2025 is already seeing changes that are reshaping our future. ESG principles are experiencing political pushback in some regions, and a doubling-down on actions and investments in others. January fires in LA, storms in Ireland, changing regulatory frameworks, shifts in global power and advancements in artificial intelligence show that the trends of 2025 are poised to redefine our lives. The landscape in 2025 underscores a crucial truth: sustainability is no longer optional but essential for business resilience, competitiveness and long-term success.   A dangerously divided world The World Economic Forum (WEF) at Davos this year saw world leaders describing a “dangerously divided and ideologically incoherent” world. State-based armed conflict topped the list of risks likely to present a material crisis on a global scale in 2025 in the forum’s Global Risks Report 2025. Extreme weather events, geoeconomic confrontation, misinformation & disinformation, and societal polarisation remained the highest short-term risks. Longer-term (10 years) the top four risks identified were extreme weather events, biodiversity loss and ecosystem collapse, critical change to Earth systems, and natural resource shortages.   This divided world is reflected in the polarisation of opinion on ESG. Political pushback against ESG in some regions – notably the US – is being met by a doubling-down on actions and investments in others like China as the global value of ESG assets is still expected to reach $35 - $50 trillion by 2030.   Political change US President Donal Trump has signalled an anti-ESG era in American policies and attitudes, but it is not as simple as ‘turning ESG off’. Many of the new governments elected in 2024 remain committed to ESG-related principles in some form. The UK’s new Labour government has introduced several policies to support a 2050 net zero goal. Ireland’s new Programme for Government continues to commit Ireland to accelerating progress towards achieving the 17 Sustainable Development Goals (SDGs). It also plans to further develop the sustainable finance sector, renewable energy and upskilling and training, and provide more supports for industry to decarbonise and embrace a circular economy. The EU’s landmark 2024 Draghi Report drew parallels between the bloc’s future long-term competitiveness and decarbonisation and social justice. The recently released EU Competitiveness Compass framework aims to “rekindle economic productivity and secure the EU’s competitive edge” through an Affordable Energy Action Plan, a Clean Industrial Deal, an Industrial Decarbonisation Accelerator Act and action plans for energy intensive sectors (such as steel, metals, and chemicals).  Although certain large companies called for the EU not to re-open negotiations on sustainability reporting and due diligence legislation to ensure that much-needed certainty prevails, the EU announced its ‘Omnibus’ package this week to simplify the EU Taxonomy, the Corporate Sustainability Reporting Directive (CSDD) and the Corporate Sustainability Due Diligence Directive (CSDDD). Despite fears that the measures will weaken transparency and negatively impact private investment in green projects, the European Commission insists the package will make sustainability reporting more accessible and efficient, and will mobilise €50 billion in additional public and private investment.  The Omnibus is expected to be the first milestone of many as the EU works to balance competitiveness and resilience with achieving sustainability results and acting as a ‘guiding light’ for other jurisdictions and markets.   The renewable energy revolution continues  In 2023, the world passed a clean energy milestone as a record-breaking 30 percent of the world’s electricity was produced by wind and solar power. The revolution in renewable energy shows little signs of slowing, a trend driven by economics rather than government policies, according to Fatih Birol executive director of the International Energy Agency (IEA). True, the EU and US are likely to take diverging paths, but Marie Joyce, COO and CFO of NTR plc maintains that while the pathways may differ, the global transition to sustainable energy remains an inevitable and necessary shift, driven by both economic and environmental imperatives. “The US experienced a surge in energy transition investments over the past couple of years under the Biden administration, largely due to the Inflation Reduction Act. However, that momentum is likely to slow as investors grow wary of potential policy shifts under Trump. This pattern of fluctuating commitment to energy transition has long been a feature of the US landscape, yet the industry has continued to grow. Despite heightened uncertainty, this growth is likely to persist, while Europe's approach will remain steady—because we simply have no viable alternative.” Europe has maintained a clear and consistent policy centred on reducing reliance on fossil fuels, and in 2024 produced more electricity from solar than coal for the first time. This, Joyce notes, is partly driven by decarbonisation goals, but is primarily motivated by the need to ensure energy resilience and mitigate the volatility of energy costs. The International Energy Agency (IEA) expects the world to add 5,500 GW of renewable energy capacity between now and 2030. This global trend is visible in national policies. Despite cries of ‘drill, baby, drill’, renewable energy sources are expected to meet almost half of all electricity needs globally by the end of this decade. The UK closed its last coal-fired power plant in 2024, and China is forecast to make up at least half of the world's cumulative renewable electricity capacity by the end of the decade. Ireland’s Programme for Government aims to achieve ‘energy independence’ via renewable energy resources with a goal to achieve 80 percent of Ireland’s electricity generation from renewable sources by 2030. The High Court recently ruled  that planners had failed to comply with climate law by not attaching enough importance to the need for renewable energy as a climate action measure when denying a wind farm planning permission. This underscores the strength of climate legislation and could significantly boost renewable energy projects while hindering developments that increase greenhouse gas emissions.   