Public Policy Bulletin, 13 November 2020

Nov 13, 2020


In this week’s Public Policy news, read about the launch of Chartered Accountants Ireland’s new resources on sustainability for accountants; Skillnet Ireland’s new strategy to prepare businesses for the future world of work; the continuing economic impact of COVID-19 on Northern Ireland;  the UK’s moves to become a world leader in green finance; and the EU budget to build a greener, more digital and resilient Europe.

Launch of Sustainability for Accountants

The Institute launched Sustainability for Accountants, a practical, easy-to-read short guide to help accountants understand sustainability and discover how to implement sustainability practices in their own organisations.

The guide, along with an online sustainability hub, were launched as part of Climate Finance Week 2020 at a webinar at which former Institute president Terence O’Rourke joined a panel of Dr Rodney Irwin, Managing Director of Redefining Value at the World Business Council for Sustainable Development and Cróna Clohisey, Institute Public Policy Lead, to discuss the role accountants have in embracing sustainability. Moderated by Dr Brian Keegan, Director of Advocacy and Voice, the webinar also included a keynote address by the current Institute President Paul Henry.

Speaking about sustainability, Terence O’Rourke stated that “Chartered accountants have a key role in helping organisations focus on, and effectively use, the measurement and reporting of key metrics. Increasingly, sustainability measures are becoming more important.  It is vital that we accountants are capable of supporting and leading our organisations transform our regular management and board reporting to encompass the recording and clear presentation of  sustainability KPIs”.

You can watch a recording of the event using this link (video starts at 2:14:41).

Skillnet Ireland launches new strategy to prepare businesses for the future world of work

Skillnet Ireland this week launched a 5-year strategy Transforming Business Through Talent 2021-2025. Centring around the three themes of workforce design, people development and strategic innovation, the strategy sets out ambitious targets to increase the organisation’s engagement with business and industry, training and upskilling the workforce to combat challenges including Covid-19, Brexit, climate change, and automation.

Minister for Further and Higher Education, Research, Innovation and Science, Simon Harris, TD, described the strategy as “a key milestone in Ireland’s economic recovery and growth… designed to help our businesses and workers prepare for the future world of work. Having a skilled and agile workforce is essential to how we respond to current and future business challenges.”

Skillnet Ireland, whose mandate is to advance the competitiveness, productivity, and innovation of Irish businesses through enterprise-led workforce development, is currently funded from the National Training Fund through the Department of Further and Higher Education, Research, Innovation and Science, with employers paying a contribution towards some training programmes.

Economic impact of COVID-19 on Northern Ireland continues

Figures published this week by the Northern Ireland Statistics and Research Agency have revealed that redundancies in Northern Ireland more than doubled in 2020, with record high numbers recorded in June and July. An Ulster Bank Survey, which analyses private sector companies, has reportedly indicated that business output in Northern Ireland ‘stagnated’ in October as new orders decreased and staff cuts continued. It also indicated that any prospect of a return to growth is unlikely in the near future.

Research carried out by the Department for the Economy to analyse the economic impact of the four-week ‘circuit breaker’ during the coronavirus pandemic also revealed that it may lead to a loss of £400m to the economy, on top of losses of £4bn to 5bn already this year.

The UK similarly recorded a record high number of layoffs during the third quarter, with the Office for National Statistics reporting that redundancies had reached an all-time high of 314,000.

UK seeks to become a world leader in green finance

The UK government this week announced that it would sell its first sovereign ‘green’ bond next year, and announced the intention to mandate climate disclosure by large companies and financial institutions across the economy by 2025.

The move, announced in a speech about the future of the financial sector on Monday by Chancellor of the Exchequer Rishi Sunak MP, was described as “truly transformative” by Mardi McBrien, Managing Director, Climate Disclosure Standards Board (CDSB). McBrien further commented:  “Mandatory implementation of climate risk disclosures using the TCFD recommendations across major sections of the UK economy by 2025 will improve business resilience, level the playing field for companies and investors reporting on climate and drive investment to finance the UK’s transition to a net zero future.”

The announcement came on the same day that Mark Carney, the British Prime Minister’s finance advisor for green finance and former Bank of England governor called on the world’s governments to adopt internationally standardized regulations of climate-related disclosures for the financial sector. Carney described climate change as a “crisis which involves the entire world, and from which no one will be able to self-isolate”.

Also this week, the Financial Reporting Council published a review in which it stated that corporate reporting needs to improve, and that investors expect to see disclosures regarding the financial implications of climate change. The Council in the review encourages PIEs to report against the TCFD and SASB metrics for their sector.

Agreement on EU budget to build a greener, more digital and resilient Europe

The European Commission this week welcomed agreement on Europe’s next long-term budget and NextGenerationEU, its temporary recovery instrument, following interinstitutional negotiations between the European Parliament and the Council, and with the participation of the European Commission. Once adopted, the package of a total of €1.8 trillion will be the largest package ever financed through the EU budget.

The package will help rebuild a post-COVID-19 Europe, which will be greener, more digital, more resilient and better fit for the current and forthcoming challenges. Described as a budget fit not only for today's realities but also for tomorrow's uncertainties, 30 percent of  EU funds will be spent to fight climate change, the highest share ever of the largest European budget ever. The package also pays specific attention to biodiversity protection and gender equality, and will have strengthened flexibility mechanisms to guarantee it has the capacity to address unforeseen needs.

The Commission has committed to put forward proposals on a carbon border adjustment mechanism and on a digital levy by June 2021, with a view to their introduction at the latest by 1 January 2023. The Commission will also review the EU Emissions Trading System in spring 2021, including its possible extension to aviation and maritime. It will propose an own resource based on the Emissions Trading System by June 2021.

Read all our updates on our Public Policy web centre.