Public Policy Bulletin, 17 July 2020

Jul 17, 2020

In today’s Public Policy news, the Irish Government has launched the largest credit guarantee scheme in the history of the State, standing at €2 billion. The Irish Fiscal Advisory Council published its first Long-Term Sustainablity Report and the National Economic and Social Council published a working paper calling for urgent environmental sustainability measures to be among catalysts for economic recovery.  You can also read about the Sustainability Accounting Standards Board and the Global Reporting Initiative response to providing clarity in the area of sustainable reporting. 

“New €2 billion Credit Guarantee Scheme largest in the history of the State”

A new €2 billion COVID-19 Credit Guarantee Scheme has been announced on Tuesday 14 July, which will make low cost loans available to businesses impacted by the pandemic, providing much needed liquidity as the Irish economy continues to reopen.

This Scheme will be the largest credit guarantee scheme for businesses in the history of the State. It will ensure that SMEs, primary producers and small Mid-Caps can access liquidity to keep their businesses operating, as the economy continues to reopen and more people get back to work. It will be available for a wide range of products including overdrafts, term loans and working capital.

The Government has agreed to publish the Credit Guarantee (Amendment) Bill 2020, which will underpin the scheme and will also remove the portfolio cap, which will result in an increased potential maximum liability for the State of €1.6 billion. This bill is due to go through the Oireachtas next week.

Irish Fiscal Advisory Council warns that retirement age leaves public finances 'vulnerable and unsustainable'

The Irish Fiscal Advisory Council (IFAC) on July 15 published its first Long-Term Sustainability Report, which assesses the sustainability of the State’s public finances for the period 2025-2050. The projections reflect population ageing and expected future economic growth. 

The report warns that failure to increase the pension age as planned in 2021 would cost €575 million annually, with that figure rising over time, leaving the public finances on a vulnerable and unsustainable footing. 

The report advises that the age should be pushed out to reflect increasing levels of life expectancy, and argues that ageing pressures mean the cost of maintaining existing services levels each year would “exceed the available fiscal space” by an average of €1.7 billion per year by the early 2030s.

“Given the scale of the challenges, a combination of measures is likely to be needed,” the report said, and suggested reducing benefits through indexing to prices (rather than wages), raising the retirement age, raising PRSI contributions, developing a second contributory pillar or encouraging more private pension saving.

Read the full report here.

National Economic and Social Council sets out actions needed for sustainable recovery

On 14 July the Secretariat of the National Economic and Social Council published a working paper in which it advises that green investment is key to Ireland’s economic recovery from Covid-19. 

The paper’s author, Dr Jeanne Moore, identified catalysts for Ireland’s economic recovery from the Covid-19 pandemic, including urgent environmental sustainability measures. Although the progress green and sustainable is positive, the paper notes “delivering sustainability will require more than navigation and ambition but will necessitate concrete innovative and collaborative action on multiple fronts including governance, finance, business and technological innovation and a just transition”.

The paper, titled Progressing Sustainability in the Context of Covid-19: Grasping the Opportunity, suggests four concrete strategies for building-in sustainability with a focus on ways to deepen resilience and sustainability in practice:

  1. Supportive Sustainability and Wellbeing Frameworks
  2. Green Investment and Conditionality
  3. ustainability: Building Resilience in Cities, Communities and Governance
  4. Applying a Just Transition Approach in Practice.

SASB and GRI respond to rising global demand for clarity in sustainability reporting

On Monday 13 July, the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) announced a collaborative workplan to provide more clarity on how their two sets of standards can be used together for sustainability reporting by the end of 2020. The announcement comes amid rising global demand for clarity in a sustainability disclosure landscape that can at times seem complicated.

Initially the collaboration will focus on delivering communication materials to help stakeholders better understand how the standards may be used concurrently, and how the standards can be used together, but it is expected that this may lead to the identification of further collaboration opportunities.

GRI and SASB provide compatible standards for sustainability reporting. Both have already been working together as part of the Corporate Reporting Dialogue, an initiative organised by the International Integrated Reporting Council that has been working to bring together the various standard-setters to promote greater consistency and comparability among the different sets of standards and frameworks for non-financial reporting.

Some companies use both standards, making their reporting effort high. To help address this, SASB and GRI plan to collaboratively demonstrate how some companies have used both sets of standards together and the lessons that can be shared. GRI and SASB also aim to help the consumers of sustainability data understand the similarities and differences in the information created from these standards.

For more information see our in-depth coverage of this news piece.

Read all our updates on our Public Policy web centre.