The economic and social need for the low-carbon transition Transitioning to a low-carbon economy and society is vital for economic as well as environmental reasons. Recent reports from the World Economic Forum warn that climate inaction could cost businesses up to 7 percent of annual earnings by 2035. As Ani Dasgupta, president of the World Resources Institute, puts it: “Walking away from the Paris Agreement won’t protect Americans from climate impacts, but it will hand China and the European Union a competitive edge in the booming clean energy economy.” Global companies like IKEA have likewise acknowledged that decarbonisation is essential for both business viability and environmental responsibility. In Ireland, the Irish Fiscal Advisory Council warns that failure to meet our emissions targets will lead to compliance costs of circa €0.35 billion annually to 2030 and €0.7 billion annually thereafter. In its December 2024 Fiscal Assessment Report in December 2024 it warned that the climate transition is the second largest budgetary challenge Ireland faces after ageing: “The climate transition raises challenges, but doing nothing has substantial costs. If Ireland fails to reduce its emissions, as it currently looks set to by a wide margin, it may have to transfer large amounts of money to neighbouring countries. This would be in the form of the government being required to purchase statistical transfers or credits. A recent report by T&E (2024) suggests Ireland’s costs could be between €1.7 and €9.6 billion by 2030. However, these estimates assume Ireland follows through on measures that it looks increasingly unlikely to implement. If these measures were not implemented, then the State would be further from its climate objectives and would face much higher compliance costs, potentially as high as €20 billion.”   Skilling up to meet demand To achieve this transition companies are likely to continue to build skills in 2025 to meet market demand to fill the growing number of jobs required. In the US there are at least 10 million jobs in the green economy, compared with 300,000 in the fossil fuel industry, and organisations globally are building climate literacy among employees and board members. In Ireland, demand for green talent grew by over 22.1 percent in 2024 – well above the global average of 11.6 percent – according to a report published by the IDA. This trend is likely to continue in 2025. Grace Cartin ACA, Audit & Assurance Partner with Deloitte in Belfast, notes that ESG is becoming a significant growth area for audit and assurance teams across Ireland. “ESG requires a new skillset be developed by firms, as the evolving assurance requirements call for specialised expertise in the market. We have responded by upskilling current audit team members. This focus on upskilling and gaining experience in areas beyond ‘traditional’ audit services helps address the challenges of skills and talent retention. It also provides employees with a more diverse range of experiences and career opportunities.  As a result, Deloitte is turning the skills and talent challenge into an opportunity by developing talent internally and offering a broader career path.” The need to build skills is being addressed by professional accounting bodies. Chartered Accountants Ireland’s Director of Education Ian Browne explains: “as financial reporting and auditing and assurance broadens to take in the scope of its sustainability obligations, this will be reflected in the professions’ qualification curriculum.” “We have seen a considerable uptick in demand for sustainability training over the past two years”, says Joseph Carroll, Head of Professional Development with Chartered Accountants Ireland. “There’s a real appetite among finance professionals for in-depth knowledge skills for use on the job, particularly on double-materiality assessment. It’s a trend we expect will continue into 2026 and 2027.”   The need for ‘trail-blazing’ climate action “Blazing temperatures in 2024 require trail-blazing climate action in 2025,” UN Secretary-General António Guterres announced, as he called on the world “to fight even harder to get on track”. All indicators point to a relentless rise in global temperatures to continue in 2025, meaning that both mitigation (reducing harmful emissions) and adaptation (adapting to the effects of climate change – wildfires, flood, droughts, migration, costs, and more) have never been more necessary. The need for adaptation by businesses to climate events or face significant costs grows ever more urgent.  Global heating is driving both extreme droughts and floods with rapid switches – the so-called ‘whiplash effect’ – between extremely wet and dry conditions. This effect is increasing exponentially around the world, and is said to have catalysed the Los Angeles wildfires in January which is likely be one of the costliest natural disasters in US history.  