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In today’s Public Policy news, take a look at some of the European Commission’s recently published reports. You can read about the latest economic predictions as per the Summer 2020 Economic Forecast report, and Ireland’s performance in the newly released EU Single Market Scoreboard. Also, the European Commission has launched its first call for applications to apply for the new €1 billion investment package towards developing green projects, under the Innovation Fund.   “A deeper recession with wider divergence”, warns the latest European Economic Forecast Released earlier this week, the European Commission’s Summer 2020 Economic Forecast has forewarned that the EU economy will experience a deep recession this year due to the COVID-19 pandemic, despite the swift and comprehensive policy response at both EU and national levels.   How are the numbers looking for Ireland? As per the forecast, Ireland’s economy is set to shrink by 8.5 per cent in 2020 and is predicted to only rise up to 6.3 per cent in 2021. This compares with the Commission's Spring forecast of a downturn of 7.9 per cent for this year and a recovery of 6.1 per cent for next year.   What was the major impact on Ireland? The forecast has stated that economic activity in Ireland is expected to have plunged in the second quarter of the year due to the COVID-19 pandemic and its associated lockdown. Private consumption is set to be particularly hit due to the measures.   Is Brexit contributing to the predicted economic downturn in Ireland? Ireland’s economic outlook remains affected by specific uncertainty concerning the future relationship between the EU and the UK, potential changes in the international taxation environment and the activities of multinationals registered in Ireland.   Single Market Scoreboard 2020: Member States need to do more   What is the Single Market Scoreboard? The European Commission has launched the 2020 edition of the Single Market Scoreboard, which rates members of the European Economic Area (EEA) on how effectively the EU single market rules were applied. The Scoreboard is an online tool, which aims to monitor the performance of the Member States by using clear indicators, with the objective to improve the functioning of the Single Market. A well-functioning single market is crucial for ensuring the free movement of supplies across the EU and vital for the swift recovery of the EU economy, especially in a post-COVID era.   What does the Scoreboard evaluate? The Scoreboard evaluates how Member States have performed as regards to: Implementation of EU rules creating open and integrated markets (e.g. public procurement, trade in goods and services) handling administrative issues concerning foreign workers (e.g. professional qualifications) cooperate and contribute to a number of EU-wide governance tools How did Ireland perform on the Scoreboard? We have given below a summary of Ireland’s performance under key public policy areas:   Key public policy areas Ireland’s performance Single Market governance tools (transposition, infringements etc.) Above average Single Market Policy Areas (public procurement, professional qualifications) Average Integration and market openness (trade in goods and services) Average Note: Ireland has the fourth highest level of trade integration in the single market for services   What were the other key findings of the Scoreboard? Uneven enforcement of single market rules: while Member States significantly improved the transposition of EU legislation, the number of infringement procedures has grown, partly due to incompletely or incorrectly transposed EU legislation   Expanded administrative cooperation among Member States: The use of the Internal Market Information system (IMI), which supports Member States’ administrative cooperation in 16 policy and legal areas, has increased by 52 per cent.   Steady increase in use of tools helping citizens and businesses benefit from the single market: The number of citizens using Your Europe information portal and the Your Europe Advice services has drastically increased.   More work needed in specific policy areas: further improvements are needed to ensure the free movement of professionals, especially to ensure more decisions recognising professional qualifications. The public procurement performance of Member States continues to be uneven, in particular as regards contracts awarded to single bidders.   Commission launches first call for €1 billion investment in innovative green projects    On 3 July 2020, the European Commission launched the first call for proposals under the Innovation Fund.   Take a look at our explainer on the Innovation Fund, which describes the Innovation Fund in greater details, and includes links to apply.   The Innovation Fund is a programme provided by the EU to finance breakthrough technologies. It aims to create the right financial incentives for companies and public authorities to invest now in the next generation of low-carbon technologies and give EU companies a ‘first-mover advantage’ to become global technology leaders.   This first call contributes to the green recovery of the EU economy by helping businesses invest in clean energy and clean industry to boost economic growth, create local jobs and give a competitive advantage to EU industry.     Read all our updates on our Public Policy web centre.

