The Climate Action Framework was approved by the Irish Government in August 2022. Sara McAllister, Partner and Head of Business Risk Services at Grant Thornton, sheds light on its origins and the obligations that organisations must fulfil In August 2022, the Irish Government approved the Climate Action Framework (the Framework) for the commercial semi-state sector. Developed by the New Economy and Recovery Authority (NewERA) in collaboration with the Department of Public Expenditure and Reform and the Department of Environment, Climate and Communications, the Framework applies to all commercial semi-state (CSS) companies.  CSS companies that sign up to or adopt the Framework are bound to a series of commitments for delivering on climate action. The Framework also outlines targeted approaches, informed by existing best practices, for implementing solutions that address the sector’s climate action objectives. What’s behind the Framework? CSS companies have an important role in achieving the Government’s 2030 climate action targets as set out in the Climate Action and Low Carbon Development (Amendment) Act 2021 and Climate Action Plan (CAP) 2021. A robust climate action strategy includes objectives for both mitigating and adapting to climate change. The public sector is uniquely positioned to lead by example, implementing changes that help Ireland achieve its climate action objectives and transition to a low-carbon and climate-neutral economy and society.  By taking charge, upholding commitments and successfully delivering on climate action strategies, public sector bodies can show other industries that meeting the Government’s climate action targets is achievable. CSS companies must fund the cost of meeting the commitments from their own resources. The Sustainable Energy Authority of Ireland’s (SEAI) public-sector monitoring and reporting system will measure the impact of their climate actions. Five commitments for CSS companies The five commitments within the Framework map onto the three pillars outlined in the Public Sector Leading by Example sections of the CAP 2019 and 2021 – measurement of carbon footprint, green public procurement and carbon pricing in capital evaluation.  The two additional commitments relate specifically to climate actions for corporate environments, focusing on the governance of climate action objectives and financial disclosures. Commitment 1: Governance of Climate Action Objectives What is it: Oversight at board level and integration of climate action objectives in the company’s strategic business planning. Why it matters: Having board-level oversight offers a clue about the importance of climate-related issues to an organisation as a whole. Buy-in and involvement at this level sends a signal to the entire company that meaningful climate action is integral to the company’s strategic direction. The board’s approval and monitoring of the resulting sustainability strategies ensures they are progressing appropriately, putting the organisation on track to meet its shorter-term climate-related benchmarks and ultimately achieve its long-term climate action objectives. Commitment 2: Emissions Measurement and Reduction Target What is it: Formal adoption of government emission reduction targets for the public sector and the SEAI measurement methodology. Why it matters:  Having a reporting structure to capture, compare and monitor carbon emissions over time is critical for driving accountability in reducing emissions.  At a minimum, organisations should be measuring their Scope 1 and Scope 2 emissions; however, the reporting requirements for Scope 3 emissions are set to increase, so companies can get ahead of the curve by beginning to report on these emissions now.   CAP 2021 requires that public sector bodies reduce their emissions by 51 percent. That’s an ambitious and challenging target, and the challenge will likely increase as the types of emissions included 'in scope' continue to expand. Commitment 3: Measuring and Valuing Emissions in Investment Appraisals What is it: Having investment decision-makers incorporate the value of carbon emissions in their decision-making parameters. Why it matters: Project appraisals for public capital investments need to consider fossil-fuel consumption to avoid any expenditures on long-term projects that have a commitment to or dependency on fossil fuels.  Greenhouse gas emission targets are legally binding and challenging to meet, so investment decision-makers need to take a project’s potential carbon emissions into account before they make a financial investment. Using carbon pricing during appraisals allows decision-makers to fully understand the cost that society will bear for a project’s emissions.  As a result, they can appreciate the climate consequences of their investment decisions and make better, more informed choices when presented with different options. The 2019 Public Spending Code sets out current carbon pricing; however, the Code is likely to be updated again to estimate the cost of achieving CAP 2021’s enhanced target of a 51 percent emission reduction. CSS companies must be in full compliance with this code year on year. Commitment 4: Circular Economy and Green Procurement What is it: The promotion of circular economy measures and implementation of green procurement processes. Why it matters: A circular economy reduces waste by maintaining the value of products and materials for as long as possible. Forty-five percent of carbon emissions come from the production of goods, so implementing a circular economy is a necessity for meeting emission reduction targets. The Whole-of-Government Circular Economy Strategy sets out Ireland’s transition plan to a circular economy. The public sector will play a leading role in this transition by implementing green procurement and circular economy practices. The Office of Government Procurement (OGP) has updated its procurement frameworks to align with these practices, providing guidance to public and semi-state bodies on how to meet their need for goods, services, works and utilities with solutions while simultaneously considering the total economic and environmental cost – from cradle to grave – of a solution. CSS companies should engage with the OGP and central purchasing bodies to facilitate their transition to green procurement practices. Commitment 5: Climate-related Disclosures in Financial Reporting What is it: Compliance with a relevant and appropriate climate-related disclosures framework within a defined time frame. Why it matters: Companies, including CSS companies, must become more transparent and aggressive about reporting climate-related information. Transparency is key for building and maintaining stakeholder trust and preventing reputational damage. Investors, regulators, purchasers and other stakeholders increasingly want access to this climate-related information because these insights often have implications for their own climate-related decision-making. Regulatory authorities and governments continue to update and strengthen their environmental reporting requirements. For instance, the new EU Corporate Sustainability Reporting Directive requires that companies operating in the EU report sustainability disclosures across several topics related to environmental and societal issues. CSS companies can keep pace with such regulations by adhering to a robust and appropriate climate-related disclosures framework.

