s important to remember to take breaks—go for a walk, get a coffee and don’t worry about going to the GP or running to the post office if needed. Similarly, studying can take over your life when you don’t have people around you that can keep you in check. Take the initiative to meet fellow trainees for a study session at the office or a local café.  Alternatively, set up a Teams or Zoom study call, so you don’t have to leave home but still have a study group. Having flexibility doesn't mean forgetting when the work and study day ends—it means you get some of that time back for yourself. Enjoy it. Jack Deignan is a Risk Assurance Associate at PwC  

The roadmap for the EU Commission’s milestone Corporate Sustainability Reporting Directive is taking shape and now is the time to start preparing for a brave new era in non-financial reporting, writes Conor Holland With the Corporate Sustainability Reporting Directive (CSRD) now approved by the European Council, entities in the EU must begin to invest significant time and resources in preparing for the advent of a new era in non-financial reporting, which places the public disclosure of environmental, social affairs and governance matters (ESG) matters on a par with financial information. Under the CSRD, entities will have to disclose much more sustainability-related information about their business models, strategy and supply chains than they have to date. They will also need to report ESG information in a standardised format that can be assured by an independent third party. For those charged with governance, the CSRD will bring further augmented requirements. Audit committees will need to oversee new reporting processes and monitor the effectiveness of systems and controls setup. They will also have enhanced responsibilities. Along with monitoring an entity’s ESG reporting process, and evaluating the integrity of the sustainability information reported by that entity, audit committees will need to: Monitor the effectiveness of the entity’s internal quality control and risk management systems and internal audit functions; Monitor the assurance of annual and consolidated sustainability reporting; Inform the entity’s administrative or supervisory body of the outcome of the assurance of sustainability reporting; and Review and monitor the independence of the assurance provider. The CSRD stipulates the requirement for limited assurance over the reported information. However, it also includes the option for assurance requirements to evolve to reasonable assurance at a later stage. The EU estimates that 49,000 companies across the EU will fall under the requirements of the new CSRD Directive, compared to the 11,600 companies that currently have reporting obligations. The EU has confirmed that the implementation of the CSRD will take place in three stages: 1 January 2024 for companies already subject to the non-financial reporting directive (reporting in 2025 for the financial year 2024); 1 January 2025 for large companies that are not presently subject to the non-financial reporting directive (reporting in 2026 for the financial year 2025); 1 January 2026 for listed SMEs, small and non-complex credit institutions, and captive insurance undertakings (reporting in 2027 for the financial year 2026). A large undertaking is defined as an entity that exceeds at least two of the following criteria: A net turnover of €40 million A balance sheet total of €20 million 250 employees on average over the financial year The final text of the CSRD has also set timelines for when the Commission should adopt further delegated acts on reporting standards, with 30 June 2023 set as the date by which the Commission should adopt delegated acts specifying the information that undertakings will be required to report. European Financial Reporting Advisory Group In tandem, the European Financial Reporting Advisory Group (EFRAG) is working on a first set of draft sustainability reporting standards (ESRS). These draft standards will be ready for consideration by the Commission once the Parliament and Council have agreed a legislative text. The current draft standards provide an outline as to the depth and breadth of what entities will be required to report. Significantly, the ESRS should be considered as analogous to accountancy standards—with detailed disclosure requirements (qualitative and quantitative), a conceptual framework and associated application guidance. Readers should take note—the ESRS are much more than a handful of metrics supplementary to the financial statements. They represent a step change in what corporate reporting entails, moving non-financial information toward an equilibrium with financial information. Moreover, the reporting boundaries would be based on financial statements but expanded significantly for the upstream and downstream value chain, meaning an entity would need to capture material sustainability matters that are connected to the entity by its direct or indirect business relationships, regardless of its level of control over them. While the standards and associated requirements are now largely finalised, in early November 2022, EFRAG published a revised iteration to the draft ESRS, introducing certain changes to the original draft standards. While the broad requirements and content remain largely the same, some notable changes include: Structure of the reporting areas has been aligned with TCFD (Task Force on Climate-Related Financial Disclosures) and ISSB (International Sustainability Standards Board) standards – specifically, the ESRS will be tailored around “governance”, “strategy”, “management of impacts, risks and opportunities”, and “metrics and targets”. Definition of financial materiality is now more closely aligned to ISSB standards. Impact materiality is more commensurate with the GRI (Global Reporting Initiative) definition of impact materiality. Time horizons are now just a recommendation; entities may deviate and would disclose their entity-specific time horizons used. Incorporation of one governance standard into the cross-cutting standard requirements on the reporting area of governance. Slight reduction in the number of data points required within the disclosure requirements. ESRS and international standards By adopting double materiality principles, the proposed ESRS consider a wider range of stakeholders than IFRS® Sustainability Disclosure Standards or the US Securities and Exchange Commission (SEC) published proposal. Instead, they aim to meet public policy objectives as well as meeting the needs of capital markets. It is the ISSB’s aim to create a global baseline for sustainability reporting standards that allows local standard setters to add additional requirements (building blocks), rather than face a coexistence of multiple separate frameworks. The CSRD requires EFRAG to take account of global standard-setting initiatives to the greatest extent possible. In this regard, EFRAG has published a comparison with the ISSB’s proposals and committed to joining an ISSB working group to drive global alignment. However, in the short term, entities and investors may potentially have to deal with three sets of sustainability reporting standards in setting up their reporting processes, controls, and governance. Key differences The proposed ESRS list detailed disclosure requirements for all ESG topics. The proposed IFRS Sustainability Disclosure Standards would also require disclosure in relation to all relevant ESG topics, but the ISSB has to date only prepared a detailed exposure draft on climate, asking preparers to consider general requirements and other sources of information to report on other sustainability topics. The SEC focused on climate in its recent proposal. The proposed ESRS are more prescriptive, and the number of disclosure requirements significantly exceeds those in the proposed IFRS Sustainability Disclosure Standards. Whereas the proposed IFRS Sustainability Disclosure Standards are intended to focus on the information needs of capital markets, ESRS also aim to address the policy objectives of the EU by addressing wider stakeholder needs. Given the significance of the directive—and the remaining time to get ready for it—entities should now start preparing for its implementation. It is important that entities develop plans to understand the full extent of the CSRD requirements, and the implications for their reporting infrastructure. As such, they should take some immediate steps to prepare, and consider: Performing a gap analysis—i.e. what the entity reports today, contrasted with what will be required under the CSRD. This is a useful exercise to inform entities on where resources should be directed, including how management identify sustainability-related information, and what KPIs they will be required to report on. Undertaking a ‘double materiality’ analysis to identify what topics would be considered material from an impact and financial perspective—as required under the CSRD. Get ‘assurance ready’—entities will need to be comfortable that processes and controls exist to support ESG information, and that the information can ultimately be assured. The Corporate Sustainability Reporting Directive represents a fundamental change in the nature of corporate reporting—the time to act is now and the first deadline is closing in.

