Gender Pay Gap legislation is signed into law; the Pensions Authority publishes a draft code of practice for trustees of occupational pension schemes and trust RACs; a report shows that the accounting and business sector form the largest portion of new start-ups in 2021; and the private sector in Northern Ireland experiences its fastest growth in seven years. Gender Pay Gap legislation signed into law Legislation requiring businesses to report on pay and bonus differences between male and female employees was signed into law last week by President Michael D Higgins. Under the Gender Pay Gap Information Bill, which was originally published in April 2019, organisations with 250 or more employees will have to publish certain details of pay and bonuses for men and women, including: The mean and median gap in hourly pay between men and women The mean and median gap in bonus pay between men and women The mean and median gap in hourly pay of part-time male and female employees The percentage of men and of women who received bonus pay The percentage of men and of women who received benefits in kind. The legislation also requires publication of the reasons, in the employer’s opinion, for any gaps and also the measures (if any) that the employer is taking or proposes to take to eliminate or reduce them. Employers with fewer than 250 employees will have until the second anniversary of the making of the first regulations to publish details, while employers having 150 employees have until the third anniversary. There will be no requirement for employers having fewer than 50 employees to publish details. Roderic O’Gorman T.D, Minister for Children, Equality, Disability, Integration and Youth welcomed the Bill saying: “With the passage of the Gender Pay Gap Information Bill, pay transparency is now one step closer. Reporting of the gender pay gap by employers will provide accountability and transparency, helping to ensure that employers address the gender pay disparity between men and women. The passing of this strengthened legislation is testament to this Government’s commitment to gender equality, and I am determined to continue making progress on this”. Read the Bill. Pensions Authority publishes draft code of practice for trustees of occupational pension schemes and trust RACs The Pensions Authority has published a draft code of practice for trustees of occupational pension schemes and trust RACs which sets out what the Authority expects from regulated entities to meet their obligations under the European Union (Occupational Pension Schemes) Regulations 2021 (the Regulations). The Authority welcomes views on the draft code of practice, and the closing date for the receipt of submissions is 5pm Thursday 16 September 2021. The final code of practice will be published in the week commencing 15 November 2021. In addition, the Authority will issue information for new one-member arrangements on the Regulations, and information on the annual compliance statement provided for under the Regulations during the week of 30 August 2021. Guidance for the public and employers about the minimum standards they should expect from master trust vehicles will be published the week of 13 December 2021. Irish SMEs to avail of a €2,000 voucher to cover energy audit The Sustainable Energy Authority of Ireland (SEAI) is encouraging Irish SMEs to take control of their energy use with the launch of a new support scheme, the Support Scheme for Energy Audits. The scheme will provide SMEs with a €2,000 voucher to cover the cost of an energy audit, which identifies tailored energy saving opportunities that can save businesses up to 30 percent on their energy bills and help to reduce their climate impact. The audit will also assess whether renewable energy technologies are a viable option for their business. More details can be found here. Accounting and business sector largest portion of 2021’s new start-ups A new study by risk analyst firm CRIFVision-net reportedly shows that of the almost 14,000 new companies registered in Ireland in the first half of 2021 (an increase of 42 percent on the same period in 2020) the legal, accounting and business sector accounted for the largest portion, with a total of a total of 2,543 new companies registering. This is an increase of 19 percent when compared to 2020. However, Christine Cullen, Managing Director of CRIFVision-net, in a statement said the figures show that many businesses are struggling and will continue to struggle for the foreseeable future, with the impact the pandemic visible in rising insolvencies (up 45 percent) in the first half of the year: "These insolvencies are likely to increase, particularly in hospitality sector, as Government supports are rolled back and credit lines dry-up”. NI private sector experiences fastest sector growth in seven years Northern Ireland has seen its fastest pace of growth across the private sector in almost seven years, according to according to the latest Ulster Bank purchasing managers’ survey for June. The report shows: A new 7-year high in the rate of new orders (58.7) A record rise in the rate of input costs (87.5) led by construction (97.5) A record rise in firms’ prices (70.9) led by construction (85.1) A record increase in backlogs (58.8) A slow in employment growth from joint record high (53.7) A reading of above 50.0 signals an increase on the previous month, while below 50.0 signals a decrease. According to an article in the Financial Times, PwC, Deloitte and KPMG have already announced plans to create 2,200 jobs over the next five years which will further boost Northern Ireland’s 43,000-strong professional and financial services sector. PwC has now opened its Merchant Square office in Belfast and Jackie Henry, Deloitte’s lead partner for Northern Ireland points to the popularity of Belfast with staff: “We have one of the youngest populations across Europe here. It’s a brilliant starting point.” Henry, whose firm already has 1,000 people in Belfast and plans to double that by 2025 as it invests in areas including data analytics, cloud, robotics and cyber security, chairs the regional government’s skills advisory working group. However, Richard Ramsey, chief economist Northern Ireland, Ulster Bank, reportedly stated that it was also the worst quarter for inflationary pressures in the PMI survey’s history. “Rising demand coupled with ongoing supply chain disruption led firms to increase their backlogs of work at the fastest pace in the survey’s 19-year history”. Ramsey further stated this it is likely that supply chain disruption and significant inflationary pressures will be a feature of the business environment “for the rest of the year and well into 2022”.  You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our Sustainability Centre.   Read all our updates on our Public Policy web centre  

  The Institute has written to Tánaiste Leo Varadkar this week asking his Department to consider applying the current tax relief system to auto-enrolment and also to consider the timeline for auto-enrolment’s introduction.

  Achieving net zero emissions in an organization will rely on the knowledge, skills and processes inherent within the finance function. Where an organization has made a net zero commitment, finance professionals are well placed to develop pathways to achieve net zero, setting interim targets, allocating funds, reporting progress and integrating net zero into decision making processes over time. To help CFOs and finance teams understand their role in supporting their organization implement and ultimately achieve their net zero commitment, the Prince’s Accounting for Sustainability Project (A4S) has: Produced two practical guides for finance teams (cross sector and bank specific), as well as supporting case studies from both banking and real economy organizations Secured a large number of signatories to a CFO Statement of Support for Net Zero Run events on the role of the finance function in supporting net zero implementation HRH The Prince of Wales has delivered a video message to finance professional urging them to do their part in achieving net zero ambitions “CFOs and their finance teams are essential to achieving net zero emissions. Through the A4S Net Zero Statement of Support, CFOs from around the world are committing to playing their role in the transition, and A4S is supporting them through our practical guidance.” Jessica Fries, Executive Chairman, A4S “Climate change is one of the biggest challenges of our generation and financial services has a big role to play in helping to tackle it. We will only reach net zero emissions if we work together and I hope the guidance from A4S can inspire finance teams to play their part to help us reach this global ambition.” Katie Murray, CFO, NatWest  

  This week Tánaiste Leo Varadkar launched a campaign to make remote and home working a bigger part of working life; the Central Bank published its Quarterly Bulletin forecasting a rebound in domestic economic activity; a research report found that Northern Ireland SMEs have a positive attitude towards environmental protection; and a flash estimate by Eurostat pointed to inflation of 1.9 percent in June 2021, down from 2 percent in May 2021. Tánaiste launches a MakingRemoteWork campaign Further to the Irish Government’s call for research last week into the social, economic and environmental implications of a four-day working week, Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar TD, has launched a new #MakingRemoteWork campaign, calling on employers and employees to make remote and home working a much bigger part of working life after COVID-19. The campaign aims to raise awareness of advice and information available from the Irish Government to help workers and employers facilitate more remote and blended working. Details can be found on a dedicated website - gov.ie/remote, which includes government guidance, a remote work checklist for employers, and links to training and further supports. The announcement comes during the same week as the EU proposes a new occupational safety and health strategy framework - the EU strategic framework on health and safety at work, 2021-2027. This framework sets out the EU’s new objectives for a post-pandemic world of work, particularly changes brought about by the green, digital and demographic transitions. It further aims to improve the prevention of workplace accidents and illnesses and better prepare for any potential future health crises. The Commission also calls on Member States to update their national occupational safety and health strategies to ensure that the new measures reach the workplace. This Institute responded to the recent public consultation on the Right to Request Remote Work in Ireland.  