Ireland’s urban growth demands sustainable development. As we transition to a green future, our focus must be on modernising regulations, energy resilience, R&D and public-private partnerships, says Robert Costello Ireland’s urbanisation has been rapid: in 1969, half of the population lived in rural areas, and urbanisation is expected to reach 75 percent by 2050. In recent decades, urbanisation combined with general population growth and an economic boom has dramatically increased the footprint of Ireland’s cities. Much of this growth occurred without due regard for sustainable development. As Ireland sets out on a green transition, we must focus on making our cities sustainable. Like the broader economy, Ireland’s cities run largely on fossil fuels. According to the United Nations, cities consume about 78 percent of the world’s energy, accounting for more than 60 percent of greenhouse gas emissions. Transport accounts for almost 18 percent of total emissions in Ireland, and nearly all (94 percent) of these emissions come from road transport. Ireland has among the longest commute times in Europe, with many commuting into and around cities. Ireland’s buildings are among the hardest to heat in Europe, with heat loss rates (U-values) three times those of Sweden. With poor heat retention and a relatively high reliance on solid fuels and oil, Irish buildings have the highest emissions in Europe. Net zero emissions commitments of Ireland and the EU The European Union is committed to achieving a 55 percent reduction in greenhouse gas emissions by 2030 and net zero emissions by 2050. Ireland has committed to reducing emissions by 50 percent by 2030 and achieving net zero emissions by 2050. Considering Ireland’s starting point relative to many of our European counterparts, significant action is required across the economy and society. By implementing initiatives across the following four pathways, Ireland’s urban areas can become more sustainable and resilient to climate change. 1. Modernise regulations Having the funding and finance to complete the green transition is necessary, but it is not sufficient: the regulatory environment must enable the required investment. Ireland’s regulatory regime has been slow to respond to the needs of those working towards Ireland’s net zero ambition. Green hydrogen (hydrogen produced from renewable energy) will have a key role to play in decarbonising the country’s hard-to-electrify sectors. This must be underpinned by a national hydrogen strategy that reviews existing regulations, considers where changes are required, and signals to the market the direction of travel in terms of the development of this vital sector. While the Government has consulted on a hydrogen strategy, the consultation report has yet to be published. An ambitious hydrogen strategy will go hand in hand with plans to develop offshore wind farms on Ireland’s west coast, allowing the country to become an energy exporter. 2. Plan for energy resilience and sustainability According to Engineers Ireland, Ireland faces an energy trilemma in which we must meet our energy needs while ensuring that we (i) increase sustainable energy production, (ii) keep our energy supply secure, and (iii) maintain affordability. Diversity of supply and investment in infrastructure, such as interconnectors and energy storage, are essential in overcoming this trilemma. 3. Invest in research and development We cannot build the world of tomorrow without research and development (R&D) today. We must therefore recognise the role of R&D within Ireland in making our green transition possible. As an international hub for technology firms, Ireland has the potential to make digitalisation a core part of how we decarbonise our economy, building smart cities and communities. Combined public and private investment in digitalisation R&D will transform our economy. 4. Rethink public-private partnerships Public-private partnerships (PPPs) are a very useful method of contracting to deliver infrastructure. In Ireland, they have been successfully deployed to develop our motorway network, build schools and now deliver much-needed social housing. They involve a lot of upfront work, de-risking projects and ensuring that the assets built are robust and well-maintained into the future. They also encourage more private sector involvement in infrastructure, bringing new technology and innovation into projects. In addition, PPPs allow governments and public bodies to retain ownership of the infrastructure assets, an essential feature for long-term public ownership. Rethinking PPPs involves broadening the areas in which this model can be deployed to help realise our net zero ambition. Areas where the model (or a variation of the model) can be deployed include district heating, battery storage, offshore grid infrastructure, bus and train fleets, electric vehicle (EV) charging, sustainable buildings and port infrastructure. On the (path)way to a better future Cities, big and small, can set out on clean-energy pathways. Each pathway requires working with various stakeholders, including some with competing needs. These stakeholders include regulators, power generators, power transmission and distribution companies, industry and consumers. Only by laying the proper groundwork can people be brought on board and positive outcomes maximised. Stakeholder engagement is all the more essential in the case of Ireland’s cities, which have less administrative and financial autonomy than cities such as Paris or Berlin – Ireland has the lowest level of local autonomy in the European Union. With a population that continues to grow rapidly and become more urban, Ireland must seize the opportunity to build more sustainable cities. A successful and sustainable green transition requires bringing people on board and embracing the technology that will enable shorter, cleaner commutes, warmer homes and a cleaner environment. Outlining and committing to clean energy pathways enables the public and private sectors to put the resources in place and build the necessary capacity to deliver the required investment in our cities and towns. Robert Costello is Leader in Capital Projects & Infrastructure Practice at PwC