Brendan O’Hora reports on the findings of the 2022 All-Member Survey Research is conducted to discover new information or reach a new understanding of something, so the Institute’s biennial membership survey is crucial. These have been two years of significant change, and as a membership organisation, it has never been more important for us to act on the findings in a comprehensive, targeted way for the benefit of 31,000 members globally.  The survey was conducted in May and June with over 1,800 members by independent research agency, Coyne Research. This level of participation helps us to build a very accurate picture of the member experience and is much appreciated. It allows us to make the most of this opportunity to check in with members, and to ascertain how we will respond and act on the findings.  This year, we also conducted qualitative research via eight focus groups. This exercise gave us a deeper understanding of member sentiment and reinforced that we are operating in very unusual times.  The operating environment The pandemic may be in retreat, but its effects persist. An ongoing adjustment to hybrid working, declining levels of resilience after extended periods of pressure, and changing priorities among younger members, many of whom qualified or spent their early years in a virtual environment, have had an impact. Compounding this are growing cost-of-living pressures.  The top challenge emerging from the survey for businesses was, unsurprisingly, the competition for talent, up significantly on 2020. Following this is inflationary pressure and increased labour costs. What is resonating with members  Looking at our membership as a whole, the qualification is very highly regarded and a source of great pride. The letters mean a lot to our members, and that pride also extends to the robustness and quality of the education provided.  In reviewing the findings, Bernie Coyne at Coyne Research noted that members are broadly positive about the way the Institute has responded over the last two years to the pandemic.  She said: “As in previous years, members were invited to rate a range of services, based on their experience and degree of satisfaction, with sentiment remaining consistent. Over seven in 10 members rated the webinars and online CPD options as good, with a 20 percent increase in those who experienced them since 2020. The range of specialist qualifications was also rated highly, as was Accountancy Ireland magazine, the weekly Tax News circular, and the knowledge hubs on the Institute’s website.”  The research also pointed to an increase in the number of members who have communicated with the Institute by phone and email since 2020. Roughly seven in 10 rate their experience in communicating positively. While there was strong uptake of the virtual alternatives on offer during the pandemic, there is confidence in returning to face-to-face events. Indeed, the research points to a desire, particularly among younger members, to engage and learn about how they can make their membership work for them and derive the greatest value from it.  Consistent with many of our peers globally, we have seen drops in key member metrics, such as satisfaction and relevance as well as likelihood to recommend the qualification. While, unsurprising, given these unusual times, it is an important alert for the Institute that is already prompting action.   How we are responding to the findings In a changed external environment, and armed with considerable insights, our challenge now is to reposition how we engage with members, with a particular focus on younger members at the start of their career, to optimise their experience of the profession. We are working closely with the Chartered Accountants Student Society of Ireland (CASSI) and the Young Professionals Committee in so doing.  Our members are some of the strongest advocates for the profession, and, at a time when there is a continuing shortage of qualified accountants, it is incumbent upon us to ensure the membership experience is a positive, rewarding, and relevant one for these most important advocates.  One of the ways we will be doing this in the coming weeks and months will be through a campaign to put the tools into members’ hands to make their membership work for them. It will feature real members speaking about how they’ve made the most of their membership and will be accompanied by an updated member section on the website to help users better access and understand what is available, from membership details to Continuing Professional Development, conferences, social events, and supports. Our focus is on giving more control of their experience to our members, so that this experience can be tailored and made to work for the individual.   In closing, I want to return to a theme I touched on at the outset—resilience in the face of sustained pressure. One-in-two respondents reported that COVID had a negative impact on their mental health, compared to 2020. Younger members were less likely to be aware of the Institute’s member support service CA Support, and we will be working to increase awareness of this important resource.  Brendan O'Hora is Director, Members, at Chartered Accountants Ireland

Jennifer Nickerson left a successful career in Dublin to co-found a whiskey distillery in rural Tipperary. She tells Accountancy Ireland about her inspiration, ambitions and lessons learned along the way When Jennifer Nickerson co-founded Tipperary Boutique Distillery in 2014, the Aberdeen-born Chartered Accountant had already risen through the ranks at KPMG in Dublin to become an associate director in the tax department just seven years after joining as a trainee. Tipperary Boutique Distillery is now exporting worldwide and employs seven people in south Tipperary with further plans for expansion. Here, Nickerson tells us about what inspired her move into entrepreneurship and her experiences establishing and growing a small business with global reach. Q: Tell us about your life and career prior to co-founding Tipperary Boutique Distillery—what prompted you to become a Chartered Accountant? I grew up in Scotland and my dad, Stuart, was a master distiller. He managed and worked as a consultant for some of Scotland’s best scotch producers, such as Glenfiddich, Balvenie and William Grant & Sons. You could say I grew up in the industry. I loved it, especially the passion the people working in it had. I went to college in Edinburgh for six years, studying Veterinary Medicine initially and then switching to Accountancy. I decided I didn’t want to work outside in the cold and wet.  I wanted to work in an office and I had this perception that a job in accountancy would be “nine-to-five”.  I was wrong about that, but after meeting my husband Liam and moving to Ireland to train, I found I really enjoyed the problem-solving aspect of the work. Numbers make sense. There is a “right answer” and that can be very satisfying.  I worked in the tax department at KPMG and did a lot of advisory work. The hours were long but there was great camaraderie and that makes for a really nice working environment. Q: So you had settled into this new career in Dublin and you were enjoying it. What prompted you to up sticks and move to rural Ireland to set up a whiskey distillery? I married a farmer—but I did tell him that I wouldn’t be moving to Tipperary unless there was work there that would interest me as much as what I was doing with KPMG in Dublin. We talked it through and my dad had already mentioned during a visit to Ballindoney, Liam’s family farm near Clonmel, that it would be the ideal setting for a whiskey distillery. We could grow grain, we had the land to build a distillery on, there was good quality water in Tipperary and good conditions for maturing whiskey as it’s a little bit warmer than Scotland. He really just mentioned it in passing, but it struck a chord. I’d had lots of experience putting together business plans and I was lucky that Liam had a steady job working for the county council. It was a calculated risk and we could afford to do it, so we went for it. Q: What was your vision for Tipperary Boutique Distillery starting out in 2014? Ultimately, we wanted to produce a world-class whiskey from grain to glass here on Ballindoney Farm.  We knew we had everything we needed, but we also knew it would take time, because distilleries are expensive and there is also the cost of laying down spirit for at least three years before it can be sold as whiskey. It wasn’t until 2020 that we finally had the funding raised, the facility built and the equipment installed to open our own distillery. We had started outsourcing Irish whiskey casks from other distilleries cut to bottling strength with water from our farm and released our very first expression way back in March, 2015.  After that, we started taking our own grain from the farm, having it malted and distilled by my dad at other facilities. Now, we are able to do everything apart from malting here in our own distillery. We grow our own grain, we mill, we mash, we ferment, we distill, we mature and we bottle here on the farm.  Q: Tell us about your markets? What countries do you sell to and where do you have the healthiest trade? We sell into Belgium, France, Canada, into several states in the US, and a little in Korea and Singapore. We were selling to Russia, but obviously not any more, and we were in discussions with distributors in Ukraine and Poland, but the impact of the war has scuppered both. Germany is our biggest market, Italy is great, and Belgium is a surprisingly steady little market as well.  In Ireland, we sell online ourselves at tipperarydistillery.ie and through Irishmalts.com, James J Fox, The Celtic Whiskey Shop, and through local retailers around the country. Q: What was it like moving from a successful career as a tax advisor in a Big 4 environment into the cut and thrust of entrepreneurship? Was it a good experience? It was massively humbling to be honest, but also incredibly rewarding. At the start, I did miss having colleagues to talk to and bounce ideas off. I really felt I was on my own and it took me a while to find my feet. My background in accountancy definitely helped a lot with the ‘form filing’—understanding bills and applying for licenses, things like that. At the same time, there were lots of things I didn’t know about, like where to get a barcode or source seals for bottles. It was a massive learning curve. Q: What are the most important lessons you have learned so far running your own business? I had no idea starting out how vitally important sales are. That sounds like a ridiculous statement, but it took a long time for me to shift my mindset away from numbers and deadlines to just getting out there and going after sales.  What I know now is that you can’t give up. It’s no good just sending out an email to a potential customer and waiting for them to come back to you. You have to keep trying and telling literally everyone you can how great your product is and why. That can be really hard because it’s very different to sitting in front of a computer as an accountant and working to a deadline. You have to be willing and able to stand up on a stage and say, “this is what we’re doing, we’re amazing and our product is the best”.  There is a theory that 80 percent of all sales in any business come from 20 percent of costumers. Based on my own experience, I’d have to agree with that. There’s really no point in chasing one-off sales. It’s far more important to focus on valued relationships than driving around trying to get a bottle into every bar in the country. On the other side of the coin, you have to chase your bills just as much. If you’re not getting paid, you’re in trouble. Q: How has the COVID-19 pandemic and the more recent war in Ukraine affected your business and how have you responded? As soon as the Pandemic hit, our orders from overseas plummeted. We had two pallets due to go to a distributor in a country that was very badly impacted by the pandemic and they ended up having to wait six months to take delivery. Irish people are brilliant though. They started buying more Irish whiskey during the pandemic and that really saved our business. Russia’s invasion of Ukraine had a massive impact as well, because it caused major supply chain issues for us and other producers. We had to change our glass suppliers, and we had really big delays with cork supplies, the capsules for the top of the bottle seals, cardboard for packaging deliveries—you name it, everything was disrupted. Most of our suppliers I tried to keep, because we have good relationships with them and that’s really important in business. We were also probably lucky that we are quite a small operation, so we have been able to adapt more quickly than bigger producers. Q: The Irish whiskey industry has grown enormously in recent years—do you think there is room for further growth and what are your own plans from here? When we started back in 2014, there were something like six craft distilleries in Ireland, but by the time our own distillery was up-and-running in 2020, the number had risen to around 40.  The market grew so much in that time. There is a lot more competition now and a lot more diversity in the sector, but there are also a lot more customers buying Irish whiskey in Ireland and overseas. I think there is still scope for some growth in the market. Forty distilleries sounds like a lot, but Scotland has around 100. What we are seeing is that, as the market matures, there is less focus on cost and greater focus on quality. Each producer has to know their niche and communicate it well to the marketplace. For Tipperary Boutique Distillery, our plan now is to continue to sell in Europe, and expand our presence in America and Asia. We want to continue to grow sustainably and one day—hopefully soon—open our own visitor centre at our distillery here on Ballindoney Farm.