Read our response. Central Bank’s Q3 Bulletin forecasts a rebound in domestic activity The Central Bank has published its Quarterly Bulletin for Q3 in which it forecasts a rebounding in domestic economic activity with the relaxation of COVID-19 restrictions. Citing the progress of the vaccination programme, more positive consumer and business sentiment, and supportive fiscal and monetary policy as factors giving rise to a more favourable outlook than at the time of the Q2 Bulletin, it also anticipates “relatively robust growth” through to 2023 in modified domestic demand (4.8 percent in 2023) and employment (6.6 percent unemployment in 2023). However, the bulletin pointed out that a strong rebound in overall demand following an easing of restrictions in many countries could lead to supply shortages and bottlenecks arising in the short term, contributing to the forecast of higher inflation (1.7 percent in 2023 in Ireland against the Euro Area average of 1.4 percent). Positive attitude towards environmental protection among Northern Ireland SMEs This week saw the publication of the results of research into how Northern Ireland Small and Medium Sized Enterprises (SMEs) have responded to environmental issues during the COVID-19 pandemic.  The research, which was completed by Queen’s University Belfast Management School and the UK Enterprise Research Centre (ERC), analysed data from a major survey of UK SMEs carried out during Autumn 2020 which sought out to understand the experiences of SMEs over the previous 12 months. The premise, as outlined in the report, was that “ensuring the commitment of SMEs to meeting environmental targets means that it is important to understand their attitude, current practices, as well as the barriers to the planning and implementation of practices fostering environmental protection.” The research found that Northern Ireland SMEs have a positive attitude towards environmental protection with more than one-third of always considering environmental aspects in their business decision-making process. More than 80 percent reportedly confirmed that they at least consider it sometimes and more than half agreed that businesses should prioritise the environment above profitability and growth. The data also indicated a marked improvement in SMEs’ management of environmental issues, and that that internal factors, such as reducing cost or improving the enterprise’s reputation, had stronger effects on SMEs’ commitment to environmental protection than external factors, such as government support or regulations. The report suggested, though, that government support and regulation would be likely to grow in influence for the SME sector in order to achieve Net Zero targets. The report further stated that policy effort should be directed towards supporting SMEs in coping with the challenges they face in their commitment towards environmental protection. The top three challenges were identified as the cost of meeting regulations or standards; the lack of information on low carbon technologies; and the uncertain demand for low-carbon products or services. The report also found that the two most effective practices in reducing SMEs’ carbon emissions were changing processes or transport/logistics and conducting training on environmental matters. Eurozone inflation estimates and employment figures publish A flash estimate by Eurostat, the EU’s statistics office, has shown that Euro area annual inflation is expected to be 1.9 percent in June 2021, down from 2 percent in May, with energy expected to have the highest annual rate (12.5 percent), followed by non-energy industrial goods (1.2 percent),  services (0.7 percent) and food, alcohol and tobacco (0.6 percent). For May 2021, the euro area seasonally-adjusted unemployment rate dropped from the April 2021 figure of 8.1 percent to 7.9 percent (this compares with a May 2020 unemployment rate of  6.9 percent). Joblessness in Europe reportedly surged in the spring of 2020 as restrictions on movement prevented travel in many countries across the globe. However, a long-term shock on employment was averted by the implementation by many national governments of EU-backed job guarantee schemes and other programmes. You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our Sustainability Centre.   Read all our updates on our Public Policy web centre