  In this week’s Sustainability/ESG bulletin, read how environmental taxes in Ireland raised €4.5 billion in 2022 compared to capital taxes which raised €2.35 billion in the same period. In addition, we cover the launch of a multimillion pound project to explore the potential for geothermal energy in Northern Ireland, updates from Europe, new sustainability resources that are available for businesses, as well as the usual roundup of articles, podcasts and events. Environmental taxes bring in €4.5 billion in 2022 The Central Statistics Office (CSO) has published its latest release of environment taxes for 2022. The statistics indicate that environment-related taxes accounted for 4 percent of total taxes in 2022, amounting to €4.5 billion (compared to capital taxes which represented just under 2.9 percent in the same period amounting to €2.35 billion). Carbon taxes increased by 22 percent in 2022 compared to the same period in  2021, and amounted to €807 million. Energy taxes, which include transport fuels, accounted for 61 percent of all environment-related taxes in 2022. Transport taxes (including motor tax and vehicle registration tax) accounted for 39 percent of all environment-related taxes in 2022. Ireland’s progress on the UN Sustainable Development Goals Ireland has submitted its second Voluntary National Review (VNR) on the Sustainable Development Goals (SDGs) to the United Nations, assessing the country’s progress on actions to achieve Agenda 2030 and the SDGs. The VNR notes that while progress has been made, including fully achieving over 80 percent of the associated 169 targets, Ireland faces challenges in achieving the goals. A report published separately by Concern Ireland states that businesses, particularly SMEs, are a cohort in particular need of support in delivering on sustainability goals, and highlighted the tensions between the business sector’s drive for profit and the need to address the pressing climate and sustainability challenges. Separately, the  Minister for Transport, Eamon Ryan TD, announced the publication of the Renewable Transport Fuel Policy 2023-2025, which aims to bring Ireland closer to sustainable transport goals. Meanwhile, the EPA launched a new Food Waste Charter, calling on all businesses and State Agencies operating across the food supply chain to sign up and commit to reducing food waste to help Ireland meet its commitments to halve food waste by 2030 under UN Sustainable Development Goal 12.3. Further information about what the UN SDGs mean for accountants can be found in Chartered Accountants Ireland’s Sustainability for Accountants. Irish Government consultations on sustainability  The Department of the Environment, Communications and Climate Action (DECC) is inviting contributions to a number of consultations including: a call for expert evidence to support and inform the preparation of the Climate Action Plan 2024, which is due for publication later this year. The closing date for responses is 14 July, and submissions can be made online through a consultation platform.   a consultation on the Department’s Research and Innovation Strategy. The accompanying consultation document sets out the background and context for research and innovation in DECC, including an overview of current research and innovation activities supported. The closing date for receipt of submissions via the EU Survey website is 11 August. Climate Conversation 2023, an online questionnaire seeking views on how Ireland can secure a sustainable future and become a climate resilient society. Inputs will feed into ongoing work on Climate Action Plan 2024, and the closing date for responses is 8 September. Northern Ireland Geothermal energy potential project launches A new multimillion pound project from the Northern Ireland Department for the Economy is set to explore the potential for geothermal energy in Northern Ireland, it was announced this week. The project designed to ‘unearth the heat beneath our feet’ aims to support how the region will decarbonise the energy sector in pursuit of net zero carbon targets by 2050.  Geothermal energy is the heat generated and stored in the Earth and is a source of affordable, low-carbon, renewable energy. Air quality statistics - Europe The European Environment Agency (EEA) has published provisional data on CO2 emissions from new passenger cars and vans registered in Europe in 2022 which show that average carbon dioxide (CO2) emissions from new cars and vans in Europe dropped in 2022 for the third year running. The main driver of this trend was a continued growth in the share of electric car and van registrations. A separate report found that key air pollutants monitored under EU law continued to decline across most EU Member States, maintaining a trend since 2005. Separately the European Parliament’s Environment Committee adopted its position to improve air quality in the EU and to create a cleaner and healthier environment, setting stricter 2030 limit and target values for several pollutants to ensure that air quality in the EU is not harmful to human health, natural ecosystems and biodiversity. This news comes as the EU Commission this week adopted annual emissions allocations for Member States for 2023, 2024 and 2025, setting the maximum level of greenhouse gas emissions that each Member State can generate per year in the sectors covered by the European Union’s Effort Sharing legislation, aligning the allocations with the recently agreed, more ambitious national targets for 2030. These will collectively cut the EU’s greenhouse gas emissions in the Effort Sharing sectors by 40 percent when compared with 2005 levels (the previous 2030 target was a 30 percent reduction). Climate change, security and defence  - Europe The European Commission and the High Representative have adopted a Joint Communication laying out how the EU will address the growing impact of climate change and environmental degradation in the fields of peace, security, and defence. The communication sets out four main priorities around planning, operations and partnerships, and approximately 30 actions to deliver on them, making clear the connection between climate and environmentally induced instability and resource scarcity that can be instrumentalised by armed groups and organised crime networks, among others. Nature restoration law There was no majority amongst MEPs on the Environment Committee for the Commission’s proposal, as amended, for a Nature Restoration Law. The regulation on nature restoration was proposed by the Commission in 2022 as part of the European Green Deal to contribute to the long-term recovery of damaged nature across the EU’s land and sea areas and to achieve EU climate and biodiversity objectives. Separately the Commission is planning to mobilise an additional €430 million of EU funding for EU farmers, including €9.5 million for Irish farmers, impacted by adverse climatic events, high input costs, and diverse market and trade-related issues. New sustainability guidance for business Irish business group Ibec has launched ‘Climate Action: A toolkit for business’, in collaboration with Accenture. The toolkit provides businesses with the information they need for their climate action journey and provides practical guidance on how to develop an enduring climate action strategy.   