According to global reinsurer AON economic losses resulting from natural disasters in 2024 amounted to $368 billion, making 2024 the ninth consecutive year of losses exceeding $300 billion. In Europe, the European Environmental Agency (EEA) predicts that weather- and climate-related extremes will see economic losses of assets increase as severe events intensify further. In a report published in December, the European Central Bank and European Insurance and Occupational Pensions Authority warned that climate change is increasing the frequency of natural disasters with multibillion euro costs being left uncovered by insurance. They advised the EU to create a taxpayer-funded disaster relief fund and a publicly-backed reinsurance scheme to fill the growing gap for insuring against these natural catastrophes. In Ireland, the national adaptation platform, Climate Ireland, warns that flooding poses a serious threat, particularly along the coast where most of the population and infrastructure is concentrated. Scientists in the University of Galway have warned that Ireland’s future weather will be even warmer and wetter than previously predicted and a survey shows that dealing with flooding or storms is likely to cost Ireland’s insurance industry up to €1.5 billion over the next decade. The Central Bank of Ireland’s 2024 Flood Protection Gap Report estimates the average annual cost of inland (river and surface water) flooding is €101m, with a €510m loss expected about once every 25 years. As well as too much water, too little water is likely to cause business disruption both within and beyond a business’s immediate locality. For example, 40 percent of facilities that make semiconductors – a core component of enabling technologies critical to economic growth, national security, and global competitiveness – are based in regions likely to be significantly impacted by severe water stress. No surprise, then, that supply chain resiliency was found to be the fastest-growing investment priority for businesses in a global survey by The Capgemini Research Institute.   Nature and biodiversity and business Nature and biodiversity information will be crucial for businesses in 2025. Fifty-five percent of the world’s GDP, equivalent to an estimated $58 trillion, is moderately or highly dependent on nature and biodiversity, both of which are fundamental to long-term business survival. Ecosystems accounting and nature-based solutions (i.e. managing, protecting or restoring ecosystems, to benefit both biodiversity and people) are also expected to gain momentum in 2025 as a means whereby business can address both climate and biodiversity challenges. The Central Statistics Office published a full set of ecosystem accounts for one of Ireland's ecosystems (Forests and Woodlands) for the first time in 2024, with details of the ecosystem services they provide. At a policy level, the EU Nature Restoration Law, enacted in last year, requires Member States to submit a Nature Restoration Plan to the European Commission by 2026, and sets binding targets to restore degraded ecosystems, particularly those with the most potential to capture and store carbon. Ireland’s National Biodiversity Action Plan aims to have 900 businesses involved in the Business for Biodiversity platform by 2025 to enhance private sector action on biodiversity. Companies themselves are increasingly recognising the importance of protecting natural ecosystems, not only to mitigate risks but also to seize opportunities for innovation and resilience. Companies in scope of the Corporate Sustainability Reporting Directive (CSRD) must disclose their impacts, risks, and opportunities related to nature and biodiversity against ESRS 4. Outside of CSRD, many other companies are voluntarily disclosing their nature-related issues to investors using recommendations from the Taskforce on Nature Related Financial Disclosures (TNFD). As these reporting obligations ‘trickle-down’ to the level of the SME sectors, companies across the economy are finding themselves asked to provide key customers with nature-related information, often for the first time, for fear of losing valuable contracts. With more business coming into scope of these regulations in the coming years, understanding a businesses’ impacts and dependencies on nature has never been more important.   Sustainability Reporting…. The advent of reporting frameworks globally, both voluntary and otherwise, mean that more and more companies will develop and publish detailed sustainability reports in 2025. The first wave of CSRD reports, publishing in early 2025, are likely be subject to a high level of scrutiny from stakeholders, particularly as to how the companies approach Double Materiality Assessments (DMA). While there have been changes proposed with the recenty ‘Omnibus’ package, other companies can look to the first wave examples if they face the same challenges in terms of establishing their DMA approach, as well as collecting and managing the data. “Accountants have a critical role to play in assisting companies in, both large and small, with this work”, notes Dee Moran, Head of Professional Accountancy at Chartered Accountants Ireland. “We are continuing to monitor developments on behalf of our members.” Meanwhile there are useful resources that members can look to. IBEC and Davy have published a toolkit for understanding and implementing the CSRD requirements, for both organisations in scope looking to refine their reporting practices, as well as the small enterprises beginning their sustainability journey who may not be in scope directly. …and Assurance In Ireland, assurance of sustainability information in reports will be conducted by statutory auditors who are also approved as sustainability assurance providers. Companies will need to have their sustainability reports assured to increase the confidence of external users in the accuracy and reliability of their ESG disclosures in line with the required standards. Chartered Accountants Ireland has issued Audit Regulations (incorporating assurance under CSRD), and Guidance, Ireland (October 2024) setting out the Institute’s regulatory framework for the approval and regulation of statutory auditors who are approved to carry out sustainability assurance.  