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Public Policy

In this week’s Public Policy news, read how Ireland has officially entered recession, how the new National Waste Action Plan for a Circular economy intends to move the focus from disposal to production, about two support schemes now available for Northern Ireland businesses, and how the EU plans to make a more resilient green and digital future Europe.Ireland enters recession following biggest quarterly drop ever recordedThe latest quarterly national accounts released by the Central Statistics Office last week showed that Ireland’s economy has officially entered recession. Ireland’s GDP has contracted by 6.1 percent during the second quarter of 2020. A recession is defined as the GDP contracting two quarters in a row. Consumer spending decreased by 19.6 percent, while industry and government spending increased by 7.5 percent.  Overall economic activity was partly offset by an increase of €37.8 billion in net exports of goods and services in Q2. The following sectors contracted significantly: Construction: 38.3 percentDistribution, transport, hotels and restaurants: 30.3 percentAgriculture, forestry and fishing: 60.6 percentArts and entertainment: 65.5 percentInformation and Communication: 1.5 percentMinister Finance Paschal Donohoe reportedly stated that there has been a strong pick-up in the third quarter of this year, according to indicators available to Government, and that Ireland compares favourably against the UK, eurozone and the US, where GDP declined by considerably more in the same period. Ireland publishes its Waste Action Plan for a Circular EconomyThe Department of Communications, Climate Action and the Environment this month published its Waste Action Plan for a Circular Economy. The policy is part of a new National Waste Action Plan and aligns with the goals of the European Green Deal, which seeks to embed climate action in all strands of public policy. The policy contains over 200 measures across various waste areas, including the Circular Economy, Plastics and Packaging and Green Public Procurement, and its goal is to move the focus away from waste disposal and look at resources more broadly to maximise their value rather than disposing of them. The plan is also summarised in infographics, which describe key actions and targets for both individuals and businesses. Invest NI makes two new COVID-19 schemes available  Minister for the Economy, Diane Dodds last week announced two new support schemes available to Northern Ireland businesses:£1million Digital Selling Capability Grant to help retailers and wholesalers better access consumer demand and grow online sales; and£5million Equity Investment Fund to help early stage and seed stage SMEs access finance. Both schemes opened for applications on 9 September. They are operated by Invest Northern Ireland, which is developing several new initiatives to help companies in the new business environment post-COVID-19.Kevin Holland, CEO of Invest NI, described SMEs as “the lifeblood of the Northern Ireland economy” and stated that the two new recovery schemes are “part of a range of solutions we are putting in place to help businesses progress recovery plans, strengthen supply chains, develop new products and access finance.”More information on Business Supports available for Northern Ireland can be found on the Chartered Accountants Ireland COVID-19 Hub, updated regularly. EU integrates strategic foresight into policymakingThe EU has published its strategy to integrate foresight into policymaking. The aim of the strategy is to help understand future challenges and opportunities, to identify major trends, explore alternative futures and design forward-looking policies to make Europe more resilient, green, digital and fair in the future. I’s first annual report Strategic Foresight - Charting the course towards a more resilient Europe focuses on social and economic, geopolitical, green and digital resilience. Read all our updates on our Public Policy web centre.

Sep 14, 2020
Sustainability

 CDP, CDSB, GRI, IIRC and SASB have announced a statement of intent to work together, based on a shared vision of the elements necessary for more comprehensive corporate reporting. These five organisations guide the overwhelming majority of quantitative and qualitative sustainability disclosures today, and provide the integrated reporting framework that connects sustainability disclosure to reporting on financial and other capitals.This commitment comes at a pivotal moment for progress towards a globally coherent solution for sustainability disclosure standards. Climate change, the global pandemic, and the increasingly clear connection between sustainability performance and financial risk and return are driving the urgency. The paper addresses the complexity surrounding sustainability disclosure and outlines a shared vision of standard-setting that enables companies to collect information about performance on a given sustainability topic once, but provide relevant information to different users through appropriate communication channels. It also describes the role of taxonomies and technology to enable sustainability-related data to be structured for sharing and comparison, as well as the importance of a publicly available data platform to democratise access to this information as a public good. Click here to read the paper