Attracting, retaining and upskilling their people will be a top priority for Ireland’s chief financial officers in 2023. Colin Kerr reports As Irish businesses approach another year of uncertainty, Ireland’s chief financial officers (CFOs) are looking to workforce upskilling as a major “investment opportunity” in the 12 months ahead. The latest Deloitte CFO survey benchmarked the sentiment of 1,151 CFOs in 15 countries in Europe. Published in mid-November, the bi-annual survey sought the views of 75 senior finance executives in Irish business, in sectors ranging from construction, healthcare, and manufacturing, to retail, tourism and transport.  Seventy-two percent said upskilling was a major priority for them currently, while 96 percent identified attracting and retaining skilled talent as one of the biggest risks they would face in 2023. “This outweighs their assessment of other risks, such as the economic outlook for Ireland, the geopolitical outlook, supply chain logistics, and cyber risk,” said Danny Gaffney, Partner, Deloitte Ireland. “The survey also highlighted the point that a lot of CFOs are recognising the multiple benefits of upskilling at a macro level. As Irish businesses upskill their teams, it creates capacity within those teams and CFOs see the importance of that given the constrained talent market.” Businesses in Ireland are refocusing their workforce policies and planning talent attraction and retention, according to Deloitte’s findings. Eighty-five percent are looking at rolling out flexible working patterns, while 69 percent are reviewing their reward offering.  Sixty-eight percent, meanwhile, are investing in wellbeing and assistance programmes, and 59 percent are investing in sustainability initiatives, such as measures to reduce their carbon footprint. “Wellbeing and assistance programmes are actually getting leveraged to a greater degree. Going back to the hybrid discussion, the usual supports that are available onsite are not always available when you are working in a hybrid environment,” said Gaffney. “Having in place good wellbeing and assistance programmes is very useful to organisations in the hybrid environment where CFOs and their teams are not as well-connected as they would be onsite.” Gaffney advised that CFOs put a clear strategy in place when considering how best to upskill their team. “What we need are practical solutions where team members continue in their roles and can upskill around the working day, either in person or online,” he said. “At Deloitte, we are working with clients to help them meet this challenge, including an increasing focus on digital technologies. Personally, I would encourage CFOs to look at training as a better use of their internal capital than focusing on external resources, as a means to allow them to do some of the challenging things they are not doing at present.” The pursuit of digital finance strategies is one of the challenges facing CFOs. Upskilling existing employees can help to meet this challenge. “Getting upskilling right is essential. If you don’t get it right, it falls by the wayside and the business, the CFO and the internal teams all lose out as a result,” said Gaffney. “The biggest trap CFOs can fall into is making upskilling too complicated. The three pillars I would identify are: Show, Support, Assess. CFOs need to be sure the people on their teams are getting the specific training and development they need.” Communication is equally important, as is commitment, according to Gaffney. “It is a two-way street and both the CFO and their team need to be open, upfront and honest in advance of committing to training and upskilling,” he said.  “The business needs to understand the team motive and the individual team members, who are being upskilled, need to understand the business motive behind the process. Commitment is also key because—if we are talking about businesses trying to generate capability to create business value going forward—they need to be committed to ensuring the right conditions are in place for their teams to excel during and after the upskilling.” The growing trend towards hybrid working among businesses in Ireland offers its own potential opportunities. “Remote and online training is much more commonplace now than it was two or three years ago,” said Gaffney.  “With hybrid working, the big challenge a lot of businesses and organisations have faced, and continue to face, concerns connectivity. They can say, ‘we mandate you to be in the office on particular days each week,’ and that can lead to a reaction that may be very negative.  “On the other hand, there are workplaces that are more employee-led in terms of when people are required to come into the office. The challenge in this scenario is that these employees can feel disconnected from the organisation.  “Training is a brilliant way to make people feel connected. When training is made available to me through work, I feel that I am valued and more aligned to my role. This is because I can see that both my organisation and I understand what it takes for me to be successful.” The foremost challenge for many organisations is their CFO’s capacity to “absorb costs”, both new and existing, Gaffney said. “Rates of inflation will remain higher for a longer period of time, as the cost of debt rises and the appetite for risk declines, and organic growth is more of a focus for the CFOs over merger and acquisition (M&A) activity. “Reducing M&A activity may seem like something CFOs would look to do, but they should look at longer-term investments to mitigate current risks.”