This week, in Irish stories, take a look at Revenue’s new guidance outlining DAC 6 disclosure requirements. In UK developments, applications for the first self-employed support scheme grant close in three days’ time. In International news, the European Commission relaxes its State-aid rules to take account of COVID-19 disruption.      Ireland Take a look at Revenue’s new guidance outlining DAC 6 disclosure requirements The Tax Appeals Commission have postponed upcoming appeals hearings and inaugural Chairperson of Tax Appeals Commission is appointed. UK Applications for the first self-employed support scheme grant close in three days’ time Claims under the job retention scheme can now be deleted within 72 hours International Read about how State-aid rules have been relaxed for COVID-19, including the General Block Exemption Regulation which impacts Ireland’s EIIS, SCI and SURE incentives.  

Calls for proposals to the Government Just Transition Fund 2020 close at 4pm on the 17th of July 2020. The Just Transition Fund (JTF) is part of the Government of Ireland’s just transition plan for the Midlands region. It focuses on upskilling and employment projects in green enterprise. The funds’ objectives are to support sustainable upskilling and employment in green enterprise in the Midlands regions. The target audience for funding are private, public, and community and voluntary organisations and there is €11m funding available. To find an inforamtion booklet and guidance on eligibility and how to apply, visit gov.ie 

  What is the Innovation Fund? The Innovation Fund is a funding programme provided by the EU to finance breakthrough technologies. It one of the world’s largest funding programmes of its kind. It aims to create the right financial incentives for companies and public authorities to invest now in the next generation of low-carbon technologies, and give EU companies a first-mover advantage to become global technology leaders. The Fund focuses on: energy intensive-industries; carbon capture, use and storage; renewables; and energy storage  How is the fund financed? The Fund is financed by revenues from two areas: the auction of emission allowances from the EU's Emissions Trading System unspent revenues from the NER 300 programme, the predecessor to the Innovation Fund.  How much will be available?  Depending on the carbon price, the Innovation Fund may amount to €10 billion between 2020–2030.  What projects are eligible? The fund aims to finance a varied project pipeline to achieve an optimal balance of a wide range of innovative technologies in all eligible sectors (energy intensive industries, renewable energy, energy storage, CCS and CCU) and Member States. Projects need to be sufficiently mature in terms of planning, business model and financial and legal structure, but the Fund is also open to small-scale projects with total capital costs under €7.5 million which can benefit from simplified application and selection procedures. The Fund will also support cross-cutting projects on innovative low-carbon solutions that lead to emission reductions in multiple sectors, for example through industrial symbiosis. Can Innovation Fund grants can be combined with other funding? Innovation Fund grants can be combined with funding from other support programmes, including:   InnovFin Energy Demo Projects Connecting Europe Facility provides grants for the roll-out of key infrastructure Horizon 2020 and Horizon Europe InvestEU Programme provides debt and Just Transition Fund Enhanced European Innovation Council (EIC) pilot – grants and equity financing mainly targeted to SMEs or their consortia Private capital  The Innovation Fund grant is not considered to be State aid. To cover the remaining costs, a project applicant can combine the Innovation Fund grant with public support by a Member State. The amount of public support for a project will depend on the cumulation thresholds of the applicable State aid rules. Why is the Innovation Fund important?  The Innovative Fund will provide a boost to the green recovery by creating local future-proof jobs, paving the way to climate neutrality and reinforcing European technological leadership on a global scale. According to Executive Vice-President Frans Timmermans: “these large-scale investments will help restart the EU economy and create a green recovery that leads us to climate neutrality in 2050.” The Innovation Fund is a key funding instruments for delivering the EU’s economy-wide commitments under the Paris Agreement and its objective to be climate neutral Europe by 2050, as recognised also in the European Green Deal Investment Plan. How will the Innovation Fund help projects?  The Innovation Fund will improve the risk-sharing for projects by giving more funding in a more flexible way, through a simpler selection process.  This support will help new technologies to reach the market. The first call will provide grant funding of €1 billion to large-scale projects for clean technologies to help them overcome the risks linked to commercialisation and large-scale demonstration.  For promising projects which are not yet ready for market, a separate budget of €8 million is set aside for project development assistance. How is the fund implemented? The Innovation Fund will be implemented by the Executive Agency for Networks and Innovation (INEA), which will report regularly to the Commission and provide feedback on general orientations for further development of the Innovation Fund. The European Investment Bank will provide project development assistance to promising projects that are not ready for full application. The EIB will report regularly to the Commission. Member States also actively participate in the implementation of the Innovation Fund, and  are consulted on key decisions, including decisions to launch the call for proposals, maximum amount of the Innovation Fund support to be made available for the PDA, list of pre-selected projects for PDA support, and lists of pre-selected projects for the Innovation Fund grants, prior to the award of grants. How do projects apply? Projects can apply via the EU Funding and Tenders portal. For small-scale projects, the application process will have only one stage. For large-scale projects there are two stages of application: Expression of interest Projects are initially assessed on their effectiveness, innovation and maturity level.  (Where projects meet only the first two criteria, they may qualify for project development assistance.) Full application Projects are assessed on all the criteria, including scalability and cost efficiency. How are projects selected?  Projects will be selected based on: Effectiveness of greenhouse gas emissions avoidance Degree of innovation Project maturity Scalability Cost efficiency The detailed scoring and ranking methodology, as well as possible additional criteria for geographical and sectorial balance, are set in each call for proposals. For small-scale projects, the selection criteria can be simplified. Who/what can avail of the Innovation Fund? Projects in eligible sectors from all EU Member States, Iceland and Norway.  The funds can be used in cooperation with other public funding initiatives, such as State aid or other EU funding programmes.  What is the timeline? The first call for proposals for large-scale projects is open until 29 October 2020.  There will be regular calls for proposals in the lifetime of the Innovation Fund. Watch this short video for a quick introduction. 

