Following the announcement last week of further restrictions in response to the incidence and behaviour of COVID-19, the Department of Enterprise, Trade and Employment has published a revised version of the Work Safely Protocol (19 Nov). The updated guidance reflects these new restrictions and how they affect workplaces. Read the revised Work Safely Protocol.

Many trustees are planning to ensure that their occupational pension schemes will fully comply with IORP II regulations by the end of 2022. Munro O’Dywer explains how companies, as sponsors, should use the remainder of 2021 to strategically assess their existing pension value proposition and determine if they should consider a different approach. Pensions represent a significant component of the employee benefit value proposition. However, employees often do not see the actual value in their pension arrangements due to their inherent long-term nature. Those companies who can convey the value of their pension structures to their employees, both in the short- and longer-term, will drive increased loyalty. But what does value mean in the context of the pension scheme for the employee? This should not simply be viewed as the level of employer contributions being made. Adequate contributions are only a small part of the overall retirement planning jigsaw. Other aspects that should come into consideration include: scheme participation; investment options; investment performance; charges; member outcomes at retirement; member support to make optimal decisions; and the use of technology. The changing needs of employees Delivering a pension scheme that meets the needs of all five generations that exist in today’s workplace is by no means easy. Each generation has its own set of preferences. In addition, many will have different pension makeups (e.g. defined benefit only; a mix of defined benefit and defined contribution; and defined contribution only). Defined contribution pension schemes are becoming the norm. There is a greater focus on the adequacy of retirement savings and broader financial wellness. Employees can also have multiple pension sources, potentially across different countries. This creates added personal portability and taxation challenges. Furthermore, how employees expect to be supported on their retirement savings journey varies. There are different preferences around communication channels and the level of support (self-guided, group, or one-to-one). Achieving the right mix of pension components – structure, contributions, employee support and communications etc. – to maximise their effectiveness for all employees is more critical than ever. The market evolution In the same way generational needs and preferences differ, the pension providers, their propositions and the regulatory and taxation environment in which they operate continue to evolve. Operational changes, technology enhancements, investment thinking, and member engagement innovations are only some of the areas providers continue to adapt to, each of which has a knock-on impact on costs. For companies, it is essential to benchmark existing structures relative to the broader market. This will likely become a feature of the new regulatory regime, as outlined in the draft Code of Practice. The impact of the new regulatory regime The past ways of governing and managing trust-based pension schemes are expected to change under IORP II regulations. There will be a greater focus on risk management, value for members, and the ongoing monitoring of outsourced arrangements. As well as the culture and the ability of the trustees to look after member interests, risk, time and cost will increase when it comes to operating a single trust-based pension scheme. Many pension schemes can spend a disproportionate amount of time on regulatory compliance. This can come at the expense of those aspects that are likely to be valued higher by employees. This imbalance has the potential to be heightened by the new regulations. Areas include the adequacy of contributions, achieving strong investment returns, and making the right decisions at the right times before, at, and after retirement. What employers should consider before 2022 Companies have until the end of 2022 to be compliant with the new regulations. 2022 will be a year of pension changes. Companies need to ensure that their changes in 2022 are well considered in the context of the broader pension value proposition and look to enhance, rather than diminish, it. An effective way for companies to use the remainder of 2021 is as follows: Document your existing pension value proposition for employees (benefits/costs) Companies should document all benefits that employees receive from the pension scheme (e.g. employer contribution, tax relief, strong governance, investment options, help and support etc.) and the associated costs. Understand your employee needs and how these will evolve The next stage is to consider your employees and their particular needs. This will help companies understand if the employees’ views on what is valuable to them about their pension scheme are consistent with the benefits/costs documented and, if not, where the gaps lie. Consider the impact of the new regulatory regime IORP II regulations will mean more time and cost spent on regulatory compliance. This could affect the employee pension value proposition, where the elements most valued are neglected due to regulatory pressures. Consider how the existing proposition can be adapted or modified Companies should explore alternative pension structures (e.g. consolidation of pension schemes or master trusts), which will help mitigate the regulatory impact but where the employee pension value proposition remains intact or is indeed enhanced. Munro O’Dwyer is Pension Partner at PwC.