Sep 11, 2020
Public Policy

 Sustainability is critical to future-proofing businesses, but it is not always clear how people in business and practice can meet the challenges it presents. This webinar will help members understand how sustainability can mitigate risks and generate revenue and profit. In the third of our District Society Sustainability Roadshows - now with the North-West District Society - join four experts who will interpret global sustainability principles in practical ways for small and medium businesses.This free webinar on Thursday September 24 at 12pm is suitable for members in practice and industry who wish to understand more about sustainability and its future following the current crisis. It will describe how operating sustainably is key to cutting costs as well as building a fairer, greener and cleaner economy. Business at all stages of the sustainability journey will get an insight into how sustainability can bring benefits in terms of reduced costs, risk management, competitive advantage and sourcing finance.The key items that will be covered include:• What are the UN Sustainable Development Goals, and their relevance to SMEs• Government policy on sustainability at a national and local level• The business benefits of sustainability – people, profit and planetBy the end of this course, participants will be able to:• Understand the UN Sustainable Development Goals and how they apply to business in Ireland• Be familiar with the local and national government initiatives in Ireland• Understand the potential costs to be saved and profits to be made by introducing sustainable practices.• Appreciate how businesses can introduce sustainability practices in their own organisation, whatever the sizeSpeaker BiosJessica Lobo is Programme Manager, Global Goals, United Nations Global Compact Network UK. Jessica leads a programme of activity to engage businesses on the UN Sustainable Development Goals for the UN Global Compact Network UK, part of the United Nations Global Compact, the world’s largest responsible business initiative. Part of the programme is to promote practical sustainability leadership, share knowledge across sectors, and shape the business environment to create a world we want to live and do business in. Prior to this, Jessica was Sustainability Engagement Coordinator with City, University of London,  and Sustainability Engagement Officer at the London School of Economics and Political Science (LSE); Jessica has a Master's Degree in  Environmental Law.Ciarán Hayes was appointed Chief Executive of Sligo County Council in January 2014. Ciarán has 42 years’ service in Local Government having served in five Local Authorities, 20 years of which have been at a senior management level. As Chief Executive of Sligo County Council, he has been instrumental in the emergence of Sligo as capital of the North-West and is presently presiding over €250m capital infrastructural investment. In addition, he has led the Local Government Sector’s response in recent years to the challenges of climate change and was instrumental in the establishment of the Climate Action Regional Offices (CAROs).  Separately, he is a Board Member of Ireland International Airport, Knock (IWAK) and is on the Governing Board of IT Sligo.Shane O’Reilly is Director, Sustainable Futures, KPMG. Shane leads the ESG & Sustainability service line of KPMG Sustainable Futures. He has 20+ years’ experience of the global construction materials market having joined KPMG from CRH plc, where he was their Group Environment, Social and Governance (ESG) Manager. He is the current chair of CDP Ireland Network, a committee of sustainability professionals from across Irish industry and semi-state organisations. Shane also participated in a World Business Council for Sustainable Development (WBCSD), Construction Forum for the development of Task Force on Climate-related Financial Disclosures (TCFD) guidelines for the construction sector across its entire value chain. In addition to his ESG experience, Shane has knowledge of capital markets having been part of the Investor Relations group function, as well as operational experience through numerous management roles at CRH plc subsidiary companies in Ireland.Registration is here.