Chartered Accountants Ireland also revised the CPD Regulations with effect from 1 January 2025, which now specifically mention 'sustainability assurance' as a subject area in which a member who is working in practice should undertake CPD if that member is involved in work of this nature.   Useful resources include Accountancy Europe’s new webpage of FAQs: fundamentals to assurance on sustainability reporting. The International Federation of Accountants (IFAC) and the We Mean Business Coalition (WMBC), together with the Global Accounting Alliance (GAA), have also published a report titled ‘Building Trust in Sustainability Reporting and Preparing for Assurance: Governance and Controls for Sustainability Information’.   Sustainable Finance and Governance The sustainable finance landscape will continue to evolve in 2025, as companies aim to fund sustainability improvements and capture opportunities. Sustainable investing is expected to gain prominence globally, with ESG ratings play an increasingly central role. emerging initiatives in transition finance should be availed of. In 2025, Ireland’s sustainable finance sector is likely to see significant advancements, driven by the implementation of the Ireland Sustainable Finance Roadmap, which aims to position Ireland as a global leader in sustainable finance. There is likely to be a growing appetite for sustainable projects and climate investments in Ireland in 2025, as well as in green lending (AIB saw green lending grow to €3.7 billion, accounting for 30 percent of total new lending last year, and aims for 70 percent of new lending to be green by 2030). The Cambridge Institute for Sustainability Leadership (CISL) has published a guide for investors to build climate resilience within their portfolios, and confidence in sustainability governance had grown significantly year-on-year according to the annual survey of directors and executives from around the world conducted by INSEAD Business School. Strong sustainability governance is being driven by multiple stakeholders, including investors and lenders, regulators, and customers. Níall Fitzgerald, Head of Ethics and Governance with Chartered Accountants Ireland, highlights that “sustainability reporting and assurance are critical elements, but organisations will also be judged by their actions. These include managing elements of governance from sustainability strategies to skills throughout the organisation, resources, effective risk management, and strong internal controls.” He adds “Chartered Accountants Ireland’s work with Chapter Zero Ireland and Accountancy Europe indicates a strong commitment in 2025 by directors of all organisations in private, public, and non-profit sectors to upskill in sustainability governance to keep up with the pace of change”. Another platform for raising sustainable finance that is expected to remain in news this year is the voluntary carbon markets (VCMs). Talks at the 2024 global climate summit COP29 in Baku, Azerbaijan, finally agreed on new rules which would allow the launch of a centralised accounting system, run by the UN, allowing for countries and companies to begin offsetting their carbon emissions and trading those offsets.   Sustainability and SMEs (and small accounting practices) While most small to medium enterprises (SMEs) are not yet in scope of sustainability reporting regulations, sustainability has grown in relevance for many of their customers or clients. Companies obliged to disclose their own environmental, social and governance (ESG) information and that of their supply chain are increasingly requiring SMEs to provide ESG information or risk losing the contract or tender.   While formerly the preserve of large accounting practices, advising on climate and sustainability is now ‘trickling down’ into small/medium accounting practices (SMPs). Accountants are increasingly finding themselves ‘accounting for sustainability’ in their own practices, and measuring climate-related impacts, risks and opportunities for their clients. SMPs, the trusted (and sometimes only) advisor to SMEs either in scope of new legislation or in the supply chains of in-scope companies, may find themselves playing a stronger role in the SME sector in 2025 to help bridge the knowledge gap that exists of the growing importance and complexity that climate change presents for Irish business. Chartered Accountants Ireland is continuing its series of workshops for SMEs and Small to Medium Sized Accounting Practices in 2025, with the next workshop taking place on 23 May.   Public procurement SME in particular are likely to be affected by ‘green public procurement’, the process whereby public bodies seek to procure goods, services and works with a reduced environmental impact throughout their life cycle when compared to goods, services and works with the same primary function that would otherwise be procured. As the Government of Ireland’s annual public sector purchasing accounts for 10% to 12% of Ireland’s GDP, procurement has been identified as having a key role in helping Ireland become more resource efficient. A new Green Public Procurement Strategy and Action Plan 2024-2027 was published in 2024. It aims to play a key role in driving the implementation of green and circular procurement practices across the public sector.  