The UK is seeking to enshrine mandatory climate disclosures for its largest companies in law, making it the first G20 country to do so.  New legislation will require over 1,300 UK-registered companies and financial institutions to disclose their climate-related risks and opportunities in line with the Taskforce on Climate related Financial Disclosures (TCFD) recommendations from April 2022 (subject to Parliamentary approval).   Companies mandated to do so will include many of the UK’s largest traded companies, banks and insurers, as well as private companies with over 500 employees and £500 million in turnover. This announcement follows the publication of the UK's Net Zero Strategy and forms part of the UK government's commitment to "making the UK financial system the greenest in the world." During the announcement, Energy and Climate Change Minister Greg Hands said: "If the UK is to meet our ambitious net-zero commitments by 2050, we need our thriving financial system, including our largest businesses and investors, to put climate change at the heart of their activities and decision making. By mandating large businesses to disclose their climate risks and opportunities – the first G20 country to do so – we are showing global leadership by making our financial system the greenest in the world." Read more.

The Greenify Home Improvement Loan product to facilitate the retrofit of homes to improve energy efficiency has been launched by a group of eight Credit Unions in Ireland.  The Credit Unions, under the umbrella of Collaborative Finance CLG, will offer unsecured loans of up to €50,000 at 6.75 percent APR with a loan term of up to seven years (subject to certain qualifying conditions).  The loans are an effort to support the Government target set out in its Climate Action Plan to target the upgrading of 500,000 homes to a Building Energy Rating (BER) of B2 by 2030. The loan can be used, among other things, to upgrade heating systems, install insulation, install solar panels and upgrade doors and windows.  The Minister of State for Finance, Seán Fleming TD welcomed the launch of the new loan product in an effort to achieve this goals.  Reacting to the launch, the Minister said “The Government’s Climate Action Plan has set a target of upgrading 500,000 homes to a Building Energy Rating of B2 by 2030 and these targets represent a very significant increase in both the volume and depth of retrofit activity in Ireland. This initiative is therefore a positive step in supporting the achievement of these targets and can serve as a model of what can be achieved by credit unions when they work together.” Participating Credit Unions are in Mitchelstown, Bantry, Birr, Borrisokane, Ennistymon, Mullingar, St Jarlath's Tuam and Tullamore. Interested readers are encouraged to contact their local Credit Union directly to find out more and also visit greenify.ie. 

Originally posted on Business Post 10 October 2021.   Our circumstances today share numerous parallels with 1991, when Albert Reynolds delivered the first ever televised budget speech Corporation tax receipts up by an unexpected 40 per cent, inflationary pressures driving a bigger social welfare package, a two-tier corporation tax system, and disputes over pension payments. No, not 2021, but 1991, when the late Albert Reynolds delivered his budget speech, televised for the first time. This Tuesday will be the same. There will be an economic update and forecast along the lines of “not too bad, but could be better”, a helpful reminder of the wonders achieved by the government in the previous 12 months, and some tinkering with tax bands and reliefs along with some social welfare enhancements and spending commitments. Is the budget day equilibrium established by Reynolds 30 years ago still appropriate for a nation which has more than twice as many people employed as in 1991, more than two million extra citizens, and eight times the tax receipts? When it comes to tax policy, neither the Irish economy nor the Irish voter is particularly amenable to any type of radical change. Big initiatives fail. The universal social charge, for example, is little more than a way of squeezing more income tax from a system constrained by having only two tax rates, 20 per cent and 40 per cent. The guiding principle behind local property tax, meanwhile, seems to be that it should not raise too much money. Water charges, a tax in every respect other than their name, failed to get off the ground at all, while we still tinker with stamp duty rates in the hope they might have some impact on the behaviour of our property market. This is a triumph of optimism over experience. Since the Reynolds era, however, our control over interest rates and exchange rates has been surrendered to the EU. Last week, we conceded partial control over a third lever of economic policy, the setting of tax rates. To its credit, the government seems to have ensured that this concession on corporation tax was not made lightly. It would have been simpler for Paschal Donohoe to go along with the 130 or so countries which had already signed up to the OECD twin track proposals to tax the very biggest companies where they make their sales, and to tax the top tier of industry at a rate of at least 15 per cent. The 12.5 per cent rate had acquired totemic status here as an element of economic policy, but Ireland is not alone in having to abandon its totems. The European Commission surely had to take a deep breath when it signalled it would permit our application for a lower rate for smaller companies under the new plan. A twin-track tax system runs counter to EU states aid principles – favouring companies falling within a particular category over others was the reason we had to abandon the old, reduced rates of corporation tax in the 1990s. The allegation that Ireland offered preferential treatments is the rationale behind Margarethe Vestager’s pursuit of the Apple “tax as state aid” case. The commission should now do the decent thing and drop the appeal. The acceptance of the headline points in the OECD plan is one matter; how they are to be implemented is quite another. The European Commission will transpose key elements of the agreed position at OECD level into a directive for adoption by the EU member countries. Other aspects will be achieved through international treaties. That is a lot of ground to cover. Ireland’s active participation in these negotiations will be crucial, but Ireland will not be the only country with concerns. Estonia, another EU member, only signed up this week too. None of the changes announced on Thursday will have an impact on exchequer receipts any time soon. By pushing the corporation tax crisis out of the way for now, Tuesday’s budget can be formulated along more traditional lines. Though the shadow of the pandemic still looms across society and the economy, don't expect too much radical thinking. Rather than addressing the fundamental question of whether people are paid enough in this country, expect to see some tinkering with the tax bands. Rather than seeing pension funding being put on a model which reflects the nation's demographics, expect to see further tinkering with retirement ages and the benefits package. Ireland doesn't do alarms or surprises on Budget Day. With the prospect of a two-tier tax system for companies, the Reynolds equilibrium is being fully restored. Dr Brian Keegan is Director of Public Policy at Chartered Accountants Ireland

