Sustainability

  European Commission gives State aid boost to SMEs adversely impacted by COVID-19  The European Commission has made its third amendment to the State aid Temporary Framework in order to further support the micro, small and start-up companies adversely impacted by the COVID-19 outbreak. This amendment extends the Temporary Framework to enable Member States to provide public support to all micro and small companies, even if they were already in financial difficulty on 31 December 2019. The main purpose of the Temporary Framework is to provide targeted support to otherwise viable companies that have entered into financial difficulty as a result of the pandemic. The framework does this by: Providing support to support micro and small companies including start-ups Creating incentives for private investors to participate in coronavirus-related recapitalisation aid measures Ensuring the protection of the Single Market and ensuring a level playing field Chartered Accountants Ireland representation in the new Government Nearly 135 days after General Election 2020, Ireland finally has a new Government. A coalition government formed cross a historic political background of four months of lengthy negotiations, COVID-19, and Brexit, it is also being referred to as Ireland’s “greenest-government-ever”.  However, the new Government now has at its hands the complex task of steering Ireland through economic turbulence and recovery. With a new Cabinet of ministers agreed upon on Saturday, Fianna Fáil party leader, Micheál Martin, will be heading it as Ireland’s new Taoiseach.  With Michael McGrath T.D. appointed as the new Minister for Public Expenditure and Reform and Peter Burke appointed as Minister for State at the Department of Housing,  Chartered Accountants Ireland currently has four members elected to the 33rd Dáil. Kieran O’Donnell T.D. (FG), and Sean Fleming T.D. (FF) are current members of Chartered Accountants Ireland elected to the Dáil. You can also read Chartered Accountants Ireland’s member profile feature on Michael McGrath, as highlighted in the Annual Report 2019.  FRC asks auditors, accountants and actuaries to address the climate challenge Hannah Armitage of the FRC's Financial Reporting Lab on July 1 describe the key role the FRC plays in ensuring market and financial system participants take into account climate-related issues, and that companies must provide information to investors and other stakeholders about their plans for the future and the challenges and opportunities they face in a future low carbon economy. Marking the beginning of London Climate Action Week (Digital), Armitage describes climate change as being high on the FRC’s agenda as the regulator of the accounting, auditing and actuarial sectors, and announced that the FRC is carrying out a thematic review to understand what boards, companies, auditors and professional bodies are doing to consider and report on the climate-related issues they face within their own areas of responsibility.  The Joint Forum on Actuarial Regulation, of which the FRC is the Chair, also recently identified climate change as a main risk in its ‘Risk Perspective’.  Although Armitage acknowledged that reporting on the effects of climate is not easy, involving as it does, making assessments of an uncertain future and its impact on business, she stated that working out how we benchmark against this uncertain future is part of the ongoing work currently happening on climate change at the moment, and cited as examples: the FCA’s consultation on ‘comply or explain’ reporting on TCFD (Taskforce on Climate-related Financial Disclosures), work on the Pensions Bill regarding climate change, the IASB briefing note on the impact of climate change on financial reporting, and the efforts and insights shared by those taking part in the London Climate Action Week events. ESRI states that considerable effort is required for Ireland to reach EU emission goals New research from the ESRI finds that emissions reductions due to COVID-19 business interruptions will be short-lived and will not help Ireland reach its emissions targets. The research from the ESRI analysed how the COVID-19 crisis will impact upon the Irish economy and environment. It finds that:  Irish GDP is expected to decrease by around 13 per cent in 2020 Economy-wide CO2 emissions are expected to decrease by 9.5 per cent Low current energy prices will increase energy-demand and emissions will rise again in 2021 Ireland risks missing its 2020 and 2030 emissions targets. Read all our updates on our Public Policy web centre.

Jul 03, 2020
Sustainability

  Every corner of the world has been touched by COVID-19. The socioeconomic outlook is uncertain and the future is challenging as millions have experienced some sort of displacement in their professional and personal lives. As the world begins to adjust to COVID-19 and move forward, we need to ensure the world’s workforce is ready to rebuild with optimism and lead with resilience. We must work towards creating a more sustainable future, and that requires each and every one of us to play our part. As part of the ‘Building Resilience’ Series, Chartered Accountants Worldwide is sharing insight and experience from young leaders and experts that will equip young professionals with the knowledge and confidence to lead through this uncertain time. Join the Chartered Accountants Worldwide webinar: Building Resilience: A #FinBiz2030 Series “Courage in Adversity” Thursday 9 July 17.30 BST / 18.30 SAST / 12.30 EST  The ‘Building Resilience’ webinar series is aimed at young finance, accountancy and business professionals, students and One Young World Ambassadors.  