Sep 11, 2020
Public Policy

 In this week’s Public Policy news, read how Ireland has officially entered recession, how the new National Waste Action Plan for a Circular Economy intends to move the focus from disposal to production, about two support schemes now available for Northern Ireland businesses, and how the EU plans to make a more resilient green and digital future Europe.Ireland enters recession following biggest quarterly drop ever recordedThe latest quarterly national accounts released by the Central Statistics Office this week showed that Ireland’s economy has officially entered recession. Ireland’s GDP has contracted by 6.1 percent during the second quarter of 2020. A recession is defined as the GDP contracting two quarters in a row. Consumer spending decreased by 19.6 percent, while industry and government spending increased by 7.5 percent.  Overall economic activity was partly offset by an increase of €37.8 billion in net exports of goods and services in Q2. The following sectors contracted significantly: Construction: 38.3 percentDistribution, transport, hotels and restaurants: 30.3 percentAgriculture, forestry and fishing: 60.6 percentArts and entertainment: 65.5 percentInformation and Communication: 1.5 percentMinister Finance Paschal Donohoe reportedly stated that there has been a strong pick-up in the third quarter of this year, according to indicators available to Government, and that Ireland compares favourably against the UK, eurozone and the US, where GDP declined by considerably more in the same period. Ireland publishes its Waste Action Plan for a Circular EconomyThe Department of Communications, Climate Action and the Environment last week published its Waste Action Plan for a Circular Economy. The policy is part of a new National Waste Action Plan and aligns with the goals of the European Green Deal, which seeks to embed climate action in all strands of public policy. The policy contains over 200 measures across various waste areas, including the Circular Economy, Plastics and Packaging and Green Public Procurement, and its goal is to move the focus away from waste disposal and look at resources more broadly to maximise their value rather than disposing of them. The plan is also summarised in infographics, which describe key actions and targets for both individuals and businesses. Invest NI makes two new COVID-19 schemes available  Minister for the Economy, Diane Dodds this week announced two new support schemes available to Northern Ireland businesses:£1million Digital Selling Capability Grant to help retailers and wholesalers better access consumer demand and grow online sales; and£5million Equity Investment Fund to help early stage and seed stage SMEs access finance.Both schemes opened for applications on 9 September. They are operated by Invest Northern Ireland, which is developing several new initiatives to help companies in the new business environment post-COVID-19.Kevin Holland, CEO of Invest NI, described SMEs as “the lifeblood of the Northern Ireland economy” and stated that the two new recovery schemes are “part of a range of solutions we are putting in place to help businesses progress recovery plans, strengthen supply chains, develop new products and access finance.”More information on Business Supports available for Northern Ireland can be found on the Chartered Accountants Ireland COVID-19 Hub, updated regularly. EU integrates strategic foresight into policymakingThe EU has published its strategy to integrate  foresight into policymaking. The aim of the strategy is to help understand future challenges and opportunities, to identify major trends, explore alternative futures and design forward-looking policies to make Europe more resilient, green, digital and fair in the future. It’s first annual report Strategic Foresight - Charting the course towards a more resilient Europe focuses on social and economic, geopolitical, green and digital resilience.  Read all our updates on our Public Policy web centre.

Sep 11, 2020
Public Policy

 In today's Public Policy news, read about how the eurozone countries are recording negative inflation for the first time in four years, how €15m is being made available in low-cost loans for microenterprises in Ireland and how UK pension providers will have to report on climate change financial risks or face penalty.Europe's inflation may lead to more ECB stimulusThe current economic recession in the eurozone may result in a bigger and longer-lasting fall in consumer prices. This is according to reports by EU's Eurostat data agency that inflation in the 19 Eurozone countries turned negative for the first time since May 2016, falling to -0.2 percent in August. Underlying inflation also plummeted, defying analysts’ expectations, reportedly fuelling speculation by some economists that the European Central Bank (ECB) is preparing to inject even more stimulus in the European economy than the historic amounts it has already put in place. It also puts even more pressure on governments to increase public spending to restore consumer demand. ECB policymakers next meet on 10 September. Tánaiste makes €15 million available to low-cost loan scheme for microenterprisesTánaiste Leo Varadkar announced last week that Microfinance Ireland has opened its new €15 million COVID-19 fund to support small businesses through the current period of uncertainty and to protect jobs that have been impacted by the coronavirus pandemic here. Small businesses can apply for loans up to €25,000 for a three-year term with no repayments and no interest due for the first six months of the loan. Businesses with fewer than 10 employees and turnover of up to €2 million can avail of the low-cost loans under the Microfinance Ireland Covid-19 Loan Fund Scheme. The Tánaiste said: “This Fund has proven to be a lifeline for micro-enterprises over the past few months, where we’ve seen nearly 700 businesses with fewer than ten employees avail of it.”Up to 31 July 2020, up to 683 businesses had availed of the €18.6 million sanctioned under the Covid-19 Loan scheme, with €18.6 million sanctioned. Further information is available via Microfinance Ireland.UK pension providers to report on climate change financial risks The UK government last week published a consultation on a proposal designed to ensure pension providers consider the risk of climate change on their investments. Under the proposal, larger occupational pension schemes and authorised schemes will have to publish climate risk disclosures by the end of 2022.  Smaller schemes would have to meet the requirements by end 2023.Under the proposals, some schemes would have to use the taskforce on climate-related financial disclosures (TCFD) framework for these disclosures, and must demonstrate that effective governance, strategy, risk management are in place.   Schemes would also have to conduct ‘scheme scenarios’ to test temperature scenarios for the scheme’s assets, will need to report the greenhouse gas emissions of their portfolio, and will be required to publish their report on a website and to notify pension scheme members, or risk receiving a mandatory penalty imposed by The Pensions Regulator.Thérèse Coffey, secretary of state for work and pensions, said: ‘‘These measures will ensure pension schemes are in an ideal position to drive change to a sustainable, low carbon economy which will benefit everyone.” The consultation is open until 7 October, with a consultation on regulations planned for late 2020 or early 2021.Read all our updates on our Public Policy web centre.

