In this week’s Sustainability/ESG bulletin, read how business leaders are increasingly looking to Chartered Accountants as trusted advisors on ESG issues. Also covered is increased funding for projects in Ireland under the Just Transition Fund; CSO statistics showing one-third of Irish office buildings received an ‘E’ energy rating or lower; new national End-of-Waste Criteria for Ireland’s largest waste stream; how the European Banking Authority is revising capital rules to include ESG risks; and the usual roundup of technical updates, articles and events.
Trust in Chartered Accountants as ESG leaders
Business leaders increasingly look to Chartered Accountants for guidance on environment, social and governance (ESG) issues. This was among the key findings from an Edelman research report that measures trust with Chartered Accountants among financial decision makers globally. Now in its fourth wave, the study focused on topical themes to the business world, including economic uncertainty, the cost-of-living crisis, combatting misinformation, digitalisation, automation, and the importance of ESG. The report was launched at a panel event run by Chartered Accountants Ireland, alongside a Chartered Accountants Worldwide research paper Trust: Making the Difference.
Increased funding for projects in Ireland under the Just Transition Fund
Minister for the Environment, Climate and Communications, Eamon Ryan, T.D., has announced a further €24 million for the Midlands region under Ireland’s EU Just Transition Fund (JTF) programme. Targeted at the wider Midlands region as it transitions away from peat extraction for energy use, the JTF programme provides funding to projects that invest in the development of local communities, create employment and help diversify the local economy. Further information is available on the website of Pobal, which is administering the scheme.
One-third of office buildings in Ireland received 'E' energy rating or lower
Figures released from the CSO this week on energy ratings of non-domestic buildings in Ireland for Quarter 3 of 2023 has found that over one-third (35 percent) of office buildings in Ireland received a Business Energy Ratings (BER) certificate of ‘E’ or below between 2009-2023. BER audits were conducted for 1,754 non-domestic buildings constructed between 2020 and 2023. Almost two-fifths (38 percent) of these buildings received an ‘A’ rating, compared with 22 percent of non-domestic buildings constructed during 2015 to 2019. While the most energy efficient building types audited during 2009-2023 were schools and colleges (40 percent of these were awarded an ‘A’ rating), at least 14 percent of office buildings were among the least energy efficient building types, scoring the lowest rating (‘G’), with only 2 percent receiving an ‘A’ rating.
EPA publishes national end-of-waste criteria
The Environmental Protection Agency (EPA) has today published national End-of-Waste Criteria for elements of construction waste, which is Ireland’s largest waste stream. The criteria apply to ‘aggregates’ recycled from construction and demolition waste, including soil and stone, concrete, bricks and ceramics. The implementation of new criteria aims to reduce construction waste going to landfills and increase current low recycling rates. Further information on the criteria and other initiatives of the circular economy programme are available on the EPA website.
Green Agreements guidance launched by Competition and Markets Authority
The UK Competition and Markets Authority has launched new Green Agreements Guidance for businesses. The guidance explains how competition law applies to environmental sustainability agreements between firms operating at the same level of the supply chain, to help them act on climate change and environmental sustainability. The guidance includes additional practical examples that businesses can use to inform and shape their own decisions when working with competitors on environmental sustainability initiatives.
EBA revising capital rules to include ESG risks
The European Banking Authority (EBA) has published a report on the role of environmental and social risks in the prudential framework of credit institutions and investment firms. The report recommends targeted enhancements to accelerate the integration of environmental and social risks across ‘ Pillar 1’ (one of the three areas of focus of the Basel Framework which sets out capital requirements and risk measurements for global banks). The proposed enhancements aim to support the transition towards a more sustainable economy, while ensuring that the banking sector remains resilient.
Commission adopts new ETS Auctioning Regulation
The European Commission has adopted a new ETS Auctioning Regulation that sets out technical elements necessary for good organisation of auctions of greenhouse gas emission allowances under the EU’s Emissions Trading Scheme (ETS). The action follows the revision of the ETS Directive in the context of REPowerEU plan and the ‘Fit for 55’ legislative package to reduce Europe’s net greenhouse gas emissions by at least 55 percent by 2030. The main elements introduced in the new Regulation include the extension of the ETS scope, changes related to improvements regarding market oversight and transparency, and changes related to the rules regarding the notification of the voluntary cancellation of allowances by Member States under the ETS Directive. After a period of scrutiny by the European Parliament and Council the new regulation will be published in the Official Journal and enter into force thereafter.
Accountancy bodies publishes report for public sector sustainability
Three global accountancy bodies, ACCA, IFAC and IDI, have launched a publication on preparing for sustainability reporting in the public sector. The report, Preparing for Sustainability Reporting and Assurance - An introduction for the public sector globally, was launched at the World Investment Forum in Abu Dhabi, and outlines what sustainability reporting and assurance mean for the public sector, why they are important, and key principles for governments, SAIs and other public sector bodies to consider in this journey.
Asset owners and investor engagement
The Net-Zero Asset Owner Alliance (NZAOA) has released its third annual progress report. Increasing Climate Ambition, Decreasing Emissions. For the first time, the report by the 2019-founded alliance of global asset owners committed to ensuring their investment portfolios are carbon neutral by 2050, provides data on the membership’s absolute financed greenhouse gas emissions. It also reportedly shows a 3.5 percent decrease from 2021 to 2022 (from 221.2 mtCO2e to 213.4 mtCO2e) despite membership growth over that period.
