This week’s bulletin brings you more highlights from the major global climate summit, COP26 that concludes in Glasgow today, as well as other business news for Ireland and Northern Ireland. Also covered is the publication of the EU Autumn 2021 Economic Forecast which predicts continued expansion of the EU economy over the forecast horizon.
COP26 comes to a close as pressure builds for a deal
The major two-week long global climate summit COP26 is wrapping up today (Friday) in Glasgow, as negotiators conclude a deal on a global response to climate change.
This week, following a three-day debate between the almost 200 countries represented in Glasgow, a deal for the COP26 climate talks will be published today (Friday). On Wednesday, a draft deal called on countries to submit new pledges to align their targets with limiting global warming to 1.5 degrees Celsius in 2022, stressing the urgent need for increased ambition and action in relation to mitigation, adaptation and finance in this critical decade to address the gaps in the implementation of the long-term goals of the Paris Agreement.
Pressure increased following the publication by the independent research group Climate Action Tracker of a report which warned that global temperatures are on track to rise by 2.4 degrees by the end of the century, well above the 1.5 degree Celsius target for global warming, set out in the 2015 Paris Agreement. Climate Action Tracker described the targets for 2030 as “totally inadequate” and that there has been “insufficient momentum from leaders and governments to increase 2030 climate targets ahead of, and at, Glasgow.”
Chartered Accountants Ireland’s Public Policy Team have collated a round-up of each day’s news from COP26, as well as round-up from Week 2 here, and you can find other COP26 and climate resources on our dedicated COP26 page.
Tánaiste offers reassurances for businesses following publication of Climate Action Plan 2021
Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar TD, issued a statement reassuring business owners who may be concerned about what the Climate Action Plan may mean for their business:
“I want to reassure business owners today that the Government will help you make this transition. Whether you’re a SME or large business, we will meet you where you’re at and help you make the changes that are necessary.
Tánaiste Varadkar pointed to a website that will shortly be launched called the Climate Toolkit 4 Business. This will allow businesses to input information and receive an estimate of their carbon footprint and a personalised plan to reduce it. The plan will also point users to grant funding available through the Enterprise Ireland Climate Enterprise Action Fund, for example, and the Sustainable Energy Authority of Ireland, to help businesses make changes to buildings and energy use.
The Institute has written to Minister for the Environment, Climate and Communications, Eamon Ryan, TD, to suggest that the Irish Government draw from the collaborative approach adopted by the Institute which has leveraged and profiled the expertise among our membership base, so that members can learn from colleagues who are driving action on the climate crisis in their organisations in ensuring that Irish enterprise is energised to decarbonise and remain competitive in the coming years.
How Climate Action Plan impacts business
The Climate Action Plan reflects the Government’s ambition to meet a 51% reduction in greenhouse gas emissions by 2030 and to achieve net-zero emissions no later than 2050. The enterprise sector has been tasked with reducing emissions to 5 MtCO2eq. by the end of the decade. To put this in context, the sector emitted 7.9 MtCO2eq., or 12.7% of Ireland’s total emissions in 2018.
Tánaiste Varadkar stated: “Most of the emissions from the enterprise sector come from a small number of large energy users and my officials have already been working directly with them to help them make the shift away from fossil fuels and to explore new materials which are less damaging to the environment. I also believe that there is a huge amount of opportunities in the transition. We will be creating entire new industries in retrofitting and offshore wind for example and creating new employment opportunities in the circular economy, clean mobility, green and blue infrastructure, sustainable agriculture and the bioeconomy.”
The statement from the Tánaiste came a week before the October Exchequer figures were published, showing that tax revenues were €1.3 billion ahead of profile and €2 billion up on the same period last year. Contributing to this was the strong performance of corporation tax receipts, which were nearly €1 billion higher than profiled. Income tax receipts are noted as being robust, with €2.2 billion collected in October (€330 million higher than profiled and €640 million ahead of the same period last year) and the Exchequer deficit recorded to the end-October was €7.4 billion, a €4.2 billion improvement on the same period last year. Further details are can be found in coverage by the Institute’s Tax Team.
