In this week's, Sustainability/ESG Bulletin read about tax measures for electrical vehicles now in effect from Budget 2025, detailed climate projections and new funding for adult financial literacy projects in Ireland. Also covered is the entering into application of new EU rules to improve gender balance in corporate boards, a new OECD paper on how public budgeting can support climate goals, the departure of US firms from the Net-Zero Banking Alliance, as well as technical updates, articles, podcasts and upcoming events.   Ireland news EV tax measures from Budget 2025 now in effect   The following tax measures pertaining to Battery Electric Vehicles (BEVs) announced in Budget 2025 took effect from Wednesday 1 January 2025: BIK Exemption for Installation of BEV home charger: From 1 January 2025, a benefit-in-kind (BIK) exemption will apply to the installation of a battery electric vehicle (BEV) home charger by an employer at a director’s or an employee’s private residence. This means that a director or employee will not pay BIK on the installation of a home charger, which is required for work purposes and aims to support the rollout of BEVs in the commercial fleet. VRT Rate Change for Commercial Battery Electric Vehicles (BEVs): Finance Act 2024 amended the weight ratio requirement from 130% to 125% for commercial electric vehicles in order to qualify for the €200 category C VRT rate. This amendment comes into effect from 1 January 2025.   Climate Projections for Ireland: Key Findings and Implications Scientists based at the Irish Centre for High-End Computing (ICHEC) in the University of Galway have warned that Ireland’s future weather will be even warmer and wetter than previously predicted. Commenting, the report’s lead author, Paul Nolan, said that it is imperative that planners and policymakers are adequately informed about future climate change so they can implement appropriate mitigation and adaptation measures: “This research will inform national policy and further our understanding of the impacts of climate change at a local scale”.   New funding for adult financial literacy projects in Ireland The Competition and Consumer Protection Commission (CCPC) is to contribute €250,000 towards adult financial literacy projects in 2025 supporting adults with the skills needed to build financial literacy and access financial services. Latest figures from the Programme for International Assessment for Adult Competencies (PIAAC) published by the OECD show that one in four adults in Ireland struggle with everyday maths. The funding announcement by the CCPC follows the publication in April 2024 by the Department of Finance of a mapping report into the development of a Financial Literacy Strategy.   Export phase of Small-scale Renewal Electricity Support Scheme The terms and conditions of the export phase of the Small-scale Renewable Electricity Support Scheme (SRESS) have been published. They have been designed with the aim of providing a simpler route to market for community and small-scale projects, and to align more closely to the experience and capacity of this sector. Commenting, Eamon Ryan, Minister for the Environment, Climate and Communications described the approval of the SRESS terms and conditions as “an important milestone for communities, SMEs [Small and Medium Sized Enterprises], farmers and others to maximise their participation in the energy transition.” The scheme is due to open for applications on 27 January 2025.   Northern Ireland news Business in the Community Northern Ireland (BITCI), in partnership with Diversity Mark, has announced a new series of monthly online sessions aiming to support businesses in creating more diverse and inclusive workplaces. The first session, ‘From Awareness to Action: Building Disability Inclusive Workplaces’ will take place on Tuesday 28 January, 10:00 – 10:45am.   Europe news New EU rules to improve Gender Balance in corporate boards enter into application New EU rules to improve Gender Balance in corporate boards have entered into application. The Gender Balance on Corporate Boards Directive, which entered into application at the end of 2024, aims for a more balanced gender representation on the boards of listed companies across all EU Member States. The Directive sets a target for EU large listed companies of 40% of the underrepresented sex among their non-executive directors and 33% among all directors. The deadline for the transposition by Member States was 28 December 2024, and companies must meet the targets by 30 June 2026.   World news OECD publishes paper on how public budgeting can support climate goals The OECD has published a paper on how public budgeting can support climate goals. The paper, Beyond green tagging, discusses new instruments to better link budgets and results, the challenges involved in linking budget and emissions, and the steps needed to overcome them.   