News

Retaining chartered accountants on the Critical Skills Occupations list The Institute, under the auspices of the CCAB-I, responded to the public consultation launched by the Department of Enterprise, Trade and Employment to review the eligibility of occupations appearing on the Critical Skills Occupations List. Although chartered and certified accountants currently feature on this list, due to the ongoing capacity shortages being experienced across the profession, our response sets out reasoning for accountants to remain on this list going forward. Occupations included on the Critical Skills Occupations List are highly skilled occupations which are experiencing labour or skill shortages in respect of qualifications, experience, or skills and which are required for the proper functioning of the Irish economy. From our engagement with members, it is clear that despite active recruitment efforts, there is still a significant shortage of suitably qualified professionals to fill the number of current vacancies available in the market. As a result, this has led to an increased dependency on non-EEA hires to help bridge the gap left in the domestic labour market. CCAB-I believes that this problem will only be compounded by global trends and challenges, particularly in the areas of sustainability and climate change. Great reliance will be placed on the accounting sector to navigate these threats; thereby heightening the need for accountants to remain on the list. You can read the full submission here.        

In this week’s public policy bulletin, we provide an update on our recent nationwide members forums on the issue childcare in Ireland and Northern Ireland. We also take a take a look at some of our recent submissions to Government on policy issues such as the private rental sector and the right to request remote work. Members forums on childcare The Institute’s public policy team were delighted to meet with members over the past month at our Member Forums on the topic of childcare. Members from across the island shared valuable insights into how the current systems of childcare (both in the Republic of Ireland and Northern Ireland) have impacted their careers as working parents to date. Members also shared their opinions on how they feel the current systems of childcare supports could be improved to better assist working parents on both sides of the border.  We would like to express our sincere thanks to every member who attended these important forums (and others who submitted written comments) as we collate the feedback we received and develop our advocacy agenda on this hugely important topic.  If anyone would like to contribute further information to us, please email stephen.lowry@charteredaccountants.ie. Response to the Irish Government’s public consultation on its review of the private rental sector Last week, the Institute’s tax and public policy team, under the auspices of the Consultative Committee of Accountancy Bodies – Ireland (“CCAB-I”), submitted a response to the Government’s public consultation on the private rental sector. Our response outlined the pension policy implications arising from longer term renting and the overall decline in homeownership rates seen in recent years. Our comments also proposed a suite of new tax measures that would accelerate investment in retrofitting works by landlords, stem their exodus from the market, while at the same time improving security of tenure for tenants. You can read the full submission here. Submission to Ireland's Workplace Relations Commission on the development of a Code of Practice to govern requests for remote work   Following the passage of the Work Life Balance and Miscellaneous Provisions Act 2023, the Workplace Relations Commission (which has been tasked with the responsibility of drafting a Code of Practice to govern requests for remote working) launched a public consultation on the issue. The Institute’s public policy team provided a response to the WRC’s consultation in which we stressed the importance of the Code being produced in a timely fashion and moreover, in clear and unambiguous language. Doing so will be vital to ensuring that both employers and employees alike have a clear understanding of the framework within which they can exercise their rights, obligations and entitlements under the parent Act. You can read the full submission here.

