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 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.  

  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.  

The European Financial Reporting Advisory Group (EFRAG) has released a series of 20 educational videos on the first set of draft European Sustainability Reporting Standards (ESRSs). These videos provide some useful guidance in the form of short "glimpses" and longer "educational sessions" which will help viewers gain an understanding of the requirements as set out in the ESRSs. The ESRSs , which were subject to public consultation in 2022 set out the sustainability reporting requirements which will be phased in over time for different kinds of companies, with the first reporters doing so for years commencing on or after 1 January 2024.

The FRC Lab has published a report entitled "Net zero disclosures". This report, which highlights examples of current practice, discusses some of the key considerations for investors who use net zero disclosures and the elements of net zero disclosures that investors want to understand. The report builds on three key elements of net zero disclosures (commitments, impacts and performance) and discusses areas of consideration and challenge within these topics. The report provides some useful guidance for preparers seeking to navigate the difficult area of reporting on their greenhouse gas emission reduction commitments.

In this week’s sustainability/ESG bulletin, we bring details of Cabinet’s approval of Ireland’s new Circular Economy Bill. Also covered are EU developments, the release of sustainability-related strategies in both the Republic and Northern Ireland, technical updates, and a link to listen back to our interview with Sustainability Expert Rosie Dunscombe. In the news Ireland’s Circular Economy Bill receives Cabinet approval  In what has been described as a landmark Bill that will introduce world-leading moves to reduce waste and influence behaviour, the Circular Economy Bill received Cabinet approval this week. The new legislation will underpin Ireland’s shift from a ‘take-make-waste’ linear model to a more sustainable pattern of production and consumption that will instead minimise waste to help significantly reduce our greenhouse gas emissions. Click here for details of the Bill, particularly what it will mean for businesses. EU Commission to empower consumers for the green transition The EU has also taken action on the circular economy this week. The European Commission is proposing new consumer rights and a ban on greenwashing. It announced proposals to amend the Consumer Rights Directive to oblige traders to provide consumers with information on the durability and reparability of products, and is also proposing several amendments to the Unfair Commercial Practices Directive (UCPD). The rules will strengthen consumer protection against untrustworthy or false environmental claims, banning ‘greenwashing’ (a form of corporate misrepresentation where a company will present a green public image and publicise green initiatives that are false or misleading) and banning practices misleading consumers about the durability of a product.  Sustainability-related strategies Sustainability-related strategies were in the news last week in both Ireland and Northern Ireland: The first ever Further Education and Training (FET) Green Skills Summit in Ireland took place last week, led by SOLAS, the Further Education and Training Authority in collaboration with Education and Training Boards Ireland (ETBI). The summit addressed the green economy as an area of opportunity, and pointed to the key challenge of upskilling and reskilling for changes to existing roles. Speaking at the summit, Minister for Further and Higher Education, Research, Innovation and Science Simon Harris described it is “an important step in our response to the challenge of climate change and the targets we have set for ourselves at a national level.”   Northern Ireland’s first overarching Environment Strategy was given approval by Northern Ireland’s Environment Minister Edwin Poots . The strategy sets out Northern Ireland’s environmental priorities for the coming decades and forms part of the Executive’s Green Growth agenda. Commenting, Minister Poots said the Strategy “will provide a coherent response to the global challenges of biodiversity loss and climate change.” The draft strategy, which will have to be formally approved by an incoming Executive before it can be published, can be found here.   Technical Updates The European Commission’s advisory Platform on Sustainable Finance has published its final report on how to bring investments in line with four environmental priorities of the EU’s taxonomy of green investments which are: Ensuring a sustainable use of water and marine resources Protecting and restoring biodiversity and ecosystems Transitioning to a circular economy; and Preventing and controlling pollution. Recommendations made in the report include giving a green label to activities that meet specific environmental criteria (additional criteria are expected to be recommended by the Platform in May). The Commission is expected to publish a Delegated Act later this year.   The International Sustainability Standards Board (ISSB) has launched a consultation on its first two proposed standards. One sets out general sustainability-related disclosure requirements and the other specifies climate-related disclosure requirements. Find out more here.   Our colleagues in Professional Accounting tell us that the IFRS Foundation and Global Reporting Initiative (GRI) have announced a collaboration agreement under which their respective standard-setting boards, the International Sustainability Standards Board (ISSB) and the Global Sustainability Standards Board (GSSB), will seek to coordinate their work programmes and standard-setting activities. Resources ESG? Sustainability? ISBB? Net zero? Drowning in the ‘alphabet soup’ of sustainability terminology? You’re not alone! Listen back to our ‘Ask the Expert’ short interview that took place on Wednesday 30 March to hear Rosie Dunscombe FCA explain the key terms you're likely to hear as a finance professional.   British technology firm Dyson has reportedly created headphones designed to help people avoid polluted air in cities. The headphones come with a visor that delivers filtered air and were created in response to growing concerns about air and sound pollution in urban areas. The World Health Organisation (WHO) estimates that nine in 10 people globally breathe air that exceeds its guidelines on pollutant limits, and approx. 100 million people in Europe are said to be exposed to long-term noise exposure above its recommended level.     You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our online Sustainability Centre.   

