A new guide on navigating the sustainability-reporting landscape has been published, and is free to download and circulate. While business performance has historically been measured in financial terms, over the past two decades reporting requirements have been changing rapidly. Societal awareness of environmental and social issues is increasing and, as a result, stakeholders are demanding a wider range of information with a clear global trend towards mandatory sustainability reporting.
‘Navigating the Reporting Landscape’ gives finance professionals an introduction to this sustainability-related reporting. Created by A4S and its Accounting Bodies Network (of which Chartered Accountants Ireland is one), the publication offers a brief introduction to the changing corporate reporting landscape. It summarises recent key developments in sustainability reporting and shows how it is impacting the role of the accountant and shaping the future of corporate reporting. It also highlights how this area is likely to evolve going forward, offering signposting to further sources of information.
The guide can be downloaded here.
Chartered Accountants Ireland responds to the public consultation on Northern Ireland’s Climate Change Bill
Chartered Accountants Ireland has responded to the public consultation on the call for views on the Northern Ireland Climate Change Bill. This Bill aims, among things, to establish a legally binding net-zero carbon target for the region and provide for a Northern Ireland Climate Commissioner and Northern Ireland Climate Office.
Chartered Accountants Ireland supports the objective of introducing legally binding greenhouse gas emissions in Northern Ireland. The lack of legislative basis, to date, has been prohibitive in reducing greenhouse gas emissions in Northern Ireland, which is currently the lowest performing devolved region of the UK in this respect.
Among other recommendations, we also specifically advocated for the following:
- accountability, which will be critical to ensuring sectoral targets are met
- the setting out of interim targets for emissions-reduction
- government incentives for people and businesses to switch to less carbon-intensive technologies
- a forum in Northern Ireland for professional bodies, such as Chartered Accountants Ireland, and government agencies to meet regularly, exchange information and ideas and collaborate in communications to the enterprise sector
- Climate Action Plans (CAPs) to be ‘living documents’, monitored every quarter and updated annually
- clarity around who will set the targets within the CAPs, how each department and public body are to be held accountable for the delivery of actions, and who will be responsible (and what the ramifications will be) where targets or measures are not met
- a specific board established within the Assembly to hold departments and public bodies accountable for delivering the CAP
- a requirement to carry out an assessment of the economic impact of the level of changes that are required to achieve Northern Ireland’s targets
- the appointment of a specific body to recommend the appropriate five-year carbon budgets, from which clear decarbonisation targets can then be set for each sector, and against which the Minister with primary responsibility for that sector would report on progress annual to the Assembly.
- that every public body should have to adopt a mandate for climate action and embed decarbonisation measures across all their services
- that all government decisions and major investments should be ‘carbon proofed’, and this should be enshrined in law.
Our response to the consultation can be found here.
UK government publishes Green Jobs Taskforce report
The UK’s Department of Business, Energy & Industrial Strategy has published it’s Green Jobs Taskforce Report. The report, which was written between November 2020 and July 2021, brings together evidence on the skills needed for the UK’s transition to net zero, and sets out the recommendations for how all stakeholders can work together to manage the opportunities and the challenges of the transition to net zero.
The report was issued by the Green Jobs Taskforce, which comprises members from industry, academia, unions, and the education and skills sector, and advises government, industry and the education sector. The UK government will consider the Taskforce’s evidence and recommendations in the development of the UK’s first Net Zero Strategy, to be published before COP26 in November this year.
A seismic shift for climate action
It’s been a busy fortnight for climate and environmental action. First, the secretariat of the UN Convention on Biological Diversity published the first draft of a new global agreement to reverse biodiversity loss by mid-century. The draft text proposes, among other things, placing at least 30 per cent of the world’s land and seas under protection, reducing subsidies that are harmful to biodiversity and increasing financial resources for biodiversity protection. Countries are under pressure to reach an agreement on the draft deal at the 15th Conference of the Parties in China in October, as none of the targets set in 2010 were fully met by the 2020 deadline.
On Wednesday the European Commission adopted ‘Fit for 55’ – an enormous package of legislative proposals to make the EU's climate, energy, land use, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55 per cent by 2030 (compared to 1990 levels). The package contains the legislative ‘tools’ to deliver on the targets agreed in the European Climate Law, and will fundamentally transform Europe’s economy and society.
The proposals are ‘connected and complementary’ and include changes to the EU Emissions Trading Scheme (ETS) and the Effort-Sharing Regulation, as well as to regulation on land use, forestry and agriculture, renewable energy and energy efficiency, CO2 emissions standards for cars and vans, requirements for aviation and maritime fuels, the Energy Taxation Directive, and a new Carbon Border Adjustment Mechanism which will put a carbon price on imports of a targeted selection of products to avoid ‘carbon leakage'. A new Social Climate Fund has also been proposed, financed by the EU budget, to provide dedicated funding to Member States to help citizens finance investments in energy efficiency, new heating and cooling systems, and cleaner mobility.
A complementary initiative to the Fit for 55 Package had already been published in July, when the European Commission issued its sustainable finance strategy and proposed a Regulation to create the “European Green Bond Standard” or “EUGBS” (a voluntary “gold standard” for green bonds).
The Sustainability Finance Strategy outlines the role of the finance sector in helping meet the EU’s targets to strengthen its resilience to climate change, reverse biodiversity loss and the broader degradation of the environment, and to leave nobody behind in the process.
Speaking at the launch of the strategy and EUGBS, on 6 July Commissioner Mairead McGuinness, MEP, described climate change as a risk to financial stability, and further stated that what’s needed is a financial system that is resilient against physical and transitional shocks, particularly “the risk of a financial shock if our move towards sustainability is disorderly”.
The Strategy will help the economy transition to sustainability using four pillars: transition, inclusiveness, resilience and the global perspective, and will build a more inclusive sustainable finance framework.
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