In this week’s Sustainability/ESG bulletin, read how the European Commission has adopted the European Sustainability Reporting Standards. Also covered is the newest edition of Climate Essentials for Accountants, a survey into Irish SMEs’ sustainability investment profile, flooding relief for SMEs, IAASB's proposed Sustainability Assurance Standard, the release of the first science-based targets for nature, and how billions of economic activity is at risk due to climate change, as well as the usual roundup of articles, resources and events. New edition: Climate Essentials for Accountants The sense of urgency to address climate change is intensifying across the world. The third edition of Chartered Accountants Ireland’s Climate Essentials for Accountants has published to help demystify the vocabulary of climate action and introduce professionals to jargon that they will hear with increasing frequency over the coming months and years. Find the guide – along with other free resources for accountants, financial professionals and business owners – in the Climate Essentials section of the Chartered Accountants Ireland Sustainability Hub.  Taking action: How SMEs can adapt to climate change Recent European heatwaves have highlighted the impact climate change has on society and the economy. In this article in Accountancy Ireland, Chartered Accountants Ireland Sustainability Officer Susan Rossney explores the challenges facing Irish businesses when taking steps to tackle the crisis. Covering Ireland’s perception of climate change as well as barriers to action, the article describes the threats and opportunities that climate changes bring for business. European Commission adopts European Sustainability Reporting Standards The European Commission announced this week that it has adopted the European Sustainability Reporting Standards (ESRS), a significant milestone in the development of European Sustainability Reporting Standards. The standard will enter into force following its publication in the Official Journal of the European Union and the first wave of entities will report under the ESRS for periods commencing on or after 1 January 2024. The reporting requirements will then be phased-in over the subsequent years to various company types and sizes. Read more here. IAASB issues proposed Sustainability Assurance Standard The International Auditing and Assurance Standards Board (IAASB) has issued its proposed International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements. This is a principles-based, overarching standard suitable for both limited and reasonable assurance engagements on sustainability information reported across any sustainability topic. It is intended to work with various sustainability reporting frameworks (including the European Sustainability Reporting Standards and the IFRS Sustainability Disclosure Standards). Read more from our Technical Team. SMEs mostly to maintain or increase sustainability investments A bi-annual SME Sustainability Sentiment Survey carried out by Uisce Éireann has found that nine out of 10 Irish SMEs plan to maintain or increase investment in sustainability practices and solutions in the coming year. The survey, which involved over 350 SMEs, found that achieving cost savings was the most important key driver (55 percent) in influencing SME decision-making on investment in sustainability. ‘Satisfying customers’ desire for more sustainable products and services’ was the second driver at (43 percent), with more than half of Irish SMEs believing that operating a sustainable business attracts more customers. The study also examined the barriers that currently exist to investment, with 72 percent of SMEs identifying cost concerns and rising costs as the stand-out barrier to investing more in sustainability practices, along with a lack of information on sustainability practices and a lack of Government support. Emergency Humanitarian Support for small businesses affected by flooding - Donegal The Minister for Enterprise, Trade and Employment, Simon Coveney, T.D., has opened the Emergency Humanitarian Support Scheme to small businesses, sports clubs, community and voluntary organisations unable to secure flood insurance and affected by recent flooding in Co Donegal. Application forms for support will be available on the Irish Red Cross Society's website.  The announcement comes as twelve of Ireland’s weather stations reportedly saw record-breaking levels of rainfall in July, with 217 per cent of the expected amount of rainfall based on long-term average (LTA) data from 1981 to 2010. Ireland’s Climate Action Plan Progress Reports publishes The Irish Government has published a progress report on the Climate Action Plan 2023. The report highlights a completion rate of 63 percent on significant and reportable climate actions, including finalising the Offshore RESS auction. Many of the actions delayed in Q2 are expected to complete in Q3, including launch of the new Forestry Programme; and establishing a new SME retrofit scheme and Just Transition Commission. Funding for Belfast SMEs for ‘Grey to Green’ city project Capital support of up £50,000 will be available for the Grey to Green Demonstrator Project, a ‘city centre demonstrator project’ in Belfast. Expressions of interest are being sought from Belfast-based SMEs, community