Jul 03, 2020
Sustainability

New research from the ESRI finds that emissions reductions due to COVID-19 business interruptions will be short-lived and will not help Ireland reach its emissions targets. The research from the ESRI analysed how the COVID-19 crisis will impact upon the Irish economy and environment. It finds that:  Irish GDP is expected to decrease by around 13 per cent in 2020 Economy-wide CO2 emissions are expected to decrease by 9.5 per cent Low current energy prices will increase energy-demand and emissions will rise again in 2021.  The results come from research funded by the Department of Communications, Climate Action and the Environment (DCCAE) applying the ESRI’s environment, energy and economy (I3E) model for Ireland. This work assumes that the economic structure of the Irish economy will recover in 2021.  Co-author of the report, Dr Kelly de Bruin, said, “Though the economic impacts of the COVID crisis are severe, due to among others the decreased energy prices, we do not expect large emissions reduction as seen during the financial crisis of 2008. Ireland would still need to put in considerable effort to reach its EU emission goals. The results of the study underline the importance of havinbg a well-designed government response policy package, which considers the unique economic and environmental challenges presented by the COVID-19 crisis.”   The main findings of the report are: overall economic activity measured by real gross domestic product (GDP) will decline by 13%, depending on the duration of the restrictions. The private consumption in real terms shrinks by 15.5%. The substantial decline in investment expenditures will have long-lasting repercussions for the sectoral capital stock which will prevent the Irish economy from returning to its business-as-usual pattern. The decreased energy prices will help Ireland in reducing both the cost of production and the import bill which, in turn, positively affects trade balance. Decreasing tax revenues due to the economic slowdown and increasing government expenditures in the form of transfers will substantially deteriorate public balances, where the debt stock will increase by 14.2%. The total disposable income of all households will decrease due to the declines in both wage and capital income. The government stimulus package will play a substantially corrective role to reduce the adverse economic impacts of the crisis on disposable income of the most vulnerable household groups in urban and rural areas. The initial impacts of the COVID crisis will increase inequality across household types, however, with the government stimulus package, inequality decreases. From an environmental perspective, the results imply that although lower energy prices will boost energy demand, the impacts of decreased energy demand due to decreased consumption and production will be larger. As a result, the economy-wide CO2 emissions will decline by 9.5% in 2020. However, from 2021, even when assuming a gradual economic recovery, the low energy prices will result in increased emissions compared to business-as-usual, resulting in Ireland missing its 2020 and 2030 non-ETS emissions targets (by far). Ireland risks an EU fine at the end of this year and risks not meeting the even tougher 2030 targets unless radical steps are taken to curtail emissions.  Click here for a press release and the full report from the ESRI.  

Jul 03, 2020
Financial Reporting

Hannah Armitage of the FRC's Financial Reporting Lab on July 1 described the key role the FRC plays in ensuring that market and financial system participants take into account climate-related issues, and that companies provide information to investors and other stakeholders about their plans for the future and the challenges and opportunities they face in a future low carbon economy. Marking the beginning of London Climate Action Week (Digital), Armitage described climate change as being high on the FRC’s agenda as the regulator of the accounting, auditing and actuarial sectors. She announced that the FRC is carrying out a thematic review to understand what boards, companies, auditors and professional bodies are doing to consider and report on the climate-related issues they face within their own areas of responsibility.  The Joint Forum on Actuarial Regulation, of which the FRC is the Chair, also recently identified climate change as a main risk in its ‘Risk Perspective’.  Although Armitage acknowledged that reporting on the effects of climate is not easy, involving, as it does, making assessments of an uncertain future and its impact on business, she stated that working out how we benchmark against this uncertain future is part of the ongoing work currently happening on climate change at the moment, and cited as examples: the FCA’s consultation on ‘comply or explain’ reporting on TCFD (Taskforce on Climate-related Financial Disclosures), work on the Pensions Bill regarding climate change, the IASB briefing note on the impact of climate change on financial reporting, and the efforts and insights shared by those taking part in the London Climate Action Week events.   Click here for more information on London Climate Action week, including a link to the recording debate “Peak TCFD”, a turning point where the Task Force’s recommendations have surpassed a critical mass for mainstream adoption.  