  Negotiations continued into Week 2 of COP26, with each day focusing on a theme, variously gender, science and innovation, transport, and cities. Several major commitments were made also, as well work ongoing on the overall final agreement that needs to be signed of by nearly 200 countries aimed at driving action on climate change and delivering on the world's comprehensive climate treaty, the Paris Agreemen The following major commitments were made during week 2 of COP26 The US and China announced that they would work together to try and keep warming limited to 1.5C. An alliance of countries was established committed to phasing out production of oil and gas and pushing for an international agreement on setting an end date for the exploration and extraction of the fossil fuels. Beyond Oil and Gas Alliance (BOGA), which launched at COP on Thursday, November 11, is a landmark international agreement led by Denmark and Costa Rica, and also includes France and Wales but not the UK. Cities, Regions and Built Environment The UK pledged £27.5 million of funding for a new Urban Climate Action Programme to support cities across Africa, Asia and Latin America implement innovative climate action plans to become carbon neutral by 2050. Transport 32 countries, including Ireland and the UK, and many manufacturers, agreed to prohibit the sale of new petrol and diesel cars by 2040 at the latest. The declaration commits those signing to work toward all new cars and van sales "being zero emission by 2040 or earlier, or by no later than 2035 in leading markets." Gender-related The UK is setting out how £165 million in funding will address the dual challenges of gender inequality and climate change. The USA is committing new funding for gender-responsive climate programming. The launch of Gender Equity Diversity Investments, a $100-150 million venture capital firm. Health 47 countries have committed to building health systems which are able to withstand the impacts of climate change and which are low carbon and sustainable. Adaptation New climate providers have committed to balance through the Champions Group on Adaptation finance. The UK announced £290 million in new funding for adaptation. 88 countries are now covered by Adaptation Communications or National Adaptation Plans to increase preparedness to climate risks, with 38 published in the last year. Education The UK announced its draft Sustainability and Climate Change strategy to equip and empower young people with the skills they need to drive the future of climate action. Education Ministers from around the world also pledged to do the same and many also put forward national climate education pledges, ranging from decarbonising the school sector to developing school resources. Land use 26 nations set out new commitments to change their agricultural policies to become more sustainable and less polluting, the World Bank committed to spending $25 billion in climate finance annually to 2025 through its Climate Action Plan, and almost 100 high-profile companies from a range of sectors committed to becoming ‘Nature Positive’.

  In a week where Ireland was been ranked as “low performing” in addressing the climate crisis by the 2021 Climate Change Performance Index (CCPI), Ireland’s Minister for the Environment, Climate and Communications, Eamon Ryan T.D. led the National Climate Delegation at COP26 in Glasgow where the following developments were announced: Ireland will scale up its support of the Adaptation Fund (see below) used to help the most vulnerable to adapt to climate change. An event on Tuesday hosted by the Government and EirGrid, highlighted the importance of engagement between Government, the energy sector and civil society in transition efforts to clean energy. At the event, EirGrid Chief Executive, Mark Foley and Minister Ryan unveiled the Shaping Our Electricity Future roadmap, a blueprint for radically transforming the country’s electricity grid. Minister Ryan launched the National Dialogue on Climate Action (NDCA), where he announced €60 million in funding from the Climate Action Fund for community climate action projects, and a new long-term structure to support public engagement on climate action. The NDCA programme will be delivered through three main pillars: Improving climate literacy through communications and education Funding, supporting, and enabling active engagement in climate action at a local and national level, conducting public consultations, and empowering the public to adopt more sustainable behaviours Capturing insights from engagement activities and conducting social and behavioural research to inform the Climate Action Plan and climate policies Ireland joined other governments to launch the Beyond Oil & Gas Alliance (BOGA), a first-of-its-kind alliance of governments seeking to curtail new licensing and undertake other measures to phase out oil and gas production in line with the existing Paris Agreement. The Irish Government has also announced €2 million to the Climate and Clean Air Coalition, a global effort that unites governments, civil society and private sector, committed to improving air quality and protecting the climate in next few decades by reducing short-lived climate pollutants across sectors. The coalition aims at cutting short-lived pollutants including methane and to reduce air pollution. Other developments at COP26 today Today was Cities, Regions and Built Environment Day and the following announcements were made: The UK today pledged £27.5m of new funding for the new Urban Climate Action Programme (UCAP) to support cities targeting net zero. UCAP will help cities to implement projects like low-emission public transport systems, renewable energy generation, sustainable waste management, new climate-smart buildings codes and climate risk planning. By showcasing what is possible, city and regional authorities can demonstrate to other cities and national governments the opportunities available to drive action. The programme will be delivered in partnership with the C40 Cities Climate Leadership Group, a global network of cities focused on climate action, and GIZ, the German development agency.