New grant to support local Northern Ireland businesses
Also this week, Northern Ireland Economy Minister Gordon Lyons announced a new grant to support local businesses to develop and implement innovative projects. The £4million Economic Recovery Innovation Grant (ERIG) will provide up to £5,000 of support to SMEs develop new, or improve existing, products, services or processes through innovation.
Businesses can access up to a maximum grant of £5,000 to support eligible costs to progress their innovative idea/project. Such costs may include testing and developing new products or processes; Equipment; Skills Development; Marketing; and consultancy. Full details on the scheme, eligibility criteria and how to apply are available on Invest NI's website.
The announcement was made the same week in which the Office for National Statistics (ONS) announced that the UK economy grew by 0.6 percent in September but remains 0.6 percent below its pre-pandemic level of February 2020. The ONS also revised GDP estimates for July and August downwards, suggesting that output in all sectors of the economy remains below pre-crisis levels despite the improvement over the summer following the relaxing of coronavirus restrictions.
SEAR legislation
This week, Minister for Finance Paschal Donohoe gave an update to the Committee on Finance, Public Expenditure and Reform on the General Scheme of the Central Bank (Individual Accountability Framework) Bill that was published in July and is currently being drafted.
The aim of the Bill is to ensure greater levels of accountability across the financial sector and enable financial institutions to address meaningful cultural change.
There are four main aspects to the Individual Accountability Framework, with one key element being the Senior Executive Accountability Regime (SEAR).
A commitment under the Programme for Government, SEAR will:
- place obligations on firms and senior individuals within them to set out clearly where responsibility and decision-making lies;
- prescribe mandatory responsibilities for firms, which must be allocated to individuals carrying out senior roles to ensure accountability for all key conduct and prudential risks.
- impose a duty of responsibility on each person in a senior role to take reasonable steps to avoid their firm committing or continuing to commit a “prescribed contravention” in relation to the areas of the business for which they are individually responsible.
Firms will be required to provide the Central Bank written accounts of management responsibilities and SEAR will facilitate the holding to account of individuals for the way in which they discharge their responsibilities and for any failures or wrongdoing in that regard.
In our latest edition of the Next Financial Year, this Institute called for the SEAR legislation to be clear how senior executives are to be held accountable and how the regulator’s powers are appropriately balanced to allow for fair due process and a timely conclusion of investigations. We also asked that a sufficient transition period should be provided to ensure organisations have enough time to effectively manage their obligations under this new regime published earlier in the summer.
Read more.
EU Developments
At Tuesday's high-level plenary session at COP26, the European Commission announced that it would pledge of €100 million in finance for the Adaptation Fund, a fund to which governments and private donors donate finance to fund projects and programmes that will help vulnerable communities in developing countries adapt to climate change. It was created following a decision taken by COP 7 in 2001 and launched in 2007. Since 2010 it has committed US$ 868 million to projects and programmes. $232 million has been committed to the Adaptation Fund by other countries collectively, including Ireland and the UK, the highest single mobilisation to the Fund and more than double the previous highest collective mobilisation with a £15m contribution from the UK and of at least €10 million from Ireland between now and the end of 2022.
Separately the EU economy is reportedly rebounding from the pandemic recession faster than expected, with growth in spring continuing through summer, underpinned by the re-opening of the economy. The EU economy is projected to keep expanding over the forecast horizon, achieving a growth rate of 5 percent, 4.3 percent and 2.5 percent in 2021, 2022 and 2023 respectively. Growth rates for the euro area are projected to be identical to those for the EU in 2021 and 2022, and 2.4% in 2023. The forecast is based on a set of technical assumptions concerning exchange rates, interest rates and commodity prices with a cut-off date of 19 October, and the above outlook depends heavily on:
- the evolution of the COVID-19 pandemic and
- the pace at which supply adjusts to the rapid turnaround in demand following the re-opening of the economy.
For more, download the Autumn 2021 Economic Forecast here.
You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our Sustainability Centre.
You can find information on COP26 and climate on this new dedicated COP page.
Read all our updates on ourPublic Policy web centre
You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our Sustainability Centre.
You can find information on COP26 and climate on this new dedicated COP page.
Read all our updates on our Public Policy web centre
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