Delivery of a new Green Public Procurement Strategy and Action Plan is an important commitment in the Government’s Climate Action Plan 2023. This plan includes, among other things, a mandate to accelerate Green Public Procurement implementation.   AI and ESG In 2025, two megatrends, AI and sustainability, are expected to converge to redefine how businesses address environmental and social challenges. The UN Global Compact and Accenture have developed a guide to accelerating sustainable development with technology in GenAi for the Global Goals, which outlines ways that artificial intelligence can be used to advance sustainability. Automating reporting and improving data quality with better data extraction and analysis and predictive modelling are just some of the ways in which AI and blockchain might revolutionise sustainability reporting in 2025 and beyond. Significant growth in data centres to power data centres for AI computing has also led to a debate around nuclear energy. Tech giant Microsoft last year entered into a power purchase agreement with Constellation Energy enabling the restart of the Three Mile Island Unit 1 nuclear reactor in Pennsylvania in order to meet the company’s goal of having 100 percent of its electricity consumption, 100 percent of the time, matched by purchases from zero carbon energy sources by 2030. Google has signed a deal to use small nuclear reactors to generate the vast amounts of energy needed to power its artificial intelligence (AI) data centres.   Tax and ESG In 2025, tax and ESG are likely to converge more closely as regulatory frameworks increasingly integrate sustainability into tax policies. Ireland’s Programme for Government has committed to retain the planned increases in carbon tax, with a planned rise of €7.50 per tonne of CO2, to fund initiatives such as social welfare programmes and a national retrofitting scheme. For some companies, tax could be considered as a material sustainability topic given the significance of tax contributions to society and heightened investor scrutiny on tax. Under CSRD, companies must disclose information about their business model, strategy and value chain, highlighting how their tax practices align with their ESG commitments.  Surveys are showing how many companies have already involved their tax departments in CSRD implementation, with more signalling plans to do so in 2025 and beyond. “Tax is a key lever for governments in accelerating the green transition” says Gearóid O’Sullivan, Head of Tax, Chartered Accountants Ireland. “As such, we can expect tax advisors to play an ever-increasing role in assisting businesses navigate each ESG pillar to support the transition to a green, net-zero economy. The role of the advisor in managing the complexity of this transition has never been more crucial.” Litigation              Climate and environmental issues are likely to come before the courts once again in 2025 as a ‘surge in greenwashing litigation’ is predicted, with cases challenging companies’ claims about their climate commitments or sustainability efforts. According to Climate Change Litigation Databases of the 224 suits against corporations, 73 are for misleading advertising. In Ireland a new division of the High Court has been established that is dedicated to Planning and Environmental cases saw its live caseload increase by 73 percent from October 2023 to November 2024.   Diversity, Equity, and Inclusion In 2025, DEI (Diversity, Equity, and Inclusion) in the workplace is expected to continue to focus on creating more inclusive and equitable environments. Despite some companies scaling back their DEI efforts due to external pressures, particularly in the US, many others are doubling down on their commitments.  “Companies that scale back on DEI efforts risk not only regulatory scrutiny but also falling behind competitors who embrace inclusive practices” according to an article on navigating backlash and progress in 2025 in FT Longitude, which states that “The future of work will be defined by organisations that embrace complexity and lead with inclusion.” Dee France, Wellbeing and Support Lead at Chartered Accountants Ireland and Chair of the Chartered Accountants Worldwide Wellbeing Taskforce, agrees that embracing diversity, equity, and inclusion (DEI) should be seen as more than a moral obligation: “Despite the early pushback on DEI initiatives by the new Trump administration, it is a strategic necessity. It drives innovation, boosts financial performance, and equips organisations for sustainable success in an increasingly complex and interconnected world. Globally, companies with above-average diversity on their executive teams are 36 percent more likely to outperform their peers financially, according to McKinsey.” An inaugural global report into the resilience of the Chartered Accountancy profession conducted by Chartered Accountants Worldwide Wellbeing Taskforce (in collaboration with the Resilience Institute) has also found that targeted skill development and resilience-training is needed foster a thriving and sustainable profession in the face of challenges such as multitasking, avoidance, and worry, which can erode resilience and mental health. New rules to improve gender balance in corporate boards have also entered into application in the EU, with the Gender Balance on Corporate Boards Directive aiming for a more balanced gender representation on the boards of listed companies across all EU Member States. The Directive sets a target for EU large listed companies of 40 percent of the underrepresented sex among their non-executive directors and 33 percent among all directors. The deadline for the transposition by Member States was 28 December 2024, and companies must meet the targets by 30 June 2026.   