Business in the Community Ireland has also recently published its 2023 Sustainability Handbook which aims to help develop a common understanding of the role of business as powerful agents for good in bringing about a low-carbon economy.   The Science Based Targets initiative (SBTi) has issued new supplier engagement guidance which aims to enable businesses to accelerate their decarbonisation efforts and support companies to engage their supply chains to set science-based targets.   The World Wide Fund For Nature (WWF) has issued a short explainer on the implications for business from recent climate science, describing how businesses can invest in solutions and innovations that can protect both the environment and nature, cut emissions and “unleash business ingenuity at every level with their customers, investors and employees”.   A summary has been published by the International Federation of Accountants (IFAC) of a recent 2023 EU Green Week event where global industry leaders, experts and finance professionals explored the crucial role of accountancy in driving sustainability. The event addressed the relevant skills and capacity building needed to empower accountants, and IFAC’s summary also includes useful resources and links to further information. Technical update (From our colleagues in Professional Accounting) The International Sustainability Standards Board (ISSB) issued its inaugural standards - IFRS S1 and IFRS S2 - on 26 June 2023.The standards create a common language for disclosing the effect of climate-relates risks and opportunities in companies. See also webcasts on IFRS S1 and how IFRS S1 and IFRS S2 work together, ISSB’s an article “Ten things to know about the first ISSB Standards” responses from EFRAG and IFAC and the UK Endorsement Board (UKEB) draft comment letter relating to the ISSB’s recent Request for Information to inform its initial two-year work plan. Comments are requested by 23 July 2023. The Department of Enterprise, Trade and Employment is holding a webinar on the Corporate Sustainability Reporting Directive on Tuesday 4 July at 3pm. The webinar will provide an update on the policy decisions taken following the recent public consultation on member state options, and an update on its transposition plans.  Glossary update The Chartered Accountants Ireland sustainability glossary has been updated to include the All-Ireland Pollinator Plan, the Business for Biodiversity Platform, Business for Nature, ENCORE, the Wildlife Habitat Council (WHC) and the WWF – Biodiversity Risk Filter. Did you know? People around the world are preparing for Plastic Free July. Participants are taking their own small steps by looking at the plastics in their lives and choosing one or two items to switch. A free 31 Days of Plastic Free Choices calendar is available to download, with ideas for how to reduce single-use plastic waste at work, home, school, and in the community. Podcast The Explainer: What is hydrogen power, and could it replace coal, oil, and gas? James Carton, assistant professor in Sustainable Energy with DCU and an academic advisor to the United Nations on hydrogen, joins us on this week’s podcast to discuss this lesser spotted form of energy. How do you make it? Where could it be used instead of fossil fuels? Could it be part of a clean energy future, or does it amount to simply greenwashing? (27 mins) ‘You can’t decarbonize without digitization, you can’t increase digitization without data centres’  Ciaran Hancock is joined by Irish Times Business Reporter Ian Curran, Director of Cloud Infrastructure Ireland, Michael McCarthy and Energy Researcher at UCC, Paul Deane to discuss the impact of data centres on Ireland’s carbon emissions goals (32 mins) Articles   Accounting for Sustainability (A4S) has published a piece about bring finance mindset into sustainability reporting How to tell a good ESG story (ICAEW Insights) New rules aim to clamp down on corporate greenwashing (Reuters) The crucial role of auditors and accountants in the climate change fight (Accountancy Age) Five Takeaways From the Paris Summit to Fix Global Climate Finance (Bloomberg) EU Banks Expand Risk Scenarios They Face From Climate Change  (Bloomberg) Greenwashing firms and public entities face growing threat of litigation (Irish Times) EU regulators step up scrutiny on greenwashing (ICAEW Insights) CSRD: striving for consistent and quality sustainability assurance engagements across the EU. Accountancy Europe is inviting key stakeholders to exchange on their expectations for assurance engagements, the practical implications of the CSRD assurance requirement and the role of the assurance standard. This event is in person and by invitation only. For more information, contact events@accountancyeurope.eu. 5 July Network for Chartered Accountants working on ESG projects Are you a Chartered Accountant working in ESG or working on ESG-related projects? Would you like an opportunity to engage with other Chartered Accountants working in this space to share insights, challenges and opportunities? Chartered Accountant now has a network to allow members working in sustainability/ESG to meet and discuss all matters of interest re ESG and accounting. 3rd or 4th Wednesday of every month Next: 26 July, 2023  14.00-15.00/30 Chartered Accountant House/Teams If you would like to attend please email sustainability@charteredaccountants.ie   You can find information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre.  