Jul 02, 2020
Sustainability

The European Parliament recently adopted the Taxonomy Regulation – a key piece of legislation that will contribute to the European Green Deal by boosting private sector investment in green and sustainable projects. The taxonomy will help create the world’s first-ever “green list” - a classification system for sustainable economic activities. This will create a common language that investors can use everywhere when investing in projects and economic activities that have a substantial positive impact on the climate and the environment. By enabling investors to re-orient investments towards more sustainable technologies and businesses, this piece of legislation will be instrumental for the EU to become climate neutral by 2050. Valdis Dombrovskis, Executive Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union said: “The adoption of the Taxonomy Regulation today marks a milestone in our green agenda. It creates the world's first ever classification system of environmentally sustainable economic activities, which will give a real boost to sustainable investments.” Today's endorsement by the European Parliament follows the adoption of the text by the Council on 10 June 2020. Today's endorsement by the European Parliament marks the final step of the adoption process of the political agreement that co-legislators had reached on 17 December 2019. The Platform on Sustainable Finance The Regulation also formally establishes the Platform on Sustainable Finance. This platform will be an advisory body composed of experts from the private and public sector. It will assist the Commission in the preparation of technical screening criteria (the so-called ‘delegated acts'), which will develop the taxonomy further. It will also advise the Commission on the further development of the EU Taxonomy to cover other sustainability objectives and provide advice on sustainable finance more broadly. The platform will consist of up to 57 members, 50 of which will be selected through the call for applications. The platform will be made up of a balance of stakeholders as shown in the figure below.   The Commission has launched a call for applications for members of the Platform on Sustainable Finance, with a deadline for applications of 16 July 2020.

Jun 29, 2020
Sustainability

  On 25 June 2020, Minister for Communications, Climate Action and Environment, Richard Bruton, T.D. published the first set of new guidelines to help businesses in key sectors save money and minimise waste as they re-open.  Full guidelines will be published in the coming weeks so that enterprise can embed sustainability and climate action into their business, as they reopen after COVID-19. This first set of guidelines are aimed at supporting SMEs in the construction industry to embed sustainability as they re-open after COVID-19. Minister Bruton said:   “… These guidelines will not only help enterprise to embed sustainability across their business, making them more resilient in the long-term, but will also be helpful in showing how to keep costs down which will be crucial over the coming period.”  Up to 80 per cent of a project's profit can be lost due to poor waste management and up to 17 per cent of profits can be lost due to poor energy use. These guidelines set out simple steps to help businesses save money by reducing water use, waste and energy, including install a thermostat in drying rooms to prevent overheating, reducing idling times of plant machinery to reduce excess fuel use and emissions, segregating and reducing waste and advice on take-back schemes.     Minister Bruton said:  “We have an opportunity now to embed good practices that will help sustain our recovery and our environment into the future. Doing business in a sustainable way is an investment in all our futures.” "This approach will be a core part of the National Waste and Circular Economy Action Plan, which will be published shortly."  The next guide due to publish in the series will provide support to the hospitality sector as it prepares to reopen. Tips on preventing food waste and saving water and energy will demonstrate how significant financial savings can be made by making small changes. Keep an eye on our Public Policy updates for the next guide.  