Collaboration With some notable exceptions (like the exodus of US banks from the Net-Zero Banking Alliance) the growth of collaboration within and across industries is expected to grow in 2025. “Collaboration across industries, governments, and civil society will be paramount in addressing the multifaceted challenges”, according to the International Institute for Management Development (IMD), and will enable companies to share information on evaluating impacts, risks and dependencies and opportunities. In late 2024, the UN Global Compact Network launched an Ireland branch, connecting Irish businesses to a global movement dedicated to advancing sustainable business practices and aiming to achieve the UN Sustainable Development Goals (SDGs). Membership of this network is expected to grow in 2025 as companies seek support to achieve ambitious goals and become more resilient.     Chartered Accountants Ireland will continue to provide thought leadership, education and lifelong learning and training to our members and to the wider business community as a leading business voice on sustainability in Ireland. You can keep up to date with on sustainability with information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre at Chartered Accountants Ireland  

In its release of the eagerly awaited “Omnibus” proposals on 26 February, the European Commission (EC) has proposed some significant changes to its Sustainability Reporting Regulatory framework. In recent years, many Irish and European companies have been getting to grips with EU Sustainability Directives and Regulations, including the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy Regulation. These have introduced (or are due to introduce) compliance and reporting requirements for companies falling within their scope. The proposed Omnibus legislation aims to simplify the administrative burden created by the CSRD, the CSDDD and the EU Taxonomy. In releasing the proposals, the EC noted that they will enable businesses “to grow and create quality jobs, attract investments and get the necessary funds for their transition towards a more sustainable economy and help the EU meet the Green Deal's ambitious objectives”. The Omnibus package includes; A proposal for a Directive amending the CSRD and the CSDDD. A proposal which postpones the application of all reporting requirements in the CSRD for companies that are due to report in 2026 and 2027 (so-called wave 2 and 3 companies) and which postpones the transposition deadline and the first wave of application of the CSDDD by one year to 2028. A draft Delegated act amending the Taxonomy Disclosures and the Taxonomy Climate and Environmental Delegated Acts (subject to public consultation). A proposal for a Regulation amending the Carbon Border Adjustment Mechanism Regulation. A proposal for a Regulation amending the InvestEu Regulation. CSRD While the proposed Omnibus legislation includes changes to several key pieces of EU legislation, arguably the most impacted area will be the CSRD. Some of the key changes proposed to this Directive include; An increase in the thresholds limits which result in a large company being “in-scope”. This is expected to reduce the number of companies in-scope by approximately 80%. Under the proposed Omnibus legislation, the CSRD reporting requirements will only apply to large undertakings with more than 1,000 employees- ie. an undertaking with; 1,000 employees and either Turnover greater than €50m, or Balance sheet total greater than €25m Listed SMEs will no longer be required to mandatorily report under the CSRD. The introduction of a “Value chain cap”. Companies who are not in-scope of the CSRD will be able to use a voluntary standard (based on the VSME standard developed by EFRAG). This standard will serve to limit the information that CSRD reporters can request from non-CSRD reporters in their value chain. Companies who do not fall in-scope as a result of the revised thresholds may still voluntarily adopt the above-mentioned standard. A commitment to simplify the European Sustainability Reporting Standards (ESRS), including, a reduction in the number of datapoints, clarification of provisions which were deemed unclear and an improvement in consistency with other pieces of legislation. A reversal of the plan for sector-specific standards to be developed and adopted by the European Commission. A change in proposed assurance requirements for Sustainability Reports prepared under the CSRD, with the plan to move to reasonable assurance at some point in the future removed. A postponement of reporting requirements for “wave 2” and “wave 3” companies by 2 years. These waves will now enter into scope for financial years commencing on or after 1 January 2027 and 1 January 2028 respectively. CSDDD In relation to the CSDDD some of the key changes include proposals to; Extend the transposition deadline by one year, to 26 July 2028, and advance the adoption of the guidelines by one year (to July 2026), thereby giving companies more time to prepare. Simplify sustainability due diligence requirements, examples of this include focusing systematic due diligence requirements on direct business partners and reducing the frequency of periodic assessments and monitoring of their partners from annual to five years. Limit the amount of information requested by large companies from their value chain, thereby reducing the burden on SMEs and small mid-caps (250 – 499 employees and either turnover < €100M or Balance Sheet < €86M). Improve the harmonisation of due diligence requirements to ensure a level playing field across the EU. Remove the harmonised EU civil liability conditions and instead, defer to the various national civil liability regimes. Align the requirements on the adoption of transition plans for climate mitigation with the CSRD. The expected benefits of the proposed modifications, as outlined by the European Commission, is a reduced due diligence framework that is less complex and more harmonised, ensuring burden reduction and having a level playing field.    