In this week’s public policy bulletin, we take a look at Ireland’s performance in terms of the gender gap and overall business competitiveness. We also review data on the ongoing drop in wholesale electricity prices as well as Ireland’s overall costliness in terms of household expenses compared to the rest of the EU. In addition, we report on the Bank of England’s interest rate hike in the face of stagnant inflation.   Ireland no longer in top 10 countries making most progress toward closing gender gap In its latest Global Gender Gap Report published this week, the World Economic Forum found that Ireland had slipped two places from ninth to eleventh in the ranking of nations making most progress toward closing the gender gap. Defining the ‘gender gap’ as the overall disparity between men and women across economic, social, health and political dimensions, Ireland’s gap has nonetheless narrowed by 79.2 percent in recent years. While Ireland ranked joint first in the educational attainment category, weaker ratings were given for the State’s performance in terms of political empowerment and economic participation. Iceland remains the most gender-equal country, followed by Norway, Finland, New Zealand and Sweden. Ireland ranked second in the 2023 IMD World Competitive Rankings In its 2023 World Competitiveness Report, the International Institute of Management Development (IMD) has ranked Ireland second in the world in terms of its ability to create and maintain a competitive business environment. According to the report, Ireland’s top ranking in terms of economic performance and significant improvements in government efficiency and business efficiency have contributed to the State’s rise from eleventh to second place in the overall rankings over the past twelve months. However, the economy ranked less well when it came to infrastructure, landing in nineteenth place. Wholesale electricity prices continue to fall but general household expenses remain 46 percent higher in Ireland than rest of EU Wholesale electricity prices have continued to decrease according to the CSO with prices falling by 16.2 percent in May of this year compared to the month before. Electricity prices are now 26.6 percent lower than those recorded in May 2022. However, data released this week by Eurostat on household consumption show that Irish prices were 146 percent of the EU average in 2022, higher than any other country in the bloc. The statistics show that Ireland had the highest prices in the EU for alcohol and tobacco, at more than double the union's average. Meanwhile, the State’s food and non-alcoholic beverage prices were found to be almost 15.4 percent higher than the EU average. You can read the full statistical release here. UK inflation rate remains stagnant as Bank of England raises interest rates The rate of inflation in the UK has remained stagnant at 8.7 percent despite widespread expectations of a fall. According to data released this week by the Office for National Statistics (ONS), rising prices for air travel, recreational goods and services as well as second-hand cars kept the inflation rate higher than expected. Meanwhile, in its continued pursuit to meet its stated 2 percent inflation target, the Bank of England this week raised interest rates by half a percentage point to a headline rate of 5 percent. In making the announcement, the Bank highlighted the possibility of further rate hikes in the future by stating that “if there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required”.  

  In this week’s Sustainability/ESG bulletin, read about Ireland’s climate projections and its rating as an attractive country for renewable energy investments. Also covered is the increased participation of women in senior roles in Ireland, the launch of Northern Ireland’s first ever consultation on Carbon Budgets at a time of rising emissions across almost all sectors in the region, updates from the European Commission, as well as the usual round-up of articles, podcasts and events. Met Éireann releases first climate projections from the TRANSLATE initiative Met Eireann, the Irish Meteorological Service, has this week released climate projections from a new climate resource for Ireland. Projects include a likelihood of drier summers, an increasing number of heatwaves, and wetter winters. The resource, TRANSLATE: One Climate Resource for Ireland, aims to standardise future climate projections and develop climate services that meet the information needs of decision makers. Data from TRANSLATE will be used to communicate climate science data/information for products such as indices, risk assessments, and uncertainty estimates, and provide information needed to build resilience to climate change across all locations, sectors and services. Ireland’s holds position in global renewable energy development attractiveness The latest edition of the EY Renewable Energy Country Attractiveness Index shows that Ireland has retained its 2022 position as the 13th most attractive country in the world for renewable energy investments. The index ranks the world’s top 40 markets on the attractiveness of their investment in renewable energy and deployment opportunities. Ireland’s Offshore Wind Auctions and increasing use of Corporate Power Purchase Agreements (CPPAs) have reportedly contributed to the position in the ranking. Also, this week, the Government approved the Terms and Conditions for the first offshore RESS auction, ORESS 1, with final auction results now confirmed and available on the EirGrid website. At least three offshore auctions are currently planned this decade. Irish businesses spent €8.6 billion on energy in 2021 Figures released by the Central Statistics Office (CSO) this week have revealed that the cost of energy purchases by enterprises in 2021 was €8.6 billion, of which 56 percent was paid for by firms in the services sector. The survey, using data from approximately  5,000 enterprises, showed that purchases of electricity and natural gas accounted for 62 percent of total energy costs incurred by enterprises in 2021, and the use of renewable energy purchased directly by enterprises increased by 59 percent between 2012 and 2021. The release was compiled during the COVID-19 pandemic, which impacted on the 2020 and 2021 data. Read more. Increase in proportion of women in senior roles The first annual report of the Women in Finance Charter published this week and found that female representation on executive committees in Ireland has increased from 32 to 35 percent since 2022. The Charter is a collaboration between industry and Government under the Ireland for Finance strategy. Established in 2022, it seeks to improve female representation in financial services firms operating in Ireland and is open to all financial services firms operating in Ireland. Northern Ireland launches first ever consultation on Carbon Budgets Northern Ireland’s first ever consultation on Carbon Budgets has been launched by the Department of Agriculture, Environment and Rural Affairs (DAERA). The 16-week consultation will run from 21 June to 