groups and schools with the expertise and capability to undertake for the project, as part of Belfast City Council’s A Bolder Vision for Belfast. The project will focus on urban farming, social gardening, or community food growing initiatives, with the possibility of using a council owned site, subject to approval. The first science-based targets for nature The first has science-based targets for nature have been released by the Science Based Targets Network (SBTN), a global coalition of 80+ environmental non-profits and mission-driven organisations. The targets will enable companies to start taking ambitious and measurable action on both climate and nature. Commenting, Erin Billman, Executive Director of the SBTN said “While climate change has become a key focus of many companies’ sustainability strategies, there is now clear scientific evidence that net zero is not possible without nature.” The targets are designed to build on companies’ existing sustainability strategies and proactively aligned with existing and upcoming standards and frameworks. Report finds $122 billion of economic activity at risk due to climate change A new study has found that extreme weather events are putting around $80bn of global trade and $122 billion of economic activity at-risk on average annually. The study, published in Nature Climate Change, examined impacts on global shipping, trade and supply chains caused by disruptions to ports from climate extremes in order to identify risks to global maritime transport, trade and supply-chain networks. Did you know? Food waste statistics for 2021 from the Environmental Protection Agency (EPA) show that Ireland wasted 753,000 tonnes of food waste. Businesses can sign up to the Food Waste Charter to pledge to measure, reduce and report their food waste.   Ainslie van Onselen, the CEO of Chartered Accountants Australia and New Zealand, has been named as the new chair of Chartered Accountants Worldwide. Described as ‘a milestone appointment,’ it marks the first time a woman has held the role. Glossary updates The Chartered Accountants Ireland sustainability glossary has been updated to include the global stocktake. Resources AICPA and CIMA have published a report, Accounting for Climate Resilience that aims to help finance professionals build their sustainability literacy so they can lead and support the journeys of their organisations, firms, and clients as they adapt business models and operations in response to increasing climate-related risks. Podcast The International Sustainability Standards Board (ISSB) has published its latest podcast discussing progress since the launch of IFRS S1 and IFRS S2, technical updates, the upcoming International Auditing and Assurance Standards Board (IAASB) consultation, and more. Listen on Spotify, YouTube or the IASB’s Podcast page. Articles Enterprise Ireland: Why sustainability must be a priority for Irish firms (Irish Independent) Industry calls on UK to accelerate carbon capture as new projects approved (Financial Times) ESG for SMEs: insurance premium rise key to change (ICAEW) B20: a chance to look at ESG reporting  - ICAEW has secured membership of the ESG Action Council at this year's B20. The summit comes at a time when policy support by governments and regulators is crucial (ICAEW) Upcoming events  Dublin Chamber: The Future of Sustainable Finance  The latest event in our Dublin 2050 series. Dublin has been steadily growing its reputation as a hub for sustainable finance in recent times, making significant progress in advancing sustainable finance practices and attracting investments aligned with ESG principles. This expert panel-led event aims to contribute to knowledge sharing, collaboration, and innovation within the business community. In person, 5 September, 8.30 – 10.00. Dublin Chamber, 7 Clare Street, Dublin 2 Dublin Chamber – Sustainability Academy Workshops Dublin Chamber has announced it will offer Sustainability Academy workshops in Autumn. Beginning  with a workshop on Sustainability/ESG 101 in September, the 3-hour Zoom workshops includes a free one-hour, post-workshop one-on-one advisory consultation per company with an expert advisor. Find out more here. InterTrade Ireland: The Shared Island Fund – Bioeconomy Demonstration Initiatives Funding opportunity Virtual, 14 September, 10:00 - 11:00. Environment Ireland’s: Environment Conference In person: 14–15 September,  Croke Park, Dublin Business Post LIVE/iQuest: Energy Transition Summit In person: 19 September, Croke Park, Dublin ESDN: European Sustainable Development Week (ESDW) 2023 18 September – 08 October. 113 initiatives in 10 countries. DETE: Building Better Businesses North-East Event, Dundalk Institute of Technology The latest in the series of Building Better Business events organised by DETE across the country to help businesses focus on the opportunities and challenges presented by the green economy and digital transformation. This event is open to businesses based in the North East. In person: 22 September, 9.00 - 1.00 -  Multi-Purpose Centre (MPC), Faulkner Building, Dundalk Institute of Technology. Climate Finance Week Ireland 2023 In person and virtual: Monday, 20 November – Friday, 24 November 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: 23 August 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.