Chartered Accountant Eamonn Hughes is playing a leading role in Bank of Ireland’s Responsible and Sustainable Business Strategy. Hughes tells Accountancy Ireland about the four-year plan and his goals as Chief Sustainability and Investor Relations Officer  Before joining Bank of Ireland Group in February as Chief Sustainability and Investor Relations Officer, Chartered Accountant Eamonn Hughes had a longstanding career as a sell-side market analyst with more than 25 years’ experience in capital markets and domestic banking.  Having worked most recently with Goodbody, the stockbroking firm, as Irish Banks and Insurance Sector Analyst and, before that, Head of Research, Hughes also had a clear view of the swift rise in environmental, social and governance (ESG) to the top of the financial agenda worldwide. “I could see that ESG was becoming hugely important in capital markets and the financial sector. The climate crisis, in particular, is a critical threat, but also a significant opportunity,” said Hughes. “For our planet, there is no Plan B, but the discussion about sustainability is not just about climate change. It is also about creating a more sustainable business model. Our vision at Bank of Ireland is to be the national champion in Ireland, to use our balance sheet and resources to drive positive change for a better, fairer society and improve the environment. “This gives me a very strong framework to think about my role, because, if we can deliver on our ESG strategy, we can ultimately deliver a more sustainable business model for all stakeholders and positive returns for investors. “The ESG agenda also involves regulators, so disclosure and risk management are very important—and there are reporting frameworks in place, but they are evolving very quickly. This is one of the challenges we face and is also why transparency and the availability of clear data is so important.  “With my background in capital markets, I can clearly see the mobilisation in capital, and I think the banking sector has a very obvious supporting role to play in society’s sustainability transition.” Investing in tomorrow Bank of Ireland published its Responsible and Sustainable Business Strategy in March 2021, a year before Hughes joined the group.  Bank of Ireland’s four-year Investing in Tomorrow strategy set out its own goals to support the green transition, alongside two additional pillars: enabling colleagues to thrive; and enhancing customers’ financial wellbeing. The Investing in Tomorrow green transition pillar included the setting of science-based targets aligning the bank’s lending portfolios with the Paris Agreement. The international treaty on climate change, adopted in 2015 at COP 21, set out a goal to limit global warming to 1.5 degrees Celsius, compared to pre-industrial levels. “Data is key across all three pillars, because reporting is essentially an output of what we are doing in support of climate change, colleagues, customers and the organisation as a whole,” said Hughes. “We need to focus on how we interact with our stakeholders internally and externally and, in my role, investors are obviously a key priority. As investors now have to produce more disclosures themselves, they will need to engage more with us in terms of what we are doing on our own ESG journey.” Clear reporting strategy How Bank of Ireland communicates with, and reports to, stakeholders on the progress of its ESG strategy is a priority for Hughes in his role as Chief Sustainability and Investor Relations Officer. “Ultimately, we need to explain how we are meeting the targets set out in our strategy, and it is incumbent upon us to develop the capacity and skill sets we need to support reporting and strategy delivery,” he said. “My role is to support in delivering across all three pillars, which involves a lot of data-gathering internally, particularly from a regulatory and reporting perspective.” Detailed progress reports on ESG will now be a core part of Bank of Ireland’s annual reporting cycle. “We need to be able to demonstrate clearly that we are creating a sustainable business strategy, enabling colleagues to thrive in the organisation and enhancing financial well-being among customers, in addition to supporting the sustainable transition,” said Hughes. “Transparency is hugely important. There are a lot of differentials in this space, so we need to standardise our reporting; to be able to explain clearly and cohesively what we are doing and why.” Commercialisation is becoming increasingly important as Bank of Ireland continues to implement Investing in Tomorrow, Hughes said. “Like many banks, we are in the commercialisation phase of our ESG strategy with the creation of sustainable finance solutions for, and increasing engagement with, customers. We are supporting and incentivising customers through competitive rates to buy or build an energy efficient home or to retrofit their home or business to make it more energy efficient.” Sustainable finance fund Bank of Ireland recently announced a €3 billion increase in its Sustainable Finance Fund, which will bring it to €5 billion by 2024. The fund covers green propositions, including mortgages, home improvement loans and business  loans.  Bank of Ireland’s inaugural standalone Responsible and Sustainable Business Report, published in June, tracked the progress of its ESG strategy in 2021. More than €1.8 billion in mortgages, home improvement loans and business loans had been drawn down from the Sustainable Finance Fund by the end of the year, the report stated. Thirty-five percent of all mortgages provided by the bank in 2021 were green, rising to 48 percent in the first half of 2022.  Bank of Ireland was also the largest provider of wholesale finance for electric vehicles in 2021, providing finance to 13 of the 15 car manufacturer franchises. The publication of the Responsible and Sustainable Business Report marked a significant “step-change in the tracking and transparency” of the bank’s ESG reporting, Hughes noted.  “Our stakeholders—including customers, shareholders, and regulators—are demanding far greater transparency as to how we are meeting our ESG commitments,” he said. “This report provides insight into our strategic approach, appraisal of our progress to achieve our purpose, and information on the key focus areas we plan to progress in the years ahead. Being clear on ESG, and showing how you are delivering what you sign up to, is now a commercial imperative for all lenders, including Bank of Ireland.” Science-based targets Bank of Ireland has also committed to setting science-based targets across portfolios and operations to align lending practice with the low carbon ambitions set out in the Paris Agreement. “We completed two successful green bond issuances in 2021, raising €1.25 billion with the capital used to finance green buildings, renewable energy projects and clean transportation,” said Hughes. “Thirty-five per cent of the mortgages we provided in 2021 were green and we have also launched a green mortgage product in the UK.” Bank of Ireland is providing finance for the development of at least 750 megawatts of renewable wind capacity across the island of Ireland. The bank is also in the process of decarbonising its own operations—reducing absolute emissions by 88 percent between 2011 and 2021. Social and governance Although supporting the green agenda is a major part of Investing in Tomorrow, the strategy also sets goals for investing in colleagues and enhancing customers’ financial wellbeing. “We recognise the supporting role we can play in Ireland’s response to the climate crisis, but the ‘S’ and ‘G’ are equally important when we consider ESG,” Hughes said. “We have a strategy to improve the financial wellbeing of our customers and to foster a financially inclusive society.” Bank of Ireland was, Hughes said, supporting customers to become more financially confident, while also working to simplify processes, so that the “financially marginalised have easier access to banking services.” Financial health and inclusion  Bank of Ireland is one of 28 banks around the world that have signed the Commitment to Financial Health and Inclusion published in December 2021 under the United Nations Principles for Responsible Banking (PRB). A first-of-its-kind initiative aimed at promoting universal financial inclusion and health in the banking sector, its launch closely followed the publication of the UN’s PRB Collective Progress Report. The report identified financial inclusion as the third most pressing sustainability challenge facing signatory banks, behind climate mitigation and adaptation. “This UN initiative is particularly important in an environment in which we have a cost-of-living crisis and customers are facing major challenges in the medium- to long-term. The question for us is, ‘how can we deliver this particular skill set and support our customers at a time when they really need it?’” said Hughes. Bank of Ireland is also helping customers to “live more sustainably” with the recent announcement of the roll out of bio-sourced debit and credit cards. Launched in October, the initiative will over time replace all plastic debit and credit cards issued by the bank, to help support the reduction of single-use plastic. “If we are to live in a more sustainable way, we need to do things differently, including through our everyday banking. The introduction of bio-sourced cards is a very practical way we can help our customers to reduce their environmental footprint,” Hughes said. “As a bank, we are working very closely with our customers on the sustainability transition. As they deliver, we deliver. It is a symbiotic relationship and an exciting place to be.”  