Jun 29, 2020
Public Policy

Nearly 135 days after General Election 2020, Ireland finally has a new Government. A coalition government formed cross a historic political background of four months of lengthy negotiations, COVID-19, and Brexit, it is also being referred to as Ireland’s “greenest-government-ever”. However, the new Government now has at its hands the complex task of steering Ireland through economic turbulence and recovery. With a new Cabinet of ministers agreed upon on Saturday, Fianna Fáil party leader, Micheál Martin, will be heading it as Ireland’s new Taoiseach. A full list of the new ministerial appointments can be found below. With Michael McGrath T.D. appointed as the new Minister for Public Expenditure and Reform, Chartered Accountants Ireland currently has four members elected to the 33rd Dáil. Kieran O’Donnell T.D. (FG), Peter Burke T.D. (FG), and Sean Fleming T.D. (FF) are current members of Chartered Accountants Ireland elected to the Dáil. You can also read Chartered Accountants Ireland’s member profile feature on Michael McGrath, as highlighted in the Annual Report 2019. Minister Department Micheál Martin (FF) Taoiseach Leo Varadkar (FG) Tánaiste and Minister for Enterprise, Trade and Employment Eamon Ryan (Greens) Minister for Climate Action, Communication Networks and Transport Stephen Donnelly (FF) Minister for Health Darragh O'Brien (FF) Minister for Housing, Local Government and Heritage portfolio Barry Cowen (FF) Minister for Agriculture and the Marine Norma Foley (FF) Minister for Education Michael McGrath (FF)* *Member of Chartered Accountants Ireland Minister for Public Expenditure and Reform Paschal Donohoe (FG) Minister for Finance Helen McEntee (FG) Minister for Justice Simon Coveney (FG) Minister for Foreign Affairs and Defence Catherine Martin (Greens) Minister for Media, Tourism, Arts, Culture, Sports, and the Gaeltacht Roderic O'Gorman (Greens) Minister for Children, Disability Equality, and Integration Heather Humphreys (FG) Minister for Social Protection, Community & Rural Development, and the Islands Simon Harris (FG) Minister for Higher Education, Innovation and Research Hildegarde Naughton (FG) Minister of State at the Department of Climate Action attending Cabinet Pippa Hackett (Greens) Minister of State at the Department of Agriculture attending Cabinet Dara Calleary (FF) Government Chief Whip and Minister of State attending Cabinet Paul Gallagher Attorney General