Net-Zero Banking Alliance loses firms Several major Wall Street banks, including Bank of America, Citigroup, Goldman Sachs, JP Morgan, Morgan Stanley and Wells Fargo have left the Net-Zero Banking Alliance – a group dedicated to helping lenders reduce their carbon footprints. More US banks are expected to follow their lead, in a development reportedly reflecting growing anti-ESG sentiment in the US.   LA fires damage and economic loss potential A preliminary estimate of the financial impact of the damage and economic loss caused by the Los Angeles wildfires of $52 billion is likely to make it one of the costliest natural disasters in US history.  Burned homes and losses in tourism are among the major long-lasting costs resulting from the fires, which are thought to be the result of high winds, lack of rain and climate change. Technical Updates (From our colleagues in Professional Accounting) EFRAG has added further non-authoritative technical explanations to its compilation of explanations that are intended to assist stakeholders in the implementation of the European Sustainability Reporting Standards (ESRSs).  EFRAG has also published an addendum to EFRAG IG 3 ‘ESRS Datapoints’, which is part of EFRAG's non-authoritative implementation guidance on the European Sustainability Reporting Standards (ESRSs)   EFRAG has announced that it has delivered its technical advice on the Voluntary SME (“VSME”) standard to the European Commission. EFRAG has also released some educational videos on the VSME standard.   The International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB) recently launched a webcast series to discuss how IFRS Accounting Standards and IFRS Sustainability Disclosure Standards complement each other.     The FRC, in its role as the Secretariat to the UK Sustainability Disclosure Technical Advisory Committee, has published the Committee’s final recommendations to the Secretary of State for Business and Trade, recommending endorsement of the first two IFRS Sustainability Disclosure Standards for use in the UK.   Chartered Accountants Ireland has issued Technical Alert 04/2024 Sample CSRD Limited Assurance Report. This is in addition to Technical Alert 02/2024 – Sample Engagement Letter Terms in respect to the provision of Limited Assurance under the Corporate Sustainability Reporting Directive, issued in June 2024.   The Institute has revised the CPD Regulations with effect from 1 January 2025. CPD Regulation 4.6 now specifically mentions 'sustainability assurance' as a subject area in which a member who is working in practice should undertake CPD if that member is involved in work of this nature.  Read more here   Accountancy Europe has published a new webpage of FAQs: fundamentals to assurance on sustainability reporting  The International Federation of Accountants (IFAC) and the We Mean Business Coalition (WMBC), together with the Global Accounting Alliance (GAA), have published a report titled ‘Building Trust in Sustainability Reporting and Preparing for Assurance: Governance and Controls for Sustainability Information’.   Accounting for Sustainability (A4S) is preparing a series focused on nature to assist accountants and finance professionals in shaping a nature-positive economy that supports long-term value creation. The first guide in the series, The Business Case for Nature, explains why nature is vital to business and offers clear steps and practical tips for developing the business case for your organization. Articles Irish listed firms must ‘take action’ to meet new EU gender targets (Business Post) The antidote to doom is doing (FT-SustainableViews)   Podcasts Bloomberg’s Akshat Rathi talks to science fiction writer Kim Stanley Robinson, author of the seminal 2020 novel Ministry for the Future which is set in the year 2025 (Bloomberg) Events SEAI, Introduction to Energy Management Training The Sustainable Energy Authority of Ireland (SEAI) is running a free online workshop on the basics of implementing energy management within your business. Virtual, Thursday, 16 January, 2-4pm Jobs Trinity College Dublin seeks a researcher/project manager for Ecosystem Accounting project (Job details)   Sustainability Centre You can find information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre.  

Chartered Accountants Ireland has today circulated the Institute's Key Policy Priorities, based on member engagement, as discussions commence on the formation of the next Government. Focused on supporting small business and improving childcare provision for working parents, we will continue to amplify our members' voices as the negotiating process continues.