  This week the Irish Government announced its intention to research the environmental, social and economic impacts on the Irish economy of a four-day work week; the Environmental Protection Agency called for additional measures across all sectors to meet Ireland’s emissions-reduction targets; the UK financial regulator proposed further climate-related disclosure rules; and final approval was given to ‘the law of laws’, the European Climate Law.   Government to research impacts of a 4-day week The Irish Government announced this week that it intends to open a call for research into the social, economic and environmental implications of a four-day working week. This call will provide an opportunity to address the impacts of a shortened working week in the specific context of the Irish economy on, among other things, greenhouse gas emissions, competitiveness, staff productivity, gender inequality and job satisfaction. The two departments which intend to fund the research – the Department of the Environment, Climate and Communications and the Department of Enterprise, Trade and Employment ­– will formally open the call on 1 July 2021; it is anticipated that the call will remain open to proposals until 15 July 2021. Additional measures across all sectors needed, the EPA warns The Environmental Protection Agency (EPA) in its annual report, published this week, stated that estimates that suggest Ireland is unlikely to meet the reductions targets for greenhouse gas emissions that had been set for it under the 2013-2020 EU Effort Sharing Decision target. Ireland is estimated to have cumulatively exceeded its greenhouse gas emissions target by 12 million tonnes over the 2013-2020 period, despite the sharp fall in emissions last year due to the impact of COVID-19. The report states that Ireland will need to use carbon credits and possibly purchase surplus annual emission allocations from other EU Member States to achieve compliance with its EU climate obligations. The report further stated that Ireland can still meet its targets for 2021-2030. Achieving this will involve full implementation of the 2019 Climate Action Plan, as well as additional measures particularly as more ambitious targets have been presented by the European Climate Law (see below) and Ireland’s Climate Bill, published last week. FCA proposes further climate-related disclosure rules The UK financial regulator, the Financial Conduct Authority (FCA), has published new proposals to extend climate reporting requirements to most UK listed companies as well as to domestic asset managers. The proposed rules are designed to help make sure that the required information on climate-related risks and opportunities is available along the investment chain – from companies in the real economy, to financial services firms, to clients and consumers, in an attempt to meet growing investor demand for disclosure. The proposals follow the introduction of climate-related disclosure rules for the most prominent listed commercial companies in December 2020 which are aligned with the recommendations of the FSB Task Force on Climate-related Financial Disclosures (TCFD). Alongside these proposals, the FCA is also seeking views on other topical environmental, social and governance (ESG) issues in capital markets, including on green and sustainable debt markets and the increasingly prominent role of ESG data and rating providers. Final approval for European Climate Law Final approval has been given by the European Parliament this week for the European Climate Law. Parliament formally approved the law with 442 votes in favour, 203 against and 51 abstentions. The  bill, first proposed in March 2020, enshrines the bloc’s 2050 and 2030 climate goals in legislation. The EU was the first of the world’s three top polluters to do this (the other two are China and the US). After months of negotiation between Parliament, the Commission and the Council, a deal had been  reached in April 2021 on the climate law which put higher emissions-cutting targets at the heart of EU policymaking. The bill sets targets to reduce net EU emissions by 55 percent by 2030, from 1990 levels, and eliminate net emissions by 2050. It recognises the need to enhance the EU’s carbon sink and includes stronger provisions on adaptation. It also maintains the bloc’s 2050 climate neutrality goal at EU-level (rather than requiring each country to apply that deadline at home); and commits to a process for setting a 2040 climate target. Representatives from the EU's member countries will formally approve the law on 28 June 2021, with Parliament and the EU then signing the text – a formal step – before it becomes law. The description in April of the law by João Pedro Matos Fernandes, Portugal’s Minister of Environment and Climate Action as ‘the law of laws’ was echoed this week by Frans Timmermans, head of EU climate policy, stating “This is the law of laws, because it will discipline us in the years to come”. You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our Sustainability Centre.   Read all our updates on our Public Policy web centre