11 October and seeks feedback on the proposed first three carbon budgets for 2023-2027, 2028-2032 and 2033-2037, as well on the interim targets that should be set for 2030 and 2040 for reductions in greenhouse gases. DAERA is also seeking views through the consultation on the recommendations of the UK Climate Change Committee (CCC) on the Path to Net Zero for Northern Ireland, and is keen to hear from individuals, businesses, communities, and other organisations from across the region. The consultation was launched the day after DAERA’s publication of a statistical bulletin on greenhouse gas emissions for Northern Ireland for the period between 1990 and 2021 which also shows that between 2020 and 2021 emissions increased in all sectors in the region, with the exception of waste management and public. The largest increases were in the transport, agriculture and energy supply sectors, respectively. Plastic packaging tax – monthly update from HMRC (From our colleagues in Tax) HMRC has begun sending a monthly email containing updates on the plastic packaging tax (“PPT”). This month’s email is available to read. HMRC has also sent an email with key reminders on the PPT. European Commission consults on Carbon Border Adjustment Mechanism The European Commission has published a call for feedback on the rules governing the implementation of the Carbon Border Adjustment Mechanism (CBAM) during its transitional implementation. To give time for businesses to prepare, during the phase, from 1 October 2023 until the end of 2025, traders will only have to report on the emissions embedded in their imports subject to the mechanism without paying any financial adjustment. Sustainable finance for SMEs and Green EU Trademarks on the rise (from our friends in Accountancy Europe) The European Commission has published a new sustainable finance package in which it states it will ask EFRAG to prioritise work on what it describes as “a voluntary standard for non-listed SMEs, which may use it to standardise the sustainability information they wish to report, and which can make it easier for them to participate in the transition to a sustainable economy.” It also emphasises the need to reinforce SMEs’ access to and opportunities in transition finance.   The EU’s Intellectual Property Office (EUIPO) has published its latest Green EU Trade Marks report, showing that SMEs account for 10 percent of environmentally friendly EU Trade Marks (EUTMs) and filed more green EUTMs than large companies between 2015 and 2021. The report argues this demonstrates the growing commitment of SMEs towards sustainable practices and their role in introducing eco-friendly goods and services into the EU Single Market.   Accountancy Europe support tools for SMEs’ sustainable transition include a paper on SME sustainability risk management and a 3-step sustainability checklist, with more to come. IFRS Foundation publishes educational material on effects of climate matters on SMEs’ Accounting Standard The International Federation for Reporting Standards (IFRS) has published educational material to illustrate how the IFRS for SMEs Accounting Standard requires companies to consider climate-related matters that have a material effect on the financial statements. The material was developed in response to feedback suggesting that interest in the potential effects of climate-related matters on SMEs’ financial statements is growing among users of those statements. Glossary update The Chartered Accountants Ireland sustainability glossary has been updated to include the Carbon Border Adjustment Mechanism (CBAM), Carbon capture, utilisation and storage (CCUS), double materiality, and more.   Podcast Richard Curtis, writer of British comedies like Love Actually, Mr. Bean and Blackadder talks to Bloomberg Zero about Make My Money Matter, an initiative to make retirement funds and banks greener (35 mins) Articles Europe is 2.3 degrees hotter than before industrial revolution, climate report finds (The Journal) Much of the time growth strategies and green strategies don’t have to be so different -  You can make your business more sustainable, with an applied focus (Irish Independent) Where are leading Irish companies on decarbonising and embracing sustainability? (Irish Times) In the loop: tech and innovation in the circular economy - From manufacturers to consumers, tech is coming around to the ideals of the reuse and regeneration of existing materials and products (Business Post)   Upcoming events The UN Global Compact is organising a series of activities around the world for International SME Day on 27 June.  Small Business, Big Impact is a live regional in-practice exchange session to learn directly from SMEs on how they are integrating sustainability into their business strategy and operations. Speakers include Jess Fleischer, CEO, Son of a Tailor (Denmark) and Hanna Kalliomäki, Chief Sustainability Officer, Paptic (Finland). 27 June 2023, 14:30 (Dublin time). Register Here CSRD: striving for consistent and quality sustainability assurance engagements across the EU Accountancy Europe is inviting key stakeholders to exchange on their expectations for assurance engagements, the practical implications of the CSRD assurance requirement and the role of the assurance standard. This event is in person and by invitation only. For more information, contact events@accountancyeurope.eu. 5 July Network for Chartered Accountants working on ESG projects Are you a Chartered Accountant working in ESG or working on ESG-related projects? Would you like an opportunity to engage with other Chartered Accountants working in this space to share insights, challenges and opportunities? Chartered Accountant now has a network to allow members working in sustainability/ESG to meet and discuss all matters of interest re ESG and accounting. 3rd or 4th Wednesday of every month Next: 28 June, 2023  14.00-15.00/30 Chartered Accountant House/Teams If you would like to attend please email sustainability@charteredaccountants.ie   You can find information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre.  

Institute President Sinéad Donovan and Tax and Public Policy Lead Cróna Clohisey represented Chartered Accountants Ireland at the National Economic Dialogue (NED) 2023 last week. The NED provides a forum for public consultation and debate ahead of Budget 2024 and this year’s theme was The economy in 2030: enabling a sustainable future for all. The discussion centred on the need to move the focus of economic dialogue towards more medium-term issues, with much debate around whether to spend or save the projected economic surplus. The need to accelerate housing supply, protect living standards and continue to invest in public services, all against the back-drop of managing inflation, formed part of many of the contributions. Institute representatives emphasised to Ministers the importance of addressing capacity building within the economy, particularly in housing and set out suggestions around using the tax system to boost supply. Documents and speeches from the NED can be found on gov.ie.