Separately, however, Climate Action 100+, the world’s largest investor engagement initiative on climate change, has found that of the most companies it assessed against its newly updated ‘Net Zero Company Benchmark’ are not moving fast enough to align with the goals of the Paris Agreement and reduce investors’ risk. The results, a summary of which can be found here, reveal that while there is long-term ambition among the companies it surveyed, there is a lack of detailed plans of short-term actions. These include targets to reduce greenhouse gas emissions, CAPEX allocation and climate policy engagement.
Technical Updates
(From our colleagues in Professional Accounting)
- The European Parliament has voted to adopt the European Sustainability Reporting Standards (ESRS), paving the way for the standards to become effective, depending on a company size and nature, on a phased basis financial periods beginning on or after 1 January 2024.
- Several accounting standards boards, including in the UK and Australia, have jointly issued a letter to the International Sustainability Standards Board (ISSB) regarding its recent Agenda Consultation. The letter highlights common concerns, which include connectivity with accounting standards; strategic roadmap; and implementation priority.
- The Financial Stability Board (FSB) has published its annual progress report on climate-related disclosures, delivered to G20 Finance Ministers and Central Bank Governors for their 11-12 October 2023 meeting.
- The Financial Conduct Authority (FCA) has welcomed the publication of the Transition Plan Taskforce (TPT) Disclosure Framework.
Resources
(From our friends in Accounting for Sustainability)
New guidance has been published for pension fund chairs and trustees on managing nature-related risks and seizing opportunities for pension chairs and trustees: Managing Nature Risks and Investing in The Opportunities: Top Tips for Pension Fund Chairs and Trustees.
Out now
This month’s SustainabilityWorks Newsletter has issued, with news, top reads, videos, and sustainability jobs (subscribe here).
Did you know?
77 countries had their hottest September on record, according to climate science initiative Berkeley Earth. Read more.
Watch: Sustainable Supply Chains
In this 15-minute chat, Institute's Sustainability Officer Susan Rossney chatted to Shane Faulkner, KPMG's Sustainability Manager, about what why sustainable supply chains are important for SMEs, what questions SMEs might be asked by their customers and clients, and what they can do to prepare. Watch back here.
Listen
The cost of climate change: ‘almost like driving another budget through public finances’ (Irish Times, Inside Business Podcast) 38:51
Articles
- New electric car sales up 52% so far this year – CSO (RTÉ)
- UK boards prioritised experience over diversity last year, says headhunter (Financial Times)
- EU climate ministers back ‘polluter pays’ principle in agreed declaration for Cop28 negotiations (Irish Times)
- California requires companies to report carbon emissions (BBC News)
- New World Bank president signals that time is up on billion euro subsidies for fossil fuels (Euronews)
- More than 50,000 companies to report climate impact in EU after pushback fails (Financial Times)
- Green Fees Overtake Fossil Fuels for Second Straight Year (Bloomberg)
Upcoming Events
SustainExchange: What can you and your organisation do to help avert the climate crisis?
Panel discussion: Hybrid (in person/virtual): Tuesday 24 October.
Women in Business (Northern Ireland) Women in Finance
A session on women in finance which will focus on work in finance departments, small scale accountancy or working for yourself. Members and non-members are welcome to join this online event. Part of Women in Business wide-ranging programme of female entrepreneurship events over the upcoming months, including sectoral networking, webinars, and training courses for essential skills.
Virtual: Wednesday, 25 October, 10-11.30am.
Sustainable Finance Skillnet is offering funded training opportunities until October and November 2023 to Irish employees in the financial services sector at 30 percent of course fees (with 70 percent funding available for members of the International Sustainable Finance Centre of Excellence). A series of short, deep dive training modules on key sustainable finance topics include
• EU Taxonomy
• Net-Zero
• SFDR (Sustainable Finance Disclosure Regulation)
Chartered Accountants Ireland: ESG Masterclass: Take your Sustainability Knowledge to the Next Level
A 3-hour online masterclass providing a high-level overview of the key global, European and national regulations, standards and developments impacting sustainability governance, reporting and assurance, with an emphasis on areas highly relevant to accountants.
Virtual: Thursday, 26 October, 8.30-13.30, €206.25 (€165.00 Chartered Accountants Ireland Member Price)
Climate Finance Week Ireland 2023
Week-long summit.
In person and virtual: Monday, 20 November – Friday, 24 November
iQuest & Business Post Events: The ESG Summit
In person: Thursday, 9 November, Radisson Blu Royal Hotel, Golden Lane, Dublin
ICAEW Climate Summit
Week-long summit
Virtual: 13-17 November.
Innovate UK's showcase for climate tech event in Northern Ireland
Innovate UK is delivering a series of 18 'showcase for climate tech' events across the UK until September 2025. Each event focuses on a specific net zero theme or technology area. The Northern Ireland event, run in partnership with Business in the Community NI, will take place in Belfast on 6 December 2023 and will focus on digital solutions for net zero.
In person: 6 December
Certificate in Sustainability Strategy, Risk and Reporting
Classes start Wednesday 8 November
Due to popular demand, our Certificate in Sustainability Strategy, Risk and Reporting for accountants is back again in November 2023. Over 8 weeks, you'll cover key reporting frameworks and metrics, and learn to address the ESG opportunities and challenges that organisations already face.
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 Accountants Ireland 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: 25 October 2023
- 14.00-15.00/30
- 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.
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