  The first Chartered Accountants Ireland Sustainability Conference took place this week (16 June). Partnering with sponsors Goodbody, the conference sought to answer the question ‘What does Sustainability Mean for Accountants?’ Attendees heard keynote addresses from Ireland’s Minister for the Environment, Climate and Communications and Minister for Transport Eamon Ryan; and Minister for Infrastructure in Northern Ireland, Nichola Mallon, who both outlined their respective government policies for the development of climate action plans. The conference had three sessions on Environment, Social and Governance or ‘ESG’. After a welcome by Susan Rossney, the Institute’s Sustainability Expert, Chief Executive Barry Dempsey described the many challenges for businesses coming out of the pandemic, with sustainability being firmly in the mix. More and more pressure is now coming to bear on businesses to measure and report on their environmental impact and accountants, from their vantage point, are well-placed to advise on how to address these challenges.  Barry stated that Chartered Accountants Ireland is committed to becoming the first carbon-neutral professional accountancy organisation in Ireland and is currently measuring its carbon footprint and aggressively reducing its carbon emissions to achieve that goal.     The first panel of the conference on Environment was moderated by Dr Cara Augustenborg, environmental scientist and presenter of the ‘Down To Earth' show and podcast on Newstalk FM.  John Barcroft, Director, The Environmental Edge, discussed how to measure greenhouse gas emissions and pointed to the increasing pressure from a whole range of stakeholders to do so to deliver a low-carbon economy. He also pointed to the importance of understanding which among the Scope 1, 2, and 3 categories are material to a company and advised people to focus on these. Only 3 or 4 of these categories could account for over 90 percent of your emissions. Rebecca Greene, Director and Energy and Sustainability Tax Leader with PwC Ireland, described how tax is now an instrument that can create socio-economic cohesion, environmental value creation and long-term prosperity. Rebecca described how at an investor- and company-level we are moving towards a situation where ESG issues are considered to have a substantial impact on long term shareholder value. The second session was on ‘Social’, the ‘S’ in ESG, and was a panel discussion on sustainability leadership, roles and skills for sustained success and future proofing your business or practice. The panel was moderated by Stephen Prendiville, EY Ireland’s Head of Sustainability. The speakers were Ken Bowles, CFO of Smurfit Kappa Group; Karin Lanigan, Head of Member Experience with Chartered Accountants Ireland; and Kevin MacAllister, Partner and Regional Market Leader, PWC Northern Ireland. The panel discussed how people are now making career decisions associated with how they feel organisations reflect their values, how there has been a shift in what is important to stakeholders from employees to investors, and how this has impacted on the role of the CFO. As Ken Bowles stated “it is now not credible for a CFO to sit in front of an investor and not be able to talk about ESG”. Michael Costello, Managing Partner with BDO Dublin moderated the final session of the conference, which was on Governance. Chartered Accountants Ireland’s Head of Ethics and Governance Níall Fitzgerald discussed governance from board to operation level, advising boards to identify where a business can make most impact, whether on the environment, on society, and then focus on that, aligning the business purpose with that impact, and embedding it into business’s strategy. Head of Investor Relations in Goodbody, Edel O'Reilly looked at the growing demands from investors and the wider stakeholder community and talked through what investors look for on boards today. Although these demands vary depending on the company’s stage of development as a company grows and evolves, Edel pointed out that it is key to ensure that corporate governance is appropriate for each stage. Edel described ESG as being all about the people; investors like to see the sustainability agenda driven from the top of an organisation and embedded throughout organisation, and that companies should be proactive in seeking out what banks, shareholders, etc, want from them as a company. Final speaker Laura Heuston, Cofounder of SustainabilityWorks, discussed sustainability reporting and urged members not to start at the reporting end when it comes to sustainability, but to start their journey with the strategy and work from there. She highlighted the shift from "non-financial reporting" as a term to "ESG reporting", symbolising its centrality in financial reporting today. In closing the conference, Susan Rossney pointed to the free resources available on the Institute’s online sustainability hub, including the guide to Sustainability for Accountants, as a good place to start for members beginning a sustainability journey. Institute Paul Henry closed the conference, pointing to Institute’s ongoing commitment to providing support and resources for members in helping them achieve their sustainability goals. You can see a recording of the event here. You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our Sustainability Centre.   Read all our updates on our Public Policy web centre