The International Auditing and Assurance Standards Board (IAASB) has issued its proposed International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements. This proposed standard will now undergo a consultation period running until 1 December 2023 and stakeholders are encouraged to respond and share their feedback to the proposed standard. ISSA 5000 is a principles-based, overarching standard suitable for both limited and reasonable assurance engagements on sustainability information reported across any sustainability topic. It is intended to work with various sustainability reporting frameworks (including the European Sustainability Reporting Standards and the IFRS Sustainability Disclosure Standards). The standard is drafted as a profession agnostic standard and should be suitable for use by accountant and non-accountant assurance practitioners. With the sustainability reporting requirements for certain entities set to increase over the coming years, a standalone sustainability standard is seen as a key piece of the framework to help ensure that users of sustainability information can place greater trust in the information they are consuming on an entities Environmental, Social and Governance impacts. In launching the consultation, IAASB Chair Tom Seidenstein commented “Our proposed ISSA 5000 is a crucial step in enhancing confidence and trust in sustainability reporting. This proposal directly responds to the International Organization of Securities Commissions recommendations and complements the work of other standard setters, including the International Ethics Standards Board for Accountants,”. The comment period remains open until 1 December and the IAASB are seeking a broad range of views on the standard to gather the views and insights needed to finalise it.

Recent European heatwaves have highlighted the impact climate change has on society and the economy. Susan Rossney explores the challenges facing Irish businesses when taking steps to tackle the crisis Recent severe heatwaves in continental Europe have shown how the effects of global warming are coming ever closer to home. Forced migration, drought, forest fires and biodiversity loss are some of the many ways climate change will impact Irish society.  Its impact on the economy will be acute, affecting everything from the health and wellness of employees to the cost of raw materials, scarcity of resources and supply chain disruption.  Ireland and climate change Climate change poses risks to humans, nature and Ireland as a nation.  Ireland is legally bound to meet ambitious national and international climate targets. According to the Climate Change Advisory Council (CCAC), an independent advisory body, Ireland will not meet the climate targets it has set for itself in the first and second carbon budget periods. The Environmental Protection Agency’s (EPA) provisional estimates on 2022 greenhouse gas emissions show that Ireland already used 47 percent of the carbon budget for 2021–2025 in the past two years.  An annual reduction of 12.4 percent is now required for each of the remaining years if Ireland is to stay within budget.  However, as emissions fell only 1.9 percent in 2022, this has been described as “extremely challenging” by the EPA.  It is clear that action is required across all sectors of the economy and society, including: Mitigation: reducing activity that causes climate change, like burning fossil fuels (coal, oil and gas); and Adaptation: making changes to deal with the effects of climate change, from operational changes to cope with rising summer temperatures or winter flooding to factoring in the risk of developing stranded assets and increased carbon tax liabilities. Ireland’s perception of climate change According to Climate Change in the Irish Mind, EPA research conducted in 2021, most Irish citizens share a desire for action on the climate crisis.  However, other EPA research has found that our emissions of greenhouse gases (GHGs) continue to rise.  Environmental Indicators Ireland 2022, published by the Central Statistics Office (CSO), shows that Ireland’s 2022 emissions were 11 percent higher than in 1990.  Enterprises contributed an estimated 12.7 percent to Ireland’s overall emissions in 2018, according to the Climate Action Plan 2023. Although this is less than the contributions of other sectors, there remains a need for Ireland’s enterprises to take action to reduce their emissions.  However, a 2022 national survey of 380 SMEs and larger enterprises across industry and service sectors by Microsoft and University College Cork found that Irish businesses are underprepared to make the necessary changes to transition to a net zero future. According to the study, 86 percent have no commitments or targets to decarbonise.  Barriers to action  In the face of evidence of climate change – and Ireland’s willingness to take action – what is preventing Irish businesses from responding to the crisis?  As an issue, climate change is complicated, abstract and overwhelming. Multiple interdependent factors cause it, and it is nearly impossible to avoid contributing to it in our daily lives. Buying products, driving a car or taking a flight for a foreign family holiday (full disclosure: I’m just back from one) all add to the overall problem. The solutions to the climate crisis are also interdependent and complicated. The positive changes we can make as individuals can feel insignificant, especially compared with large countries’ continued pollution.  