In this week’s Public Policy Bulletin, read about recently announced Government initiatives to support remote working in Ireland, a BearingPoint study which analyses 123 European banks and the recently released annual report on public debt in Ireland. We also cover Minister McConalogue and Northern Ireland’s Minister Lyons’ trip to Expo 2020 Dubai and a statement from Minister Lyons on the independent review of Invest Northern Ireland  Initiatives to support remote working announced by Minister Humphrey   This week, the Minister for Rural and Community Development, Heather Humphreys, announced a series of major initiatives to support Remote Working. Through the Connected Hubs 2022 Call, the Department of Rural and Community Development will provide €5 million to add additional capacity to the existing remote working infrastructure in Ireland by upgrading existing hubs and Broadband Connection Points (BCPs). €8.9 million has already been provided for 118 remote working projects across the country in 2021.  In May 2021, the National Connected Hubs network was launched with 60 hubs onboarded onto the connectedhubs.ie platform. There are now in excess of 200 hubs live on the connectedhubs.ie platform, with an aim to hit 400 hubs by 2025. The Connected Hubs mobile app has been launched to allow users to find their nearest hub facility and easily book a desk space using their mobile device.   Read the press release here.  Pandemic impact on European and Irish Banks   A BearingPoint study has found that Irish banks were hit harder than many of its European peers during the Covid-19 pandemic. The study looked at 123 European banks from 2013 to 2020 and found that Irish banks set aside significantly more capital for the impairment of loans during the pandemic (an increase of 1300 percent), when compared to their European counterparts (an increase of less than 120 percent).  In 2020, Bank of Ireland and AIB had impairment charges of €1.1 billion and €1.4 billion respectively due to Covid-19 concerns. Irish banks had a negative return of 6.3 percent in 2020, compared to a European average return on equity of 2%. 2020 cost income ratios for Irish banks averaged at 68.7 percent, higher than the European banks average of 64 percent and the optimum cost income ratio, which should be less than 55 percent.   Noel Crowley, the Financial Services Director at BearingPoint, shares his response to the report here.   Annual Report on Public Debt in Ireland 2021   The Minister for Finance, Paschal Donohoe released the fifth annual report on public debt this week. The report found that public debt increased by €33 billion during the two years of the Covid-19 pandemic, now approaching a quarter of a trillion euros. This is an estimated 106 percent of national income or €47,250 for every person in the country. These figures stood at 95 percent and €41,450 in 2019.  Minister Donohoe highlighted the major fiscal challenges that lie ahead, including a likely fall in corporation tax receipts, an aging population and the large fiscal costs that will be required to finance the journey to “net neutral”. In a press release issued by the Department of Finance, Minister Donohoe concludes “This is why we need to rebuild our fiscal buffers, including by steering the public finances to a more balanced path. We can do this while continuing to make significant capital investment, as outlined in the National Development Plan. This will help to lay the foundations for future growth while protecting against the future fiscal challenges that lay ahead of us.”   Read the full report from the Department of Finance here.     Dubai’s Expo 2020  Minister for Agriculture, Food and Marine, Charlie McConalogue opened a Board Bia celebration of Irish food at the Irish pavilion at Dubai’s Expo 2020, with the current year theme “Island of Inspiration” highlighted when he remarked “that spirit of inspiration and creativity reflected in the Irish food producers, large and small, who are innovating and finding routes to premium markets in the Gulf region”.  Northern Ireland’s Economy Minister Gordon Lyons also attended the event during his two-day visit program to the UAE. Speaking from the UK Pavilion at the Expo, under the UK’s theme of “Innovating for a shared future”, Lyons said “Today, Northern Ireland is centre stage at the world’s largest live international event. We are here to bring a flavour of Northern Ireland to the world and showcase our innovations within business, tourism, food and education to a global audience."  Invest Northern Ireland independent review  Northern Ireland’s Economy Minister Gordon Lyons made a statement to the NI Assembly this week in relation to his decision to commission an independent review of Invest Northern Ireland (Invest NI). He pointed out the fantastic track record Invest NI has in making Northern Ireland the most attractive location in the UK, outside of London, in respect of foreign direct investment.   The statement from Lyons can be read here.   Dame Rotha Johnston DBE and Ms Maureen O’Reilly have been appointed as panel members to work with the panel chair, Sir Michael Lyons for this independent review. The report of their findings is expected in September 2022.   Invest NI’s offers of financial assistance to companies beyond March 2020 is currently on pause, as they await clarification on their potential 2022/2023 Budget sign allocation from its parent Department for the Economy 