Martin Moloney, Secretary General of the International Organisation of Securities Commissions, outlines his priorities for the year ahead Irishman Martin Moloney is Secretary General of the International Organisation of Securities Commissions (IOSCO). Headquartered in Madrid, Spain, the international body brings together the world’s securities regulators and is recognised as the standard setter for the securities sector worldwide. IOSCO develops, implements, and promotes adherence to internationally recognised standards for securities regulation, working closely with the G20 and the Financial Stability Board (FSB) on global regulatory reform. Accountancy Ireland sat down with Moloney to discuss his goals, priorities, and concerns for the year ahead. Q: What are the biggest risks facing investors around the world right now and how is IOSCO working with securities regulatory agencies to address these risks? The risks that investors face never really change. There are some fundamentals. You can hire the wrong advisers, you can pay them too much, you can choose the wrong times to get in or out of markets, and you can invest in the wrong things. These risks are the core risks for investors, and they have been for as long as financial markets have existed. The difficulty is that financial markets are constantly changing. New asset classes like crypto are emerging, and there are new ways in which intermediaries work on your behalf, but also earn fees for themselves. This creates new risks for investors. Also, as we saw from recent events in the UK, markets can go into sudden periods of stress and crash. We do our best, working with others, to try to make markets as resilient as they can be, to ensure that these episodes are few and far between insofar as we can. These are the big issues facing us currently. Really, it all comes down to integrity—being able to trust the price you see when you invest in the markets and ensuring that you are not being fooled by people who are trying to cheat you out of your money. Q: You have described the rise of cryptocurrency as an area fraught with risk, requiring “a lot of work” on the part of regulators. Can you tell us more? There is no doubt in my mind that we have reached a turning point in relation to crypto. This is not because of the so-called ‘Crypto Winter’. The value of crypto might go up or down, but that is not really the issue. The point that we all have to observe and recognise is that crypto has survived and has continued to survive over a number of years. It is reasonable to assume that it is not going away and, therefore, it has to be regulated. I am delighted to say that, since I have joined IOSCO, the organisation has moved forward with its policy in this area and is now very quickly developing a set of guidelines for the market on how different jurisdictions should regulate crypto and the common standards they should aim to achieve in doing so. We are seeing a number of regions, notably the United States and Europe, now moving towards developing legal frameworks. I have no doubt that this is far from the end of the matter, however—it is just the beginning. Crypto is going to evolve and change as people get on top of the technology and new opportunities emerge. The most important thing we must all keep an eye on here is the outcome for the investor. In the first years of crypto, a huge number of people lost money through fraud. Other people, who may not even have been aware of it, lost money through market manipulation, insider trading and various other dubious activities we know well. Very often, this has been driven by conflicts of interest. If you dig down into the principles articulated by IOSCO for financial markets many years ago, you will find us warning against many of the phenomena we are now seeing in crypto markets. Theft does not change. It might happen in a different location, but theft is still theft. Bad management is still bad management, no matter where it happens. It is up to us to re-articulate these very simple, but really important, ideas and explain how they can apply in the crypto space. It is also important for the crypto sector itself to come up with good solutions and technologically enabled solutions, so that its work can be supervised and that it can reach the same standard of regulation as the rest of the financial sector. There are a number of individuals, I think, within the crypto sector who have come to understand that they need to move positively towards a strong regulatory framework in order to bottom out their businesses and remain stable. If we do not start to see self-regulation within the crypto sector, then I think we will see more jurisdictions banning crypto. It is just not sustainable over the medium term to try to avoid the regulatory frameworks that apply to everyone else. It is one thing to see yourself as a different asset class. It’s quite another to see yourself as an entirely different industry when you are effectively doing the same thing. Q: So, you do believe that cryptocurrency has a long-term future provided that there is robust regulation in place across the board? I think there is some potential for this asset class, but it is going to become more challenging. I don’t have a crystal ball, so I try not to predict the future. I see some very interesting new products developing in the decentralised finance space, and I wonder if this is ultimately where crypto is going to go. We are all used to a simple model in which you get quite non-functional assets like Bitcoin being traded and people making money primarily out of the bubbles in Bitcoin. The use cases for crypto continue to be worked on extensively, however. So, every time you have one of those bubbles, what is actually happening is that money is being raised to allow people to invest in new potential use cases. There are now so many use cases that have come and gone, and failed ideas that have been touted and promoted, you could be forgiven for thinking that there are no use cases left for crypto—but that is probably wrong. I think people will continue trying to figure out good use cases for crypto. I don’t think it’s going away any time soon. Q: You have spoken recently about the greenwashing risk facing securities regulators—what can be done to address this? We put out a couple of reports in 2021 where we looked at the greenwashing issue in great detail, listing the different ways in which this phenomenon occurs. We had to acknowledge, however, that it is not just about ‘evil intent’. Activity that might be described as greenwashing often happens, because the market structures needed to adequately support sustainable finance are not yet in place. Sometimes, you do get people who are frankly trying to fool investors by issuing misleading information, but, equally, the markets as they stand are just not built for sustainable financing. Having identified the problem and having asked the industry to work as hard as possible to reduce the amount of greenwashing that now exists, we have had to acknowledge that the system itself needs to change. Regulators have to do it, governments have to do it, standard-setters have to do it—to create a better system to achieve true sustainable finance. If, for example, I am proposing an investment that has a strong impact in terms of reducing carbon emissions, I should get a better price on the market and a better investment price for that security than someone who comes to market with a security for a carbon-emitting project. We want the market to be sensitive to the environmental impact of different proposals, companies and products. They must have access to information that is reliable; that has been independently audited; and that brokers can bring together to compare stocks from different parts of the world and determine differential pricing based on their impact on the environment. Getting all of this right would be an incredibly hard job, so we have broken the job down into a number of elements. We will be progressively working on putting these building blocks in place over the next couple of years, in order to make sure that the process can be regulated and that people who don’t do the right thing can be held to account on the basis that they could have done the right thing and chose not to. Q: As the move to establish standards for environmental, social and governance (ESG) reporting gathers pace, what is your take on the current efforts underway? We have a very close relationship with the International Sustainability Standards Board (ISSB). We effectively oversee its work and, if we like what it is doing, we will endorse its standards, and recommend those standards to individual regulatory securities agencies around the world, so that these jurisdictions can adopt the standards as they see fit. The fundamental issue we are all facing is that a sustainable financial marketplace has to be a global marketplace. If you have fragmentation and you don’t have the same information sets available in different parts of the world, you cannot have a true comparison between different securities, and capital cannot flow to the best projects. It is no good for anyone if Europe is pristine, while the rest of the world is working in a different way. What happens in the Amazonian rainforest matters to all of us. Capital, therefore, has to flow from those places where it is abundant, such as Europe and North America, to locations in which the opportunities exist to do the right thing. What IOSCO has said to the countries we work with around the world is, “do this any way you want, but use the ISSB standards as a baseline and build your own approach on that foundation”. Put simply, you can do all you want in the ESG space, but unless we have a common core, we cannot create a global financial market that will bring about any real change. Q: Can you tell us about the work you are doing with the Financial Stability Board in relation to investment funds? This is a very big project for us. Investment funds are a crucial mechanism all around the world for people to get access to markets on a collective basis, but they can have a concerning impact on markets in periods of crisis. We have been doing work in this area since 2016. We have done a lot already, but there is more to do. A major focus for us next year will be trying to make sure that the kind of funds both ordinary individual investors and the more risk-averse institutional investors choose are safe in a crisis. We are trying to ensure that, if you are investing in a product that is riskier, it will be clear to you that it is more difficult to get your money out of it; that these kinds of investment funds are not the equivalent of a bank account. This is a typical example of what we do, but there are lots of others. We do a lot of work on cyber-resilience, and we are also very interested in the change in the behaviour of retail investors and their vulnerability to scams. One of the problems we face at the moment is that, while technology has made it easy or cheap for people to invest in the markets, it has also made it easy or cheap for fraudsters to get at many thousands of people. We need to figure out better and better ways to stop these fraudsters and prevent them in their designs. About Martin Moloney Prior to joining IOSCO as Secretary General in September 2021, Martin Moloney was Director General of the Jersey Financial Services Commission and, before that, he worked as a Special Adviser on Risk and Regulation to the Central Bank of Ireland, where he served for 16 years, previously heading up the Markets Policy, Markets Supervision, and Legal and Finance Divisions. Moloney began his early career working in industry with Barclays Bank and Bank of Ireland in London, before returning to Ireland to work with the Department of Justice, Department of Finance, the Irish Competition Authority. Born in Dublin, he has a master’s degrees in Business Law and Economic Policy, both from Trinity College Dublin.