  In this week’s Sustainability/ESG bulletin, read how the EU Commission has launched a public consultation following publication of their amendments to the mandatory European Sustainability Reporting Standards (ESRSs). Also covered is the launch of an inaugural All-Ireland Sustainability Awards, the new package of sustainable finance measures from the European Commission, developments in Europe around the circular economy, resources for SMEs to drive sustainability and business growth, as well as the usual round-up of articles, podcasts and events. Public Consultation - European Sustainability Reporting Standards (ESRSs) The EU Commission has published their amendments to the mandatory European Sustainability Reporting Standards (ESRSs) and draft delegated Act that will be used to adopt them into law. The standards cover environmental, social and governance matters which many Irish based companies will have to report on as a result coming within the scope of the Corporate Sustainability Reporting Directive. The Commission has now launched a 4-week call for public feedback until 7 July.  Find out more from our colleagues in Professional Accounting here. In other news of sustainability reporting, The World Economic Forum continues its work with the International Sustainability Standards Board (ISSB) by convening a group of sustainability professionals focused on sharing best practices and practicalities of adopting ISSB Standards. All-Ireland Sustainability Awards 2023 launches The inaugural All-Ireland Sustainability Awards 2023 launched this week, with the aim of showcasing and celebrating Northern Ireland and Ireland’s best examples of sustainability among businesses and organisations. There are 14 award categories, ranging from Social Sustainability, Diversity & Inclusion Initiative of the Year; Green Marketing / Stakeholder engagement initiative of the Year; Net-Zero Initiative of the Year; Waste, Resource Management & Circular Economy Initiative of the Year; Consultant / Consultancy of the Year; Young Changemaker of the Year; to Biodiversity Initiative of the Year; and Overall Winner of the Year 2023. The awards are free to enter, and the deadline for entries is 1pm on Tuesday 15 August 2023. A network for young leaders – net zero, clean growth and sustainability, diversity & inclusion A new professional network, Leaders 2050, has launched for future leaders in all sectors who have an interest in net zero, clean growth and sustainability, with a focus on diversity and inclusion. The network is facilitated by KPMG Ireland with a mission to equip the next generation of young leaders with the skills, networks and purpose needed to drive towards a more sustainable future. Following the launch, KPMG will be running a series of events and publishing thought leadership for members, with the first in-person event taking place next month. The network is open to young professionals across every sector who have an interest in driving the ESG agenda. To sign up to receive Leaders 2050 Ireland newsletter, event invitations and subscribe to our mailing list, please see link here. Commission puts forward new package of sustainable finance measures The European Commission has put forward a package of measures to build on and strengthen the foundations of the EU sustainable finance framework. The aim of the package is to ensure the framework works for companies wishing  to invest in a sustainability transition and to make the framework easier to use, thereby continuing to contribute effectively to the European Green Deal objectives. The package adds additional activities to the EU Taxonomy and proposes new rules for Environmental, Social and Governance (ESG) rating providers, which will increase transparency on the market for sustainable investments. Europe and the Circular Economy This week saw several developments related to the circular economy in Europe: The EU parliament approved new rules to make batteries sustainable. The new rules, which will come into force once the European Council has formally endorsed the text, is particularly relevant to the 30 million electric vehicles (EVs) anticipated to be on EU roads by 2030. Speaking about the development, Rapporteur Achille Variati said: “For the first time we have circular economy legislation that covers the entire product life cycle — an approach that is good for both the environment and the economy.” The European Environment Agency (EEA) has published twobriefings that show how efficiency gains in production have reduced some environmental impacts, but are unlikely in of themselves to bring Europe’s consumption to a sustainable level. In another briefing -‘The benefits to biodiversity of a strong circular economy’ – the EEA explores how the circular economy can reduce and, in some cases, reverse the impacts of production and consumption on biodiversity, at a time when biodiversity loss and decline of ecosystems are occurring in Europe and globally due to unsustainable patterns of production and consumption. The EEA also announced a new web product produced to help prepare the public for the effects of climate change. ‘‘Extreme summer weather in a changing climate: is Europe prepared?’ aims to provide up-to-date information and data to raise awareness among decision makers and the public of the urgent need to address climate change and to support ongoing government efforts in putting in place climate mitigation measures and building societal preparedness. With it, users can explore interactive maps and charts information on heatwaves, floods, droughts and wildfires, and the rise of climate-sensitive diseases like dengue fever. Resources The UN Global Compact is inviting SMEs to join Small Business, Big Impact: A Six-Step Journey to Drive Sustainability and Business Growth. Designed specifically for SMEs, the resources comprise five short, on-demand courses, one day of virtual live peer exchange sessions, and a toolkit to help SMEs take action. It’s available in multiple languages and time zones (English, Spanish, French, Portuguese, and Arabic). Registration is open and free of charge to all SMEs. The UN Global Compact is a voluntary initiative based on CEO commitments to implement the universal sustainability principles and take steps to support the UN Sustainability Development Goals. Chartered Accountants Ireland joined the compact in 2021. Watch back On 8 June the Ulster Society hosted a webinar in partnership with British Business Bank addressing the issue of sustainability, and the responsibilities upon businesses and their advisers in meeting sustainability targets. This presentation by Julia Groves covered the basics of net zero and carbon accounting, the broader consideration of environmental, social and governance factors in business decision, why SMEs should take action, what they can do and how the British Business Bank is involved. A recording of this webinar is available to view here.   Podcast With Ireland set to fail emissions targets again, Dr Tara Shine explains what businesses can do (4 mins) (Radio 1) Articles Nature and biodiversity ascend the ESG agenda –three new reporting requirements pushing nature and biodiversity up the ESG agenda (Accountancy Ireland) Nature-restoration law narrowly survives in European Parliament (Irish Times) The financial sector needs to take a leadership role in addressing climate change, the Deputy Governor of the Central Bank said (Business Post) How green are your pension funds? (ICAEW) Investors pull back support for green and social measures amid US political pressure (Financial Times)   Upcoming events   The Northern Ireland Energy Summit Delivered in partnership with the Department for the Economy and the Centre for Advanced Sustainable Energy (CASE), the Northern Ireland Energy Summit will take place at the ICC, Belfast, on Wednesday 21 June 2023. The event will focus on building an informed consensus on how best to take Northern Ireland forward in meeting its renewable energy targets and net zero ambitions, whilst driving 10X economic growth across innovation, sustainability and inclusion. 21 June CSRD: striving for consistent and quality sustainability assurance engagements across the EU Accountancy Europe is inviting key stakeholders to exchange on their expectations for assurance engagements, the practical implications of the CSRD assurance requirement and the role of the assurance standard. This event is in person and by invitation only. For more information, contact events@accountancyeurope.eu. 5 July Network for Chartered Accountants working on ESG projects Are you a Chartered Accountant working in ESG or working on ESG-related projects? Would you like an opportunity to engage with other Chartered Accountants working in this space to share insights, challenges and opportunities? Chartered Accountant now has a network to allow members working in sustainability/ESG to meet and discuss all matters of interest re ESG and accounting. 3rd or 4th Wednesday of every month Next: 28 June, 2023  14.00-15.00/30 Chartered Accountant House/Teams If you would like to attend please email sustainability@charteredaccountants.ie   You can find information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre.  