Efforts towards decarbonisation in the transportation sector were the focus of the COP26 summit on Wednesday. The transport sector is the biggest consumer of fossil fuels in terms of energy consumption, with road transport accounting for 17 percent of global emissions. Because road transport emissions are rising faster than other sectors, banning the sale of petrol and diesel vehicles and increasing the use of electric cars were high on the agenda. Ban on sale of petrol and diesel cars 32 countries, including Ireland and the UK, agreed to commit to prohibit the sale of new petrol and diesel cars by 2040 at the latest but big car-producing countries such as the United States, Germany, France, and China failed to agree to the plan. On the industry side, Ford, Volvo, General Motors and Daimler, did agree to the plan however, other major carmakers such as Volkswagen, Renault, Stellantis, BMW and Nissan opted out. The declaration commits those signing to work toward all new cars and van sales "being zero emission by 2040 or earlier, or by no later than 2035 in leading markets." Carmakers have pledged that 100 percent of sales are zero emission by 2035 at the latest. Read the declaration.  Creation of zero-emission shipping routes Nineteen countries including the UK, Ireland, the United States and Australia have agreed to support the creation of zero-emission shipping routes. The aim of the parties to the Clydebank Declaration is to help with the establishment of "at least six green corridors by the middle of this decade". About 80 percent of global trade by volume is carried on ships, but there is growing concern about the sector's environmental impact. Establishing partnerships between ports, operators and others and changing the fuel supply are seen as ways to support zero-emission shipping routes.   The naming of the 'Clydebank Declaration' pays tribute to the heritage of the City of Glasgow and the River Clyde where the Declaration was signed. The Declaration sits within the Zero-Emission Shipping Mission and is designed to complement work at the International Maritime Organization to enable zero-emission shipping. Make Zero emission vehicles accessible 30 countries have agreed to work together to make zero emission vehicles the new normal by making them accessible, affordable, and sustainable in all regions by 2030 or sooner.  Draft COP26 deal is debated A draft deal for the COP26 climate talks was published this morning (Wednesday) calling on countries to submit new pledges to align their targets with limiting global warming to 1.5 degrees Celsius in 2022. The text stresses the urgency of 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. A three-day debate between the almost 200 countries represented in Glasgow has begun, before the conference is scheduled to end on Friday. There is no guarantee that the draft deal will pass and is likely to face stiff opposition. The draft deal "resolves to pursue efforts" to limit the temperature increase to 1.5 degrees, the lower limit set out in the Paris Agreement and calls upon Parties to accelerate the phasing-out of coal and subsidies for fossil fuels but provided no end-date. Other developments today: Ireland's Minister for Foreign Affairs Simon Coveney has announced Irish Aid funding of €2.1 million which will help address the impacts of climate change on Small Island Developing States and coastal communities. A new World Bank trust fund was launched that will mobilise $200 million over the next 10 years to decarbonise road transport in emerging markets and developing economies. The UK has pledged to shift to clean trucks by committing to end the sale of most new diesel trucks between 2035 and 2040. 

  Ireland has once again been ranked as “low performing” in addressing the climate crisis by the 2021 Climate Change Performance Index (CCPI). The CCPI analyses and compares climate actions and policies across 60 countries, as well as the EU as a whole, which account for 90 percent of global emissions. It is regarded as the most reliable indicator of countries’ response to climate disruption, and has been published annually since 2005. It also plays a leading role in setting out progress on implementing the Paris Agreement. Ireland ranks 46th in this year’s CCPI listings which were published at COP26. This represents a decline of 7 places from 2020, where Ireland ranked 39th. The UK, by comparison, was ranked 7th, down 2 places from 2020. No country did well enough to receive a "very high" rating, so as with previous years, the top three places in the index remain vacant. Even Denmark, the highest ranked country in CCPI 2022, did not perform well enough to achieve an overall very high rating. Saudi Arabia is the worst-performing country among the G20, ranked 63rd, followed only by Kazakhstan. In the greenhouse gas (GHG) emissions category, Ireland remains among the "very low" performers. Ireland also received a low rating in the national climate policy category, despite scaling up ambitions and adopting more demanding emission targets, encapsulated in the new Climate Act passed by the Government this year. While CCPI experts “acknowledge the progress being made with the new Climate Act and other positive commitments” it recognised that the new policies that have been developed have not yet been fully adopted and implemented. Ireland did receive a high rating in the renewable energy category – which relates mainly to using renewable energy in power generation – but only a medium rating in energy use, which relates to energy efficiency. Risks highlighted by the report include implementation of the Climate Act across Government, the risk of fossil gas lock-in from increasing demand due to projected data centre development, and the potential for lower action in the agriculture sector to result in increasing pressure on the rest of society. Among the recommendations of the report were: broad and systematic dialogue with all relevant stakeholders and communities climate action plans must align with the Paris Agreement so that Ireland reaches net-zero emissions before 2050 a phase-out plan for fossil fuel subsidies implementation and transition of Ireland’s climate goals across all relevant sectors increased engagement in initiatives (such as the Beyond Oil and Gas Alliance), climate finance, and for the country to follow an ambitious carbon target aligned with the Paris Agreement.