Elaine Coughlan, one of Ireland’s most successful venture capital investors, tells us how her experience in accountancy and audit led to a high-flying career in technology Since qualifying as a Chartered Accountant and cutting her teeth in audit in the 1990s, just as the first wave of tech entrepreneurs in Ireland were beginning to access US capital markets, Elaine Coughlan has carved out an illustrious career in venture capital. Dublin-born Coughlan is the co-founder and joint Managing Partner of Atlantic Bridge, the global growth technology fund with more than €1 billion in assets under management across nine funds. For Coughlan, her career is a testament to both her training in finance and the power of human connection in business the world over. “Atlantic Bridge has over 35 companies we have successfully sold or ‘IPOed’ and I am immensely proud of that,” she says. “The wins drive you on because you can see what’s possible and those Irish entrepreneurs become role models for the next generation. I’m proud of the assets we have under management, and that Atlantic Bridge now has people in Dublin, London, Paris, Munich and Palo Alto in Silicon Valley. That is a truly global footprint, and it really helps us to scale our companies.” Early connections Coughlan credits the professional connections she made at an early stage in her career at Ernst & Young with setting her on the path to professional success. “Some of the people I met back in the nineties, our clients at the time, were hugely influential on me,” she says. Among those clients was Smurfit (now Smurfit Kappa), already a long-established industry leader in paper packaging production. “I was seconded from Ernst & Young to work with Smurfit when it was probably the number one Irish company in terms of market capitalisation and really blazing a trail in Irish business,” she says. “It is still a phenomenal company today, but for me at that time, Smurfit was just so ambitious and far-reaching in its approach to mergers and acquisitions, and the capital markets. I worked on fundraising and acquisitions with them and had early exposure to some of their senior executives—people like Gerry Fagan, their then-CFO.” Coughlan forged other crucial connections at the time with Bill McCabe, founder of CBT, the e-learning group, and Iona Technologies’ Chris Horn. “Bill and Chris were the first entrepreneurs in Ireland to float tech companies on the Nasdaq and, if you look at what they had in common with Smurfit, it was really that they were all entrepreneurial,” she says now. Coughlan would leave Ernst & Young to join Iona ahead of the company’s Initial Public Offering. “I knew then that practice probably wasn’t for me. That’s not to say that you can’t be entrepreneurial in practice, but the cut and thrust of the tech business pulled me in,” she says. “I remember traveling over to the US with CBT back in 1993 and that was it for me. There was such a sense of possibility.” Coughlan went on to join Parthus, the semiconductor IP company co-founded by Brian Long, and the pair formed an abiding partnership, co-founding both Atlantic Bridge and GloNav, the GPS company acquired in 2007 for $110 million. “All these years later, I am still in business with the same people, and they were the people that had an impact on me starting out. They were the people I learned from and the people who were generous with their time and their knowledge, and willing to give me experience and opportunities,” she says. For young Chartered Accountants starting out in their career, Coughlan has this advice: “Above all else, nurture your connections. These young professionals will already be well-qualified and proven in their ability and resilience, because training to become a Chartered Accountant is challenging in itself,” she says. “The question they have to ask themselves is ‘what differentiates me beyond that?’ It comes down to being able to combine your knowledge with strong relationships in ways that bring about better outcomes.” As Coughlan sees it, building solid sustainable relationships in business isn’t simply a case of networking and ‘transactional interactions’. “It’s about finding people who share your values and ethics, whose accomplishments and abilities you admire, and who have the ability to lead and inspire. You always have to be thinking long-term, not just about your next connection on LinkedIn,” she says. Supporting start-ups Coughlan’s commitment to supporting start-ups and advancing Ireland as a leading hub for technology development was recognised at this year’s Irish Accountancy Awards, at which she won the prize for outstanding contribution to the profession. “When we started Atlantic Bridge in 2004, we wanted to help tech companies in Ireland to scale successfully. Ireland is a small island and a small economy, so there are two things tech companies here need to scale—they need to move beyond the island to reach customers and they need access to capital,” she says. “We wanted to cross the Atlantic to the US, because it is the largest market in the world in terms of customers and capital markets. At the time, Ireland had a VC market of less than €100 million. It’s 10 times that size now, but back then, it was really small.” The primary focus for Atlantic Bridge today continues to be “deep tech” innovators in the business-to-business (B2B) space. “We’re not after instant gratification or overnight success. These are businesses with defensible research-intensive technologies that are primed to scale when the time is right,” says Coughlan. “Our investors are patient. They are looking for strong long-term returns, and we are very proud to have reached the stage where we have raised nine funds, because that is not an easy thing to do in this industry.” Coughlan warns, however, that we are entering a “new investment cycle”, in which surging inflation, rising interest rates, and the risk of recession, are all making investors more risk averse. “The outlook for Atlantic Bridge in the short-term will be cautious and tactical, but beyond that, we are optimistic and deeply committed to the technology trends we are seeing today that will make a difference in the future,” she says. “A lot of the technologies we’re investing in now are in climate change action—low-power, low-carbon enablers—and in medical technology and the digitisation of health, where we can meet unmet needs. We’re focusing on technologies like Artificial Intelligence and semiconductors—the fundamental building blocks that will be built into new products over the next three to five years.” Research and development As the economy enters uncertain terrain, Coughlan is urging the Government to continue investing in research and development (R&D). “Ireland has to continue to invest in R&D. We need to hold our nerve in continuing to invest in the best and brightest people and start-ups, because they will drive the next generation of growth,” she says. “Today, we are investing about 1.25 percent of GDP in R&D. We need to get that up to between 2.5 percent and three percent. The future economy will be knowledge-intensive and that requires knowledge-intensive people.” Coughlan is equally committed to the advancement of her profession, and proud of her own achievements as a Chartered Accountant. “The ‘bean counter’ perception is one too many people have of accountants, but I would probably be the last person you’d ask to do a P&L statement,” she says. “I can tell you if it is right or wrong though, because I understand the numbers and what they mean. I can interrogate and interpret any set of numbers and that is because I am a Chartered Accountant. All business now is run on data and our profession gives us a really strong grounding in using data to make decisions—and that is the future. “There are doors that are opened to you when you train as an accountant. You learn about process, structure, deadlines, and relationships. All of these skills are incredibly important. “You come out of it battle-hardened and resilient, and with all these options: to stay in practice; to focus on technical work; to go into consultancy; financial services; or business and entrepreneurship. The opportunities are phenomenal.” Growing up in Beaumont in north Dublin in the recession-hit 1980s, however, Coughlan had envisaged a different career for herself. It was a chance encounter that set her on the path to accountancy and a high-flying career in venture capital. Early career path “I was good at numbers at school and I studied accountancy for the Leaving Cert, but I wouldn’t say I was destined to be an accountant. I fully recognise now that it was my accountancy and audit experience that led me into the technology industry, but my real interest growing up was people,” she says. “I wanted to work in a people-focused environment, so I applied to study marketing and languages at DCU and went for a summer job at a small accountancy firm to keep me going in the meantime.” Coughlan didn’t get the summer job, but she was contacted by her interviewer and urged instead to consider accountancy as a full-time career. “It was 1989, unemployment in Ireland was something like 15 percent and so many people were emigrating to find work in the UK and the US,” she says. “I didn’t know anything about becoming a Chartered Accountant, but I wrote to the Institute and was offered a training contract with Ernst & Young. Here was this opportunity to have my fees paid and earn a wage with guaranteed work in a really tough economy. It was a great deal. That’s why I always say to this day, ‘what’s meant for you won’t pass you by’.”