The European Commission’s Annual Report on European SMEs 2021/22 – SMEs and environmental sustainability identified access to finance, limited expertise and skills, and regulatory and administrative barriers among the challenges facing SMEs in particular. Businesses that want to take climate action often have limited time, cash flow, resources and support (both financial and non-financial) to take action.  Knowledge is also a barrier. Many professionals qualified at a time when climate change was not identified as a business risk. They now find themselves having to skill up mid-career in an area that is famous for changing frequently.  Finally, many citizens and businesses are still struggling with crises related to COVID-19, inflationary pressure, supply chain disruption and high energy costs. Staying afloat is a crisis in itself.  Firms, particularly SMEs, focusing on the practicalities of running a business, paying staff and grappling with cash flow and costs are more likely to see climate action as the responsibility of governments or, at the very least, large corporations rather than them.  On top of that, climate discussions are often politicised. They are regularly reduced to a ‘them vs us’ polarised debate in mainstream media rather than discussing how everyone can work together to deliver solutions.  Threats and opportunities  For businesses, climate change presents both threats and opportunities.  Threats The threats have been categorised as physical risks (both ‘acute’ and ‘chronic’) and transitional risks.  Opportunities  Taking action on the climate crisis enables businesses to restore lost ecosystems, improve air quality, community health and well-being, and avail of the opportunity to make a lasting positive impact. There are additional advantages to consider: Reduced costs – the Sustainable Energy Authority of Ireland (SEAI) estimates that the average SME can save up to 30 percent on its energy bill by becoming more energy efficient (improved heating and lighting, lower maintenance of electric vehicles, efficient water and materials management and using recycled materials with a lower climate impact all contribute to lower costs);  Reduced reliance on exposure to fluctuating oil and gas prices from switching from fossil fuels (coal, oil and gas) to renewable energy sources; Reduced exposure to carbon tax, which is increasing €7.50 per tonne to €100 per tonne in 2030; Access to grants, allowances and tax reliefs; Improved access to capital and finance from investors and lending looking to ‘green’ their portfolios; and A competitive edge in attracting talent, clients and customers. Steps to climate action Businesses looking to take action on the climate crisis can take several steps: Build your knowledge. There are many resources out there, several provided by the Government and Chartered Accountants Ireland. Begin measuring emissions with tools like the Government’s Climate Toolkit for Business.  Consider an internal energy audit to find ways of reducing your carbon footprint. SEAI maintains a list of registered energy auditors and offers SMEs a €2,000 voucher towards the audit cost. Consider setting up an internal environment and climate impact team to devise a decarbonisation plan.  See also the Sustainability Glossary in the Sustainability Centre of the Chartered Accountants Ireland website.  For more, see www.charteredaccountants.ie/sustainability-centre/sustainability-home Susan Rossney is Sustainability Officer at Chartered Accountants Ireland Reporting and climate change The Corporate Sustainability Reporting Directive (CSRD) is an EU Directive requiring certain companies to disclose information on sustainability-related impacts. It proposes significant changes to how entities report on their business’s environmental, social and governance (ESG) impacts. These changes will affect many enterprises – directly and indirectly.  Businesses ‘in scope’ of the CSRD are required to consider their supply chain when reporting on sustainability matters. This will mean that companies not in scope that form part of a supply chain may be asked to provide climate-related information by companies in scope. Small companies should prepare for this and have a mechanism to measure and disclose their carbon emissions. For more on the CSRD, see the Chartered Accountants Ireland Technical Hub. Dee Moran is Professional Accountancy Lead at Chartered Accountants Ireland  

The European Commission (EC) has adopted the European Sustainability Reporting Standards (ESRS) on 31 July 2023. This marks a significant milestone in the development of European Sustainability Reporting Standards and is the culmination of great effort from the various parties tasked with its development- including the EFRAG Sustainability Reporting Board, the EFRAG Sustainability Technical Expert Group, its initial Project Task Force and respondents to the recent consultations on the ESRS. The EC has also published a press announcement and Q&As and have indicated that additional implementation guidance will be prepared and made available over the coming months. The standard will enter into force following its publication in the Official Journal of the European Union and the first wave of entities will report under the ESRS for periods commencing on or after 1 January 2024. The reporting requirements will then be phased-in over the subsequent years to various company types and sizes. If you wish to find out more about the ESRS, please see our recent free webinar "Further your knowledge about the European Sustainability Reporting Standards"