Oireachtas Committee responds to the final report published by the Commission on Pensions In its response to the Report of the Commission on Pensions, the Oireachtas Joint Committee on Social Protection, Community and Rural Development and the Islands has recommended that Ireland’s State Pension age remain at 66 years. This rejects the proposal put forward by the Commission on Pensions last year that the qualifying age is increased from the current 66 years by three months every year from 2028, reaching 67 in 2031.  To fund this, the Committee recommends that the Commission on Welfare and Taxation examine potential changes to Employers’ PRSI contribution rates.  Among the 13 proposals put forward, the Committee also recommends banning the mandatory retirement age for both new and existing employment contracts. Chartered Accountants Ireland issued a statement following the response this week, welcoming the recommendation to leave the state pension age unchanged at 66 years, while recognising that the shortfall in funding the State Pension long-term needs to be addressed. The Institute said that asking employers to pay increased rates of PRSI cannot be a long-term solution and the fact that employers are already paying high salaries to compensate workers for high personal tax rates must be recognised. The Committee also recommended that funding auto-enrolment should not be prioritised over retaining the current State Pension age. Chartered Accountants Ireland however believes that reforms to enhance the sustainability of the State Pension cannot take place without parallel reforms to increase private pension coverage in Ireland to enable workers to avoid living their retirement in poverty.    Calls for coherent Government policy were also made to enable workers to adequately plan for their retirement. Bank of Ireland’s recent economic pulse survey indicates pay rises this year    According to the most recent Bank of Ireland economic pulse survey, 50 percent of firms are pricing in pay rises this year. 56 percent of people surveyed indicated that it is now easier to find or move jobs, with a third of firms reporting a struggle to fill open positions. 46 percent of those surveyed expect to see a 3 percent average increase in wages in the next year. According to Bank of Ireland’s chief economist Loretta O’Sullivan, “As businesses look to retain and attract staff, and workers find it easier to get or change jobs, upward pressure on pay is likely” with a shortage of workers helping to drive the pay increases. The survey also indicated that 77 percent expect houses prices to rise in the next 12 months, with 70 percent also expecting a rise in rent. The Economic Pulse is based on a series of monthly surveys of households and firms where they are asked for their views on a wide range of topics including the economy, hiring activities, business plans, personal spending and financial situations among others. Tánaiste intends to strengthen remote working laws   We highlighted the draft Bill to give employees the right to request remote working published by Tánaiste Leo Varadkar. The proposed legislation will set out a legal framework to apply for remote working, the reasons the request could be refused and outlines the process for appeals. The Tánaiste discussed the draft Bill with the Select Committee on Enterprise, Trade and Employment this week, indicating his plans to strengthen the legislation and his intention that “employers cannot just tick a box to say no”. The Tánaiste also reiterated that the Bill is in draft form and that “there can’t be an absolute right to remote working”. Chartered Accountants Ireland has written a letter to the Tánaiste to request clear and comprehensive guidance, including practical examples, to assist our members to implement the legislation when it becomes law. Read the Draft Scheme of the Right to Request Remote Working Bill 2022. Enhanced Illness Benefit (EIB) extended The Minister for Social Protection, Heather Humphreys TD, has secured Government approval to extend the EIB payments until the end of June 2022. Almost €230 million has been paid in EIB to date, supporting over 374,000 people. The €350 weekly payment is available to people diagnosed with Covid-19 or told to self-isolate. This is available to employees or self-employed people. For more information, and to apply, go to MyWelfare.ie. Northern Ireland Business Demography Statistics 2020 released Northern Ireland Statistics and Research Agency (NISRA) recently released the latest business demography results for Northern Ireland which looks at births, deaths and survival rates of Northern Ireland businesses by Industry and District Council Area. 6,375 businesses were born in 2020, a decrease of 3.8 percent on the previous year. 4,900 businesses closed during the year, a decrease of 9 percent from 2019. The number of businesses births was greater than the number of business deaths for all district council areas across Northern Ireland.   Retail saw an introduction of 780 businesses in 2020, a 47 percent increase on 2019 and the highest number of births for the sector since the series by industry began in 2009. Importance of Traineeships as part of economic recovery in Northern Ireland This week, Northern Ireland’s Economy Minister Gordon Lyons highlighted the importance of traineeships to enable economic recovery in the region stating that “developing the local skills base is a key priority for me and a cornerstone of the recovery”. As part of the Department for the Economy’s 10X Economic Vision, the goal is “to equip people with the skills they need for the constantly evolving jobs market and build on Northern Ireland’s successes on the global stage”. The £180 million NI Traineeship program, launched in September 2021 as part of the economic recovery package, intends to fund 20,000 Traineeship places over the next seven years.