A report by the leading source of development financing for Latin America and the Caribbean, the Inter-Amercian Development Bank (IADB) pointed to an increase in investors’ interest in investments that consider environmental, social, and governance factors (ESG investments) as investors seek investments that combine financial returns with societal benefits.  The report, entitled The Business Case for ESG Investing for Pension and Sovereign Wealth Funds was published in June 2020 and uses Chile’s sovereign wealth funds and pension funds as a case study. It provides evidence indicating that ESG investments can deliver better environmental, social, and governance performance without sacrificing financial returns. Given their large share of global assets and long-term investment horizon, as well as governments’ concerns for societal outcomes, ESG investments are particularly important for sovereign wealth funds and pension funds.   The report also points to a lack of standardisation in ESG data reporting by companies, which makes it difficult for investors to compare performances across companies or even between different years, and called for more work to be done on creating standardised, easy-to-understand ESG reporting methods, as well as more research into sustainable investing.  

A new report publised by the Center for Audit Quality (CAQ) report, The Role of Auditors in Company-Prepared ESG Information: Present and Future, highlights the key role of auditors in ESG information provision.  The report published by the US-based nonprofit public policy advocacy organisation builds on a report released in December 2019 by CAQ, 'The Role of Auditors in Company-Prepared Information: Present and Future'. This describe the role of auditors and how they are positioned to help fill existing gaps in enhancing the reliability of decision-useful information. This new report provides: an overview of what ESG reporting is how investors are using the information how public company auditors are well-positioned to enhance the reliability of ESG information, given their public interest role key questions board members can ask management and public company auditors  questions investors can ask when using ESG information to make capital allocation decisions The coronavirus pandemic has accelerated the focus on ESG information, as investors are increasingly seeking information on employee health and work environments, according to the CAQ.