EU Taxonomy The proposed Omnibus legislation also amends the requirements of the EU Taxonomy Regulation and includes an increase in the reporting thresholds for mandatory reporting. Under the proposals, EU Taxonomy reporting would only be mandatory for a smaller number of companies, specifically large companies with;

More than 1,000 employees, and A net turnover of more than €450 million Companies within the scope of CSRD reporting, but who don’t have a net turnover figure of €450 million would be encouraged to voluntarily report. Additionally, companies may choose to voluntarily report on their partial Taxonomy alignment where they only meet certain Taxonomy criteria. The EC will consult on changes to the Taxonomy Disclosures Delegated Act and the Taxonomy Climate and Environmental Delegated Acts, with a view to simplifying these Acts. The Commission will also hold a public consultation asking for feedback on two alternative options to simplifying the “Do No Significant Harm” criteria. Benefits The European Commission have noted that there are several benefits which are expected to arise from the Omnibus Proposals, including; A streamlining of, and better alignment of, the CSRD and CSDDD requirements. Estimated total savings in administrative costs of approximately €6.3bn. Estimated to mobilise additional public and private investment capacity of €50bn to support policy priorities. Protection for SMEs from excessive sustainability information requests when they are in the value chain of companies reporting under the CSRD. An option for companies who are not in the scope of the CSRD to voluntarily report on their sustainability activities. Next steps These proposals will now enter trialogue negotiations between the European Parliament and the European Council where amendments may be made prior to its introduction. The extension of two years has been proposed for wave 2 and wave 3 by the Council to facilitate this transition preventing a situation where companies begin reporting under CSRD only to be potentially excluded shortly afterward. There is an urgent requirement to give clarity to companies and therefore finalise the CSRD and CSDDD adjustments as a matter of priority. It is expected that discussions on the broader Omnibus Package could extend over several months. Chartered Accountants Ireland is reviewing the omnibus simplification package with stakeholders to assess how we best continue to support businesses whatever size and whatever stage of the process they are at, to meet the standards, and how we train the accountants of the future to meet ESG-related legal requirements.   For further information in relation to this please see the European Commission's Q&A page.

Chartered Accountants Ireland was delighted to see the publication this week of a revised specification for Leaving Cert accounting by the National Council for Curriculum and Assessment. The development of a new curriculum that accurately reflects the role of the modern accountant has long been an advocacy priority for the Institute and following extensive engagement with officials from the Department of Education, the publication of the revised specification is an important milestone.  Leaving Certificate Accounting students will now have the opportunity to engage with themes including digitalisation, sustainability, ethical decision-making, and financial regulatory concerns as part of their coursework.   The draft specification is open for public consultation until Friday 28 April and the Institute (under the auspices of CCAB-I) will be making a submission in response to this which will be published on our website. You can read more about the subject development work by the NCCA here.

In Irish news this week, Revenue published updated guidance on employer provided vehicles and we issue a reminder that the deadline for submitting the 2024 share related returns is 31 March 2025. In UK news, the HMRC Making Tax Digital team are keen to visit agents in Northern Ireland and the latest Finance Bill continues its progress through the parliamentary process. In International news, the EU Economic and Financial Affairs Council (ECOFIN) adopts new legislation on electronic VAT Exemption Certificates. Ireland 1. We remind readers that the deadline for filing the annual share scheme returns for 2024 is 31 March 2025. 2. Revenue has updated its guidance on Employer Provided Vehicles. UK 3. The latest UK Finance Bill continues its progress through the parliamentary process. 4. HMRC’s Making Tax Digital team would like to meet with agents in Northern Ireland next week. International 5. Read about new legislation adopted by ECOFIN on electronic VAT Exemption Certificates  Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter. Subscribe to the Tax News by updating your preferences in MyAccount. You can also read this week’s post EU exit corner.