Technology is shaping the future of financial services and creating exciting opportunities for innovative professionals at the heart of the fintech revolution As Chief Executive of Swoop Funding, Andrea Reynolds occupies a unique position at the nexus of fast-changing trends in financial services, emerging technologies, and the evolving role of the financial professional. The Chartered Accountant established Swoop in 2017 with Ciarán Burke, the company’s co-founder, to develop software that could help accountants identify the best funding options for SMEs. “The platform has been used now by 75,000 businesses to access funding, ranging from equity and grants to loans and tax credits. That’s given us an interesting overview of how much technology is changing the world of finance,” said Reynolds. Headquartered in Dublin, Swoop was founded in the UK where Reynolds had been working as a management consultant with KPMG in London before deciding to go into business with Burke. “At the time, everyone was moving to cloud accounting and open banking was coming down the line with the EU’s Revised Payment Services Directive (PSD2). We were seeing these new fintech lenders emerging, offering alternative funding to businesses and consumers,” she said. “In accountancy, you are trained to solve a problem by breaking it down into smaller elements, and that’s basically what I did with Swoop. I built a platform that could bring all of these funding options together in one place and do the heavy lifting for accountants advising SMEs.” Five years on, Swoop is on course for expansion in North America and other markets, having recently raised €6.3 million in Series A funding. “Finance is increasingly data-driven and borderless and that creates opportunities for fintechs like us, but different markets also have different strengths and weaknesses,” said Reynolds, pointing to her experience launching her own start-up in Ireland and the UK. “The idea for Swoop originally came from my experience navigating the funding system for SMEs in the UK, which is a lot more fragmented than the Irish system,” she said.  “The flipside is that the UK has been much more open to alternative finance, as have other European countries. That’s meant a lot more activity in non-bank lending, whether that’s crowdfunding, or loan finance from the likes of Wayflyer, Clearco or Youlend.” By comparison, Ireland is in ‘catch-up mode’, but it is catching up fast, said Reynolds. “Wayflyer is a huge fintech success story and there are other alternative lenders in the Irish market, like Linked Finance, Flender, and Accelerated Payments.  “Ireland already has a very strong fintech base in regulatory technology, anti-money laundering, ID verification, and Know Your Customer (KYC) technology. Where we still have to build up momentum is in the area of open banking.”  Automating auditing For David Heath, FCA, it was his early experience training as an auditor that sparked the idea for Circit, the fintech venture he co-founded in Dublin in 2015. “I trained with Grant Thornton, and it was a really great experience because the firm was so ambitious and the clients so varied, but as an entrepreneur, your starting point is always ‘what is the problem and how can we solve it?’  “For me, it was a case of thinking back to those early years in my career and digging into the processes that were the most challenging,” said Heath. “Auditors typically have a good relationship with their clients but getting the information they need from third party evidence providers is a big pain point.  “You have to verify the information your client gives you with an independent source—usually a bank, law firm or broker—and that process can take anywhere from three to six weeks.” Heath saw an opportunity to solve this problem with the advent of PSD2, using the EU’s open banking regulation to create a digital verification platform for auditors.  A cloud-based open banking platform, Circit connects auditors to their clients’ banks, solicitors, and brokers, allowing them to verify information within seconds.  Circit is approved by the Central Bank of Ireland as an Account Information Service Provider (AISP) under PSD2. It works with more than 300 accounting firms in Ireland and overseas and recently closed a €6.5 million funding round. “The funding will help us to increase our footprint and build out our open banking and regulated products, leveraging the license we have from the Central Bank of Ireland,” said Heath. “The problem we’re addressing may be niche, but it has global application.” Global ambition This global ambition is a common trait among Ireland’s most promising fintechs, according to Matt Ryan, a director in the Financial Services Consulting Group at Deloitte Ireland. “The ones to watch—the ones that do well quickly—tend to be thinking globally from day one. They have the talent and the funding, but they also know that Ireland is a very small market, so they are thinking in cross-border terms from the get-go,” said Ryan. Ryan points to Transfermate and Wayflyer as two such Irish fintech ventures whose global vision is paying dividends. A business payments infrastructure company founded in 2010, Transfermate closed a $70 million funding round in May, valuing the Kilkenny fintech at $1 billion. Wayflyer secured $300 million in debt financing in the same month following a $150 million Series B funding round, closed in February, which earned the Dublin start-up a $1.6 billion valuation and coveted ‘unicorn’ status. The pandemic effect The speed with which Wayflyer’s revenue-based financing and e-commerce platform succeeded globally reflects a wider trend in fintech. “The pandemic really accelerated the development of the sector as businesses and consumers suddenly moved online en masse,” said Ryan.  “Fintech was already a fast-growing market, but COVID-19 has made digital and contactless payments the norm and that has catapulted financial technology into a new era of growth.” While fintech awareness among consumers tends to centre on high-profile digital banks like Revolut and N26, the fintech sector globally, and in Ireland, is far more diverse.  “People usually think of full stack providers like Stripe and Revolut when they think of fintech, but that’s really not the whole story,” said Ryan. “Equally relevant are the technology companies selling services and solutions to financial institutions. “There are some very successful Irish companies in this space, such as TansferMate and Fenergo, which specialises in KYC technology for banks.” Fintech in Northern Ireland The established financial services sector is equally important to the fintech ecosystem in Northern Ireland, according to Alex Lee, Executive Chair of Fintech Northern Ireland (Invest NI). Figures published last year by Fintech NI found that there were 74 fintech companies in the region and 7,000 people employed in fintech jobs. “The financial services sector here has a good track record of attracting foreign direct investment (FDI), particularly over the last 15 to 20 years,” said Lee. “Large institutions like Citi, Allstate, CME, TP ICAP and Liberty Mutual have all established a meaningful presence here.” Together, these US multinationals form ‘the foundation’ on which Northern Ireland’s fintech sector has continued to build, Lee said.  “Attracting big international players has helped to grow out our fintech expertise and talent pool, because most of these companies have global technology development centres running out of Northern Ireland, and that has contributed to the rise of some really successful homegrown fintechs,” he said. FinTrU is one such success story. Founded in 2013, FinTrU develops regulatory technology for investment banks, ranging from legal, risk and compliance, to Know Your Customer (KYC). The Belfast-headquartered company employs 1,000 people and, in July, announced plans to create a further 300 jobs at a European Delivery Centre in Letterkenny, Co. Donegal. Another scaling success story in Northern Ireland is FD Technologies (formerly First Derivatives).  Founded in 1996, the Newry-headquartered data firm employs 3,000 people at 13 offices in Ireland and globally and recently announced plans to create 500 jobs at a new technology hub in Dublin. Northern Ireland is also continuing to attract FDI. In June, the Bank of London announced plans to establish a Centre of Excellence in Belfast, creating 230 jobs by 2026.  “We are making strides now and my hope is for a homegrown fintech ‘unicorn’ to come out of Northern Ireland. We’re not quite there yet, but I would like to see this ‘poster child’ for the sector emerge soon,” said Lee. Decline of the unicorn Such is the pace of growth in the fintech sector globally, however, that even the much sought-after ‘unicorn’ moniker is losing its lustre.  “In developed markets at least, I think there is a view that ‘unicorn’ status has lost some of its cachet,” said Ian Nelson, FCA, Head of Financial Services and Regulatory at KPMG Ireland, and a member of the board of the Fintech and Payments Association of Ireland. Even Stripe—perhaps the best-known ‘unicorn’ with Irish origins—has outgrown the label.  Established in Silicon Valley in 2010 by Limerick brothers Patrick and John Collison, the online payments giant’s $95 billion market capitalisation has soared beyond the $1 billion unicorn requisite. “Stripe is really now a ‘centicorn’, if you like, and there are numerous other fintechs in the same sphere, and ‘decacorns’ valued at $10 billion coming up behind them,” said Nelson. “At $1 billion, becoming a ‘unicorn’ has less meaning for fintech start-ups in developed markets, but it will continue to be an important building block for start-ups in emerging markets and less mature fintech hubs.” Among the other trends Nelson is keeping an eye on is the role technology will play in supporting environmental, social, and governance (ESG) capabilities in business. “Since COP26, we have seen a lot of attention directed towards fintechs with ESG capabilities,” he said.  “This really reflects the growing prioritisation of ESG in financial reporting and financial services generally. ESG is going to be a really important play in fintech. “We can expect to see more fintech companies focused on climate change, decarbonisation and the circular economy, and more jurisdictions setting up incubators specifically focused on ESG solutions.” Digital innovation in financial services Already a leader in payments globally, Ireland is now shaping the business environment for digital finance, writes Seán Fleming TD, Minister of State at the Department of Finance As Minister of State with responsibility for financial services, I lead the whole-of-government strategy for developing international financial services in Ireland, titled Ireland for Finance. I very much welcome this timely report on fintech.  In recent years, new entrants and long-standing financial institutions have looked to capture the opportunities presented by digital technologies.  Ireland is well-placed to benefit from the application of new technologies in the financial services industry. We have both a well-developed financial centre and a renowned technology sector.  This makes Ireland a centre of excellence for start-ups and big-name companies that want to establish operations in the European Union.  Ireland has shown leadership in shaping the business environment for digital finance. Important to this is Ireland’s education system, which has produced some of the finest innovators in the world. These graduates are leading the development of cutting-edge technologies.  The Government has an ambitious agenda for education. Two out of 15 Cabinet Ministers are dedicated to education and skills. Consecutive Governments have invested substantially in education, making it a cornerstone of Ireland’s economic strategy.   This economic strategy has created a strong mix of multinationals that have chosen Ireland as a place to do business. We have been very successful in supporting high-potential start-ups, with over 200 Irish fintech firms at various stages of development. Ireland is a leader in payments, and a number of firms have substantial development operations here. The digital finance ecosystem has expanded in recent years to include institutional financial services providers that have chosen Ireland to help them develop their fintech capability. The importance of fintech is reflected in the Ireland for Finance strategy. I identified Fintech and Digital Finance as one of the five themes in Action Plan 2022.  The Department of Finance’s Fintech Steering Group leads the cross-government approach with other departments and state agencies, and with representatives of the financial services and information technologies industries, and third-level researchers. Financial Services Ireland, the Ibec sector representing financial services companies, recently identified the future talent pipeline as being critically important. Particular areas they identify are fintech, digital finance and the environmental, social and governance agenda. I will shortly be publishing the updated Ireland for Finance strategy and fintech will be a key theme, and it will be at the centre of our work in the coming years.