The global climate summit ‘COP29’ has concluded in the early hours of Sunday morning, 24 November, a good 32 hours after the summit was scheduled to finish in Baku, Azerbaijan. The gavel descended on the fourth longest COP on record with the agreement ‘The Baku Finance Goal’, a new finance target for tackling climate change. This New Collective Quantified Goal (NCQG) replaces the goal initially agreed in 2009 for developed nations to provide $100 billion annually in climate financing for developing countries.  The final figure of $300 billion a year for climate vulnerable countries has been the subject of much debate, either derided as ‘totally unacceptable and inadequate’ and ‘sleight of hand accounting’, or heralded as an ‘insurance policy for humanity’ and ‘keeping the core principles of the Paris Agreement alive’. COP summits have long been criticised as ‘talking shops’, seen by many as overly influenced by fossil fuel lobbyists. The summits are characterised by round after round of negotiations between the parties (countries) which have agreed to participate in – and be bound by – the UN treaties to the United Nations Framework Convention on Climate Change Treaty (UNFCCC). Progress appears incremental – even tortuous at times – when what is required is urgent, sweeping change in the face of existentialist crises. This was the first COP to have climate finance as the main item on the agenda. The new Baku Finance Goal’ of $300 billion a year is to help developed countries build resilience, prepare for disasters and cut emissions of planet-warming greenhouse gases. However, the new goal falls far short of the $1 trillion that was generally accepted to be the amount needed per year by 2030, rising to $1.3tn by 2035. While a larger overall target of $1.3 trillion per year is posited in the final agreement, most of this is to come from private sources, despite urgent calls from developing countries for it to come from public sources instead. Speaking from Baku, Ireland’s Environment Minister Eamon Ryan, described the agreement as “far from perfect and it does not go nearly far enough, particularly on mitigation, gender and human rights – but it keeps the core principles of the Paris Agreement alive and it gives us a basis to work from as we move forward to make COP30 in Brazil transformational”. EU climate envoy Wopke Hoekstra said COP29 would be remembered as “the start of a new era for climate finance”.  However, UN Climate Change Executive Secretary Simon Stiell warned in his remarks made at the closing of the summit that “like any insurance policy – [the new finance goal] only works – if premiums are paid in full, and on time. Promises must be kept, to protect billions of lives.” Fossil fuels A major theme of COP29 was to build on last year’s ‘global stocktake’ commitment in the UAE to transition away from fossil fuels. The parties Baku failed to reach an agreement on this key issue, with the text lacking any explicit mention of the commitment to “transitioning away from fossil fuels”. The parties chose instead to hold over the decision to COP30 next year in Brazil. Voluntary carbon market Article 6 of the Paris Agreement had set out how countries can pursue voluntary cooperation to reach their climate targets, but it took a decade of deliberation for countries to finally agree a deal at COP29 to allow carbon trading between nations. The framework allows countries to trade carbon credits with each other, as well as companies and, critically, details an accounting system for how a country selling a credit can deduct that from its national carbon ledger to prevent the same credit from being used twice. Although experts worry that the carbon market rules will not be strong enough to weed out bad offsets, many see the agreement as welcome development, with hopes that the signing off of the rules will create an international carbon trading system for countries to meet their Paris commitments. What happens next COP30 will take place in Belém, Brazil. It will focus on efforts by each country to reduce national emissions and adapt to the impacts of climate change (the so-called ‘NDCs’ or ‘nationally determined contributions). It will also be the last of a so-called ‘troika’ of COPs, which started with COP28 in Dubai in 2023 and progressed through COP28, with its focus on climate finance. The idea behind that troika, agreed on at COP28, is that the three COP presidencies will collaborate on various activities to raise ambition across all pillars of the Paris Agreement on a Roadmap to Mission 1.5°C, ‘from Baku to Belém and beyond’. In addition to highlighting the importance of protecting the Amazon rainforest for the planet's ecological balance, COP30 has been described by G20 leaders as “our last chance to avoid an irreversible rupture in the climate system”. Read more Making sense of the COP29 outcome (Financial Times) The Irish Times view on Cop29: multilateral approach on climate just about hangs on (Irish Times) COP29: Key outcomes agreed at the UN climate talks in Baku (Carbon Brief)