Jun 29, 2020
Sustainability

  The vote to approve the draft programme for Government is currently underway. Take a look at today’s Public Policy news to see what is coming down the line. Also, you can read about Minister Bruton 's latest Climate Action & Sustainability Guidelines for Enterprise, as businesses reopen after COVID-19.   Government Formation: What is coming down the line? With voting on the programme for Government coming to an end today and a decision due shortly on whether Fianna Fáil, Fine Gael and the Greens will enter a historic coalition, here is a guide on what to expect next. You can also view a timeline of Government formation here.   How many votes does each party need internally for the programme to be ratified? The ratification process to approve the government formation deal is currently underway in each of the individual parties of Fianna Fáil, Fine Gael and the Greens. The counting of votes started at 12pm today. Fine Gael requires the approval of its internal electoral college, rather than every party member, and only has 700 votes to count. The count is relatively short and will begin today after lunchtime. The Greens and Fianna Fáil are running one member, one vote ballot and will take longer to count votes than Fine Gael. The count started at noon with a result expected in the evening.   If the three parties approve the deal, what happens next? There will be a full sitting of the Dáil in the Convention Centre in Dublin at 10:30am on Saturday 27 June to elect Fianna Fáil leader Micheál Martin as Taoiseach. The Dáil cannot sit in Leinster House due to the need for social distancing if all TDs are present. Following Mr Martin’s election as Taoiseach, he will then be invited by the Ceann Comhairle to make a brief statement. The House will then adjourn to allow Mr Martin to receive his seal of office from President Michael D Higgins in Áras an Uachtaráin, which is expected to happen at around 12.30pm.   When will the new Cabinet be picked? Upon receiving his seal from the President, Mr Martin is expected to travel to his new office in Government Buildings where he will appoint the new Cabinet. Fianna Fáil and Fine Gael will have six full Cabinet posts, and the Greens will hold three. Leo Varadkar will choose the Fine Gael nominees and Eamon Ryan will choose the Green nominees. The leaders of Fine Gael, Fianna Fáil and the Green Party met on Thursday this week to discuss the ministerial and departmental structure of the new Government. Climate Action & Sustainability Guidelines published for Enterprise   On 25 June 2020, Minister for Communications, Climate Action and Environment, Richard Bruton, T.D. published the first set of new guidelines to help businesses in key sectors save money and minimise waste as they re-open.   Full guidelines will be published in the coming weeks so that enterprise can embed sustainability and climate action into their business, as they reopen after COVID-19.   This first set of guidelines are aimed at supporting SMEs in the construction industry to embed sustainability as they re-open after COVID-19. Minister Bruton said:   “… These guidelines will not only help enterprise to embed sustainability across their business, making them more resilient in the long-term, but will also be helpful in showing how to keep costs down which will be crucial over the coming period.”  Up to 80 per cent of a project's profit can be lost due to poor waste management and up to 17 per cent of profits can be lost due to poor energy use. These guidelines set out simple steps to help businesses save money by reducing water use, waste and energy, including install a thermostat in drying rooms to prevent overheating, reducing idling times of plant machinery to reduce excess fuel use and emissions, segregating and reducing waste and advice on take-back schemes.   Minister Bruton said:  “We have an opportunity now to embed good practices that will help sustain our recovery and our environment into the future. Doing business in a sustainable way is an investment in all our futures.” "This approach will be a core part of the National Waste and Circular Economy Action Plan, which will be published shortly."  The next guide due to publish in the series will provide support to the hospitality sector as it prepares to reopen. Tips on preventing food waste and saving water and energy will demonstrate how significant financial savings can be made by making small changes. Keep an eye on our Public Policy updates for the next guide.   European Parliament adopts the Taxonomy Regulation towards creating world’s first-ever “green list” On 18 June, the European Parliament adopted the Taxonomy Regulation – a key piece of legislation that will contribute to the European Green Deal by boosting private sector investment in green and sustainable projects. The taxonomy will help create the world’s first-ever “green list” - a classification system for sustainable economic activities. This will create a common language that investors can use everywhere when investing in projects and economic activities that have a substantial positive impact on the climate and the environment. By enabling investors to re-orient investments towards more sustainable technologies and businesses, this piece of legislation will be instrumental for the EU to become climate neutral by 2050. Valdis Dombrovskis, Executive Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union said: “The adoption of the Taxonomy Regulation today marks a milestone in our green agenda. It creates the world's first ever classification system of environmentally sustainable economic activities, which will give a real boost to sustainable investments.” Today's endorsement by the European Parliament follows the adoption of the text by the Council on 10 June 2020. Today's endorsement by the European Parliament marks the final step of the adoption process of the political agreement that co-legislators had reached on 17 December 2019.   The Platform on Sustainable Finance The Regulation also formally establishes the Platform on Sustainable Finance. This platform will be an advisory body composed of experts from the private and public sector. It will assist the Commission in the preparation of technical screening criteria (the so-called ‘delegated acts'), which will develop the taxonomy further. It will also advise the Commission on the further development of the EU Taxonomy to cover other sustainability objectives and provide advice on sustainable finance more broadly. The platform will consist of up to 57 members, 50 of which will be selected through the call for applications. The platform will be made up of a balance of stakeholders as shown in the figure below.     The Commission has launched a call for applications for members of the Platform on Sustainable Finance, with a deadline for applications of 16 July 2020.    Read all our updates on our Public Policy web centre.

Jun 25, 2020
Press release

Tuesday's announcement that Revenue is to query claims made by 55,000 Irish businesses for temporary wage subsidies is very unhelpful to Irish industry which already has so much to deal with.  While claims for the Temporary Wage Subsidy Scheme should of course be policed, the announcement that Revenue is to correspond with so many Irish businesses runs counter to their previous indication that vetting would only take place at the end of the scheme.  Claiming the Temporary Wage Subsidy depended on eligibility, and businesses were asked to self-assess their entitlement. The blanket enquiry approach suggests that no attempt is being made to identify risky claims by the authorities.  All claimants of the scheme are to have their names published, and all employees are clear from their payslips that their employer is claiming money through the scheme.  These very public checks should go a significant way towards satisfying the authorities that the process is transparent.    Commenting, Norah Collender, Professional Tax Leader at Chartered Accountants Ireland said       “Carrying out blanket enquiries of this nature the very week that so many businesses are trying to reopen signals an indifference to the plight of many businesses. We are calling on Revenue to defer any compliance interventions until the Autumn. This will help businesses to focus on getting back to work rather than having to deal with Revenue correspondence following their enforced shutdown in response to the coronavirus pandemic.”  The Revenue Commissioners have to date been exemplary in their response to dealing with the pandemic, and in particular, their operation of the Temporary Wage Subsidy Scheme has been deservedly praised.  Unfortunately, this blanket and unselective compliance measure, launched at this critical juncture, could undermine much of the good work and a lot of goodwill established in recent weeks.    Ends   

Jun 24, 2020