As the recently appointed Vice-Chair of the International Sustainability Standards Board (ISSB), Sue Lloyd will play a key role in paving the way for a “global baseline” for reliable ESG investment criteria. Elaine O’Regan talks to the New Zealand-born former IASB Vice-Chair about what lies ahead in her new role.  Prior to taking up your role with the ISSB, you were Vice-Chair of the International Accounting Standards Board for six years. Looking back on it, what do you see as your most significant achievements in that role? Completing the international IFRS Standard for insurance contracts was definitely a high point, and also chairing the IFRS Interpretations Committee from 2017 to 2022, and making it more responsive. What does your appointment as Vice-Chair of the International Sustainability Standards Board mean to you professionally? How important do you think the work of the ISSB will be, and your role in it? I see this appointment as a really exciting opportunity for me professionally. Corporate reporting is at a real turning point where we are embracing the need for the broadest set of information about sustainability, risks and opportunities to help investors make informed decisions. I am really excited and honoured to be part of that process. The ISSB has a pivotal role to play in bringing more comparability and quality to reporting on sustainability risks around the world and building a more efficient system, both for the preparers, providing the information, and also for the investors consuming them. One of my key roles as Vice-Chair of the Board is to bring to bear the standard-setting approach of the IASB. My technical skills from that world, and my knowledge of financial reporting, will help me to bring that rigor to sustainability reporting for investors. How will the ISSB’s approach to standard-setting emulate or differ from that of the IASB? How will the two bodies coalesce and work together in the future? There will be a lot of similarity with the IASB, particularly in relation to due process and the thoroughness in which we approach our work. The ISSB wants to be really inclusive and build on the viewpoints of our stakeholders. We have that in common with the IASB. Obviously, the subject matter is different. Sustainability is a more nascent area of reporting, so we will have to work more closely with our ecosystem and really work with assurers and specialists in sustainability to build this new infrastructure for reporting. The ISSB is a sister board to the IASB, and that is great because it means we are part of the same foundation. It gives us the unique ability to sit together and work out the package of information we are asking for to meet investor needs, and to make sure that the reporting and the financial statements fit well together. When the IFRS talks about the ISSB establishing a “global baseline of sustainability standards” what does this mean, and why is it important for the ESG agenda globally? When we talk about a global baseline, what we really want to do is establish a set of disclosures that are sufficient to meet the needs of investors—to enable them to understand how sustainability, risks and opportunities affect the value of a company’s shares and its debt.  We want to provide a ‘set of information’ on companies around the world so that investors can make decisions based on consistent and comparable data. That is really what a global baseline means. It will happen in practice through a combination of two different mechanisms. One will be adoption or incorporation into the regulation in different countries, so that it becomes part of the mandatory reporting system for jurisdictions, in the same way that the IASB’s accounting standards have been mandated by jurisdictions around the world.  Complementing this, we expect there to be a lot of voluntary application of the standards, separate to the regulatory element, because this is a good way for preparers to understand what information is relevant to meet investor needs.   Tell us about the ISSB’s four core pillars – governance, strategy, risk management and metrics. How relevant is each one in the context of your overall mission? Our overall objective is to make sure that investors have the information they need to understand the effects of sustainability risks and opportunities on enterprise values, share price and the value of a company’s debt.  Our pillars are the prism we use to gather sustainability information from four different perspectives. One is how a company governs its risks, and how it is managing those risks and building them into its business strategy. We also look at the metrics they use to assess where they are now, to set their targets for the future and measure their progress in meeting their targets. This ‘package of information’ is designed to meet the investor’s needs, and, importantly, it is designed to encourage companies to think about how they govern and manage risks. How will the work of the ISSB support and help investors in respect of good environmental, social and governance (ESG) practice? What other ‘ESG stakeholders’ will benefit from your work? We know that there are different parties who are interested in information about sustainability, not just investors. We want to facilitate the provision of information to all of them. We want to make this an efficient reporting system for public policy purposes and for broader stakeholder groups beyond investors, for example. One of the aspects that we are focusing on here is what we call the “building block” approach.   This means that, when we are building our requirements, we have investors’ needs in mind, but we also want to make sure that others can add specific investor requirements onto our disclosures to meet broader needs. If we can avoid the need to have one set of disclosures for investors and a completely separate set for broader stakeholders, it is more efficient for those preparing the information. Tell us about the first draft ISSB standards, published in April. What do these draft standards provide for, how is the consultation process progressing and what will the next steps be? There are two documents. The first is the General Requirements Exposure Draft, which sets out the overarching requirements for what should be provided for in sustainability reporting.  It asks companies to provide information about all of their significant sustainability risks and opportunities relevant to enterprise value assessment.  It also sets out some other general ideas—for example, the fact that you should be able to understand how this information relates to the financial statements and the proposal that this information be provided at the same time as the financial statements. The second document is the Climate Exposure Draft, which sets out what specific disclosures should be provided by a company about climate risks and opportunity. This means that, if a company using the General Requirements Exposure Draft identifies climate risks and opportunities as a “significant” sustainability-related risk and opportunity, they can turn to the Climate Exposure Draft to find out what disclosures to provide.  That document is asking for information about the physical risks of climate change the company is exposed to—flood risk, for example—but also opportunities arising from climate change. If a company has developed a product, which may become more popular because of climate change, investors may want to hear about that as much as they would climate-related risk.  These drafts are out for comment until 29 July, 2022. Once we get the feedback, we will decide what we need to adjust, what we can keep as is, and then we will move on to the final requirements. How do you foresee the “roadmap” of additional draft standards rolling out beyond these first two? What standards are next on the agenda for consultation and what is the anticipated timeline for their introduction? Our next step will be to ask our stakeholders what they think we should prioritise after the General Requirements Exposure Draft and Climate Exposure Draft documents are approved.  We only have so much time, and the same is true for our stakeholders, so it is important to us to ascertain where the greatest needs lie. In other words, it is really up to the stakeholders to decide what we work on next. How will the International Sustainability Standards Board (ISSB) build on work already carried out by the Task Force on Climate-Related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB)? Our four core pillars (governance, strategy, risk management and metrics) are taken straight from TCFD recommendations, and they form the backbone of the proposals we have out for comment.  We have incorporated their structure and the climate disclosures included in the TCFD have been incorporated into our Climate Exposure Draft. We have built on SASB materials in two ways. Industry-based requirements in the appendix to the Climate Exposure Draft are taken from SASB’s industry-based standards.  We took the climate-related metrics and included those in the Climate Exposure Draft as part of the mandatory climate disclosures.  We are asking stakeholders to use SASB guidance to help them meet their disclosure requirements in the General Requirements Exposure Draft up until the time we draft more specific disclosure requirements of our own. How do you foresee the ISSB working alongside, and collaborating with, other standard-setting and regulatory bodies and initiatives like the Securities and Exchange Commission (SEC) the Global Reporting Initiative (GRI) and European Financial Reporting Advisory Group (EFRAG)? Having our proposals out for comment at the same time as the SEC and EFRAG proposals means that we have a unique opportunity to compare and contrast these different proposals and bring as much commonality as we can to our requirements. In an ideal world, we want to work together to build this global baseline and ensure as much consistency as possible with the SEC, EFRAG, the Global Reporting Initiative (GRI) and others.  We have a Working Group tasked with doing so with the US, Europe and also China, Japan and the UK. We are encouraging our stakeholders to write to the SEC and to let the commission know if they think that the global baseline is important.  The GRI is also very important and is a really good example of the ‘building block’ process that I described earlier.  We have a Memorandum of Understanding with GRI. One of our aims is to work together to form a global baseline we both agree on to meet investor needs and to encourage GRI to add the additional pieces of information to meet the broader information needs.