COP29 – the 2024 global climate summit – is coming to a close, after two weeks of negotiations in Baku, Azerbaijan. Climate finance has been a major focus of the summit, particularly the setting of a new finance target called the New Collective Quantified Goal, or NCQG, for tackling climate change. The goal will replace a goal initially agreed in 2009, when developed nations pledged to provide $100 billion annually in climate financing for developing countries.  (Here’s a quick refresher on COP from the Chartered Accountants Ireland website). X marks the spot in the draft of the agreement Negotiations on the first draft agreement on climate finance have failed to produce a document acceptable to all parties. It was immediately deemed inadequate by EU negotiators, with EU Climate Commissioner Wopke Hoekstra stating “As for the text overall, I'm not going to sugarcoat it - it is clearly unacceptable as it stands now”. The 10-page draft of an agreement on a ‘new collective quantified goal’ (NCQG) did not contain even a range of values for the headline goal, recognising that developing countries need a commitment of at least “USD [X] trillion” per year. This mystery figure – and who will pay it – are among the sticking points at COP this year, which can be summarized as follows: How much money? The amount of finance needed by developing countries to fight climate change has been the subject of much debate. Rich nations have pledged $100 billion a year. Many developing countries say that $1.3 trillion a year is accurate. (For context, $2.4 trillion was spent on weapons in 2023, and at least $1 trillion on fossil fuel subsidies in 2022.)   Grants or loans? Developing countries are advocating for the money to be given in the form of grants from rich governments, and not loans which would add to the national debt of vulnerable countries. Speaking at the summit, Ireland’s Minister from Climate Eamon Ryan, described this as “a fundamental justice issue”, and stated that COP is about “changing the financial system so that fundamental injustice does not continue into the future.” (Minister Ryan has been asked by the UN and the Cop29 presidency to lead negotiations on adaptation).   Public or private? Developed countries want all sources of finance, including public money and private investment, to be counted toward the goal.   Which countries should pay? The definition being used at COP of a ‘developed’ country dates from 1992. Delegates from both developed and developing countries have described this definition as ‘obsolete’. They advocate for China and India in particular to no longer be treated as developing countries and to provide financial assistance to poorer countries. Other issues Fossil fuels At last year’s COP in Dubai, the final agreement contained a pledge to “transition away” from fossil fuels. It was the first time in the history of the climate negotiations that nearly 200 countries agreed to even mention fossil fuels in the agreement. Many commentators have expressed concern that this pledge is being neglected at this year’s COP in Baku, and the high number of representatives from fossil fuel companies, and the location for the conference itself, has drawn criticism from several sources: Azerbaijan’s total economy is heavily dependent on oil and gas, which account for about half of and more than 90% of its exports, and the Chief Executive of the international climate summit was secretly filmed promoting fossil fuel deal by an undercover climate organisation days before the conference was to get underway. Who was there – and who wasn’t Another issue of note this year was the absence of various world leaders (including Ireland’s), although US President Joe Biden did travel to the Amazon to launch the new Brazil Restoration & Bioeconomy Finance Coalition (BRB Finance Coalition), members of which include the World Bank Group and the World Economic Forum. Europe’s official COP29 delegation was led by Lídia Pereira, with European Commissioner for Climate Action Wopke Hoekstra convening a press conference with representatives of ‘like-minded ambitious countries’ to underscore their commitment to delivering Nationally Determined Contributions (NDCs) that are aligned with a 1.5°C trajectory. Ireland’s national statement to the summit was delivered by Minister for Climate Eamon Ryan, who highlighted the importance of a successful conclusion to the talks: “Giving up would be unforgiveable, but success can help restore belief in multilateralism and restore confidence.” Another Irish commentator at COP29 was the Chair of the Elders and former President of Ireland Mary Robinson. Mrs Robinson drew attention to the discrimination and inequality that climate change causes globally to women and children and was critical of what she described as attempts by the Vatican, Russia and Saudi Arabia to blocking progress on a gender-related climate action plan.   The Global Carbon Market Another important highlight of this COP was the endorsement of a global carbon market framework under Article 6 of the Paris Agreement. Under Article 6 countries are able to transfer carbon credits earned from the reduction of greenhouse gas emissions to help one or more countries meet their climate targets. Although the COP29 presidency welcomed this ratification of the last part of the Paris Agreement as an ‘early win’,  other commentators fear that there are still unresolved fundamental and technical issues. Separately, the Integrity Council for the Voluntary Carbon Market has approved three methodologies for generating high-integrity carbon credits aimed at reducing emissions from deforestation and forest degradation in developing countries (‘REDD+’). The multi-stakeholder-led independent not-for-profit organisation was set up in 2021 in response to the final recommendations of the Taskforce on Scaling the Voluntary Carbon Markets (TSVCM).   Read more Fight over cash at climate summit as time runs out at COP29 (BBC) COP29 climate talks enter final phase: What happens next? (RTÉ News) UAE urges countries to honour fossil fuels vow amid Cop29 impasse (The Guardian) COP29: The selfish case for climate finance - New academic paper argues climate-focused grant finance is in rich countries’ economic interest (Financial Times) – Premium G20 helps lift mood at Cop29 climate talks (Irish Times)