Today (26 February), the European Commission published its anticipated omnibus simplification package, which aims to reduce reporting burdens for companies, particularly SMEs. The package includes simplifications in sustainability reporting (CSRD), sustainability due diligence (CSDDD), and sustainable activity taxonomy (EU Taxonomy). The omnibus represents a dramatic change to several key pillars of the EU Green Deal, the key policy initiative in the path towards net zero by 2050. While we very much support simplification efforts to enhance the competitiveness of the EU’s single market, preserving regulatory certainty, clarity and stability for business is of utmost importance and is also key to remaining competitive.   As the largest professional body on the island of Ireland, representing over 39,000 members and educating over 6,600 students, the Institute has worked closely with members and member firms to equip them with the expertise and skills to prepare for and implement the CSRD both from a reporting and assurance perspective. Many of these have invested significant resources to upskill and meet existing requirements, and the changes proposed today may require several to pivot and understand new ones. Chartered Accountants Ireland is reviewing today’s omnibus simplification package with stakeholders to assess how we best continue to support businesses whatever size and whatever stage of the process they are at, to meet the standards, and how we train the accountants of the future to meet ESG-related legal requirements.  European Commission news release Commission simplifies rules on sustainability and EU investments

  Today's Chartered Accountants Ireland ESG Network meeting was joined by guest speaker David Connolly, a Fellow of Chartered Accountants Ireland, and Director with EY’s Climate Change and Sustainability Services, a specialized team within EY dedicated to helping financial institutions navigate the complex world of climate change and sustainability. In this recording  you can watch David's insights from Wave 1 reporting on the day the EU released its 'omnibus' package of simplification proposals. These propose to amend four key rules from the European Green Deal: The Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the EU Taxonomy on Sustainable Investments and the Carbon Border Adjustment Mechanism (CBAM).

HMRC has become aware of a scam email purporting to come from HMRC asking firms to submit an Annual Supervisory Return with payment of fees as part of their AML supervision. This email is being sent to both HMRC supervised firms and accountancy service providers supervised by the professional bodies. Although the content of the fraudulent email looks very similar to the official gov.uk website it appears to be sent from a false email address ending on @taxuk-access.services. Should you receive a fraudulent email purporting to be from HMRC, please do not click on the links and report this via https://www.gov.uk/government/organisations/hm-revenue-customs/contact/reporting-fraudulent-emails

Revenue has recently updated its Guide to Exchange of Information to reflect new exchange relationships which commenced in 2024 and 2025 to date

Revenue has updated its guidance on Revenue Procedures for Personal Insolvency Caseworking. The updates relate to the following: The Collector General’s Personal Insolvency unit. The collection of dividends due for a Debt Settlement Arrangement (DSA) or Personal Insolvency Arrangement (PIA). The minimum information requirements needed before Revenue will consider a DSA. Information on Capital Acquisitions Tax.

The Tax and Duty Manual covering the EU Minimum Taxation Directive has been updated to reflect Finance Act 2024. The changes include the following: The application of rules relating to deferred tax and the approaches which a constituent entity may use to track deferred tax. These include details on an order of utilisation rule in relation to a loss deferred tax asset. The allocation of certain covered taxes to a constituent entity that is a hybrid entity or a reverse hybrid entity, and to allow for an election to exclude the allocation of certain deferred tax expenses and benefits to a jurisdiction. Updates with respect to the transitional CbCR safe harbour, including anti-avoidance provisions with respect to “hybrid arbitrage arrangements”. Rules to be used by eligible groups for non-material constituent entities to be applied under the “Simplified Calculations Safe Harbour”. Standalone investment undertakings, as defined, shall not be chargeable to the domestic top-up tax. The domestic top-up tax liability in respect of a securitisation entity can be imposed on another constituent entity of the multinational group or, in certain circumstances, on the securitisation entity itself. Clarifications on the operation of the provision relating to the calculation of domestic top-up tax. Other amendments have been reflected throughout the manual to ensure that the Pillar Two legislation operates as intended. The appendix has been updated to reflect all relevant references.

Revenue has updated its guidelines on Capital Acquisitions Tax Collection and Enforcement to include additional information and guidance. A new table has been included outlining the current capital acquisitions tax (CAT) thresholds and further details on CAT online payment options have been included in the appendix. The manual reflects the increase in the flat-rate addition for farmers from 4.8 percent to 5.1 percent with effect from 1 January 2025 and the separate interest rates applying where phased payment arrangements are entered into in relation to agricultural and or business property. References to a voluntary judgment mortgage have been removed from the manual.

Revenue has updated its guidance on Employer Provided Vehicles to reflect Finance Act 2024. A benefit-in-kind (BIK) exemption is available for the installation of a battery electric vehicle home charger by an employer at a director or an employee’s private residence. Certain conditions must be satisfied to avail of this exemption, including a condition that the employer must retain ownership of the charging facility. Any amounts paid by the employer for the maintenance of the qualifying charging facility will also be exempt provided all the conditions are met. Finance Act 2024 provides for the following temporary measures, to be used when calculating the BIK amount on employer provided vehicles, to be extended to apply for the tax year 2025: A reduction of €10,000 to the original market value (OMV) for all vans, electric vehicles and certain cars, and A reduction of 4,000 kilometres to the highest mileage band, reducing it from 52,001 kilometres to 48,001 kilometres. The manual includes refreshed and updated examples which aim to provide additional guidance.