This week, the CCAC presented proposed carbon budgets to the government setting out the limits on greenhouse gas emissions for 5-year periods of time. The first carbon budget programme will comprise carbon budgets for the following periods: 2021-2025; 2026-2030 and 2031-2035, with the carbon budget for 2031-2035 being provisional. The average year-on-year reductions in the first budget which runs until the end of 2025 has been set at just under 4.8 per cent, while the average year-on-year reductions in the second budget to 2030 is set at 8.3 per cent. A limit of 295 million tonnes of CO2 equivalent has been set on emissions for 2021-2025 and a 200 million tonnes CO2 limit for 2026-2030 relative to a 2018 baseline. The carbon budget for 2031-2035, which is provisional, is recommended at 151 million tonnes CO2. The budgets are part of a roadmap of actions legislated for under the Climate Action and Low Carbon Development (Amendment) Act 2021. The Act commits Ireland to reach a legally-binding target of net-zero emissions no later than 2050, and a cut of 51 percent by 2030 (compared to 2018 levels). Commenting on the programme, Marie Donnelly, Chair of the CCAC said: “The proposed carbon budgets will have an impact on society and the economy but allow us to act on climate change in a planned and organised way. The budget is based on the best available science and defines an appropriate and necessary path to addressing the climate challenge. Many of the changes required now will only have a real impact on emissions in the second period. Now is the time to put policies and supports in place that will help those people, communities and businesses that will be impacted by the significant changes we need to make to how we live, work and travel.” Noting the requirement for everyone in society to play their part, Ms Donnelly said “the carbon budgets provide a framework, but what is urgently required is transformative change which is led by all of Government on a sustained basis, supported by all sectors of the economy, and all members of society. This will require significant investment across the economy.” The proposed carbon budgets will go to Government and then to the Oireachtas. The Oireachtas will review and approve the budgets within a 4-month period. Once these overall, economy-wide carbon budgets are approved, the Government will have the challenge of dividing the overall carbon budgets into sectoral emissions ceilings. A sectoral emissions ceiling is the maximum amount of greenhouse gas emissions that are permitted in a sector of the economy during each 5-year carbon budget. The Minister for the Environment, Climate and Communications, in consultation with other relevant Ministers, will develop a sectoral emissions ceiling for each relevant sector within each 5-year budget, once the overall carbon budget has been adopted. The Environmental Protection Agency (EPA) and the CCAC will produce annual reports to inform monitoring of compliance with national and sectoral progress towards each carbon budget and sectoral emissions ceiling. More information can be found at this link.

UK Chancellor, Rishi Sunak announced the UK government’s Autumn Budget and Spending Review 2021 this week, in which he pledged a major increase in public spending of £150 billion by 2024-25 including significant spending to boost the drive towards net zero.  The drive to net zero The following are among the measures announced across the UK: £3.9 billion to decarbonise buildings, including £1.8 billion to support low-income households to make the transition to net zero while reducing their energy bills. £6.1 billion to boost the number of zero emission vehicles, help to develop greener planes and ships, and encourage more trips by bus, bicycle, and foot. £380 million for the UK’s offshore wind sector including investment in offshore wind ports in Teesside and the Humber Funding for the £1 billion Net Zero Innovation Portfolio which is accelerating near-to-market low-carbon technology innovations £385 million to develop the next generation of small and advanced modular reactor technologies. A further £625 million for the Nature for Climate Fund, ensuring total spend of more than £750 million by 2024-25 to help meet the commitment to plant at least 7,500 hectares of trees every year in England by 2025 and restore 35,000 hectares of peatland. Read the Budgetary documents as well as a summary of measures announced.

The EU’s recently published State of the Energy Union report shows that renewables overtook fossil fuels as the number one power source in the EU for the first time in 2020, generating 38 percent of electricity, compared to 37 percent for fossil fuels. The report analyses how energy and climate policies have been impacted by the COVID-19 pandemic in the past year, and it presents the substantial legislative progress in pursuing the EU's decarbonisation efforts. To date, nine EU Member States have already phased out coal, 13 others have committed to a phase-out date, and four are considering possible timelines. Compared to 2019, EU27 greenhouse gas emissions in 2020 fell by almost 10 percent, mainly due to the COVID-19 pandemic, which brought overall emission reductions to 31 percent, compared to 1990. Read the report.