Chartered Accountants Ireland has today launched its new guide to Foreign Direct Investment (FDI) in Ireland at an event in conjunction with IDA Ireland in Dublin.  Over 100 attendees gathered in Chartered Accountants House to hear from a panel of: Cróna Clohisey, Director of Public Affairs Chartered Accountants Ireland Feargal O'Rourke, Chair, IDA Ireland Barry Doyle, President Chartered Accountants Ireland Ireland faces greater competition as a location for global FDI than ever before as we move into 2025, with other countries enhancing their offering at pace. While Ireland’s FDI policy has stood the country in good stead for decades, a slowdown in growth of the global economy coupled with accelerated industrial policy interventions by competitor countries means Ireland’s inward investment model is now at a crucial inflection point. Commenting at the event, Cróna Clohisey, Director Public Affairs, Chartered Accountants Ireland said “Ireland’s record of attracting FDI has been the envy of other countries for decades and IDA Ireland has played a pivotal role. However, against a backdrop of heightened geopolitical uncertainty and intensifying global competition for inward investment, we cannot afford to be complacent about our offering. The significant deficits in the State’s crucial infrastructure, including housing, energy, water, childcare and nationwide public transport, need to be addressed with urgency if we are to remain fully competitive in the race for future FDI.” Barry Doyle, President, Chartered Accountants Ireland said “We are all familiar with the advantages that Ireland holds in attracting FDI - EU membership, strategic location, young talented workforce and a stable business environment. Our members also represent a key competitive advantage, with Chartered Accountants playing a central role in supporting FDI the length and breadth of the country. “Competition has never been greater for the flow of FDI around the world, and with a new US administration taking office in a matter of weeks, there is an increased chance of disruption to the traditional flow of FDI globally. However, investors with a long term, sustainable outlook will look beyond short-term protectionism. Ireland as a safe and stable environment will continue to benefit greatly from FDI and we as Chartered Accountants will be there to lead and support such investments.”

Increased global competition one of several challenges to FDI model Addressing infrastructural deficit critical to ensuring continued FDI growth Chartered Accountants Ireland launches FDI guide, highlighting critical role its members play in supporting investment   Ireland faces greater competition as a location for global Foreign Direct Investment (FDI) than ever before as we move into 2025, with other countries enhancing their offering at pace. While Ireland’s FDI policy has stood the country in good stead for decades, a slowdown in growth of the global economy coupled with accelerated industrial policy interventions by competitor countries means Ireland’s inward investment model is now at a crucial inflection point, according to Chartered Accountants Ireland.  The Institute, the largest professional body on the island of Ireland, representing over 38,400 members, has today launched its new guide to FDI in Ireland at an event in conjunction with IDA Ireland in Dublin.   Cróna Clohisey, Director Public Affairs, Chartered Accountants Ireland said  “Ireland’s record of attracting FDI has been the envy of other countries for decades and IDA Ireland has played a pivotal role. However, against a backdrop of heightened geopolitical uncertainty and intensifying global competition for inward investment, we cannot afford to be complacent about our offering. The significant deficits in the State’s crucial infrastructure, including housing, energy, water, childcare and nationwide public transport, need to be addressed with urgency if we are to remain fully competitive in the race for future FDI.” Barry Doyle, President, Chartered Accountants Ireland said  “We are all familiar with the advantages that Ireland holds in attracting FDI - EU membership, strategic location, young talented workforce and a stable business environment. Our members also represent a key competitive advantage, with Chartered Accountants playing a central role in supporting FDI the length and breadth of the country. “Competition has never been greater for the flow of FDI around the world, and with a new US administration taking office in a matter of weeks, there is an increased chance of disruption to the traditional flow of FDI globally. However, investors with a long term, sustainable outlook will look beyond short-term protectionism. Ireland as a safe and stable environment will continue to benefit greatly from FDI and we as Chartered Accountants will be there to lead and support such investments.”