On 8 June the Ulster Society hosted a webinar in partnership with British Business Bank addressing the issue of sustainability, and the responsibilities upon businesses and their advisers in meeting sustainability targets. This presentation by Julia Groves covered the basics of net zero and carbon accounting, the broader consideration of environmental, social and governance factors in business decision, why SMEs should take action, what they can do and how the British Business Bank is involved. A recording of this webinar is available to view HERE A pdf copy of Julia's slides is available HERE  

Three new reporting requirements are pushing nature and biodiversity up the ESG agenda. Orla Delargy explains why Environmental, Social and Governance (ESG) topics are currently top of mind in business and finance. Climate change has dominated under the ‘E’ of ESG, but nature and biodiversity are catching up. Three developments have helped drive the momentum: the Taskforce on Nature-related Financial Disclosures, the EU’s Corporate Sustainability Reporting Directive and the new Global Biodiversity Framework. Taskforce on Nature-related Financial Disclosures    The latest Taskforce on Climate-related Financial Disclosures (TCFD) status report found that over 3,800 organisations support the TCFD and are working towards TCFD-aligned reporting. The question is whether the newer Taskforce on Nature-related Financial Disclosures (TNFD) will follow the same path, and whether nature-related disclosures will become mandatory in certain jurisdictions.  Like the TCFD framework, the TNFD proposes disclosures across four pillars: Governance – the organisation’s governance around nature-related dependencies, impacts, risks and opportunities; Strategy – the actual and potential impacts of nature-related risks and opportunities for the organisation’s businesses, strategy and financial planning where such information is material; Risk & impact management – how the organisation identifies, assesses and manages nature-related dependencies, impacts, risks and opportunities; and Metrics & targets – the metrics and targets used to assess and manage relevant nature-related dependencies, impacts, risks and opportunities where such information is material. Relatively few organisations have started incorporating biodiversity into their broader ESG governance and strategy. However, over 200 organisations are piloting the TNFD guidance and there is a public consultation currently open, with the first full version of the framework expected in September 2023.  Corporate Sustainability Reporting Directive  Where the TNFD is a global, voluntary framework, the Corporate Sustainability Reporting Directive (CSRD) is EU-specific and mandatory. The CSRD significantly expands the existing rules on non-financial reporting, with close to 50,000 companies across Europe likely to be affected in the coming years.  The CSRD disclosure requirements on biodiversity go much further than the previous reporting directive, requesting information on biodiversity metrics, policies and targets. Again, organisations are asked to identify and assess material impacts, risks and opportunities that relate to biodiversity, and the TNFD is explicitly referenced.  Crucially, organisations are asked to disclose whether they have a transition plan in line with the new Global Biodiversity Framework, agreed during the UN conference in Montreal in December 2022. Global Biodiversity Framework  The overarching vision of the Global Biodiversity Framework (GBF) is no net loss of biodiversity by 2030, net gain from 2030 and full recovery by 2050. The GBF sets out a plan for the next decade, with four long-term goals and 23 targets, spanning a wide range of topics including spatial planning, nature restoration, invasive alien species, agriculture and climate change. Although almost all the targets are relevant to the private sector, Target 15 stands out. It asks countries to take measures to ensure that organisations assess and disclose their risks, dependencies and impacts on biodiversity. The question is how national governments will interpret this and what measures they will take.  How organisations can use the frameworks Organisations will be encouraged to see the degree of alignment and overlap between emerging frameworks such as the TNFD, CSRD and GBF. The challenge is to get familiar with these frameworks and, crucially, get started now.  As many of the frameworks discussed above are still in development, it is tempting to adopt a ‘wait-and-see’ approach. However, organisations can progress training and capacity building now. This is a new topic for many people but getting informed is the prerequisite for taking the right actions. Orla Delargy is an Associate Director with KPMG