Sep 07, 2020
Sustainability

 Bank of Ireland has entered the ‘green bonds’ market, potentially looking to raise a reported €300 million to €750 million in an initial green bond sale by the end of the year. It will use the money raised to finance customer projects that are in line with the International Capital Markets Association’s green-bond principles, such as renewable energy, green buildings and clean transportation. Green bonds were first issued the World Bank in 2009. Since then they have been increasingly issued by countries and companies to satisfy demand by investors for socially-responsible investment opportunities. The Climate Bonds Initiative, an international, investor-focused not-for-profit organization, estimates that $257.5 billion of green bonds was issued worldwide in 2019. In Ireland, the first green bonds were issued in 2018 by the National Treasury Management Agency.  The first Irish company to sell green bonds was ESB, which issued green bonds on the public bond markets in June last year.Bank of Ireland is set to become the first Irish lender to issue them. Its €2 billion Sustainable Finance Fund, launched last year, has already provided about €600m in green loans to home owners and businesses and aims to encourage, among other things, SME and agri investment in energy efficiency. It also offers discounted finance to businesses who want to implement energy saving initiatives to reduce their energy costs and their carbon footprint. Bank of Ireland is a signatory to the UN Principles for Responsible Banking and a supporter of the the 2015 Paris climate agreement and the UN’s sustainable development goals.

Sep 04, 2020
Public Policy

 In this week’s Public Policy news, read about how the eurozone countries are recording negative inflation for the first time in four years, how €15m is being made available in low-cost loans for microenterprises in Ireland and how UK pension providers will have to report on climate change financial risks or face penalty.Europe's inflation may lead to more ECB stimulusThe current economic recession in the eurozone may result in a bigger and longer-lasting fall in consumer prices. This is according to reports by EU's Eurostat data agency that inflation in the 19 Eurozone countries turned negative for the first time since May 2016, falling to -0.2 percent in August. Underlying inflation also plummeted, defying analysts’ expectations, reportedly fuelling speculation by some economists that the European Central Bank (ECB) is preparing to inject even more stimulus in the European economy than the historic amounts it has already put in place. It also puts even more pressure on governments to increase public spending to restore consumer demand. ECB policymakers next meet on 10 September. Tánaiste makes €15 million available to low-cost loan scheme for microenterprisesTánaiste Leo Varadkar announced this week that Microfinance Ireland has opened its new €15 million COVID-19 fund to support small businesses through the current period of uncertainty and to protect jobs that have been impacted by the coronavirus pandemic here. Small businesses can apply for loans up to €25,000 for a three-year term with no repayments and no interest due for the first six months of the loan. Businesses with fewer than 10 employees and turnover of up to €2 million can avail of the low-cost loans under the Microfinance Ireland Covid-19 Loan Fund Scheme. The Tánaiste said: “This Fund has proven to be a lifeline for micro-enterprises over the past few months, where we’ve seen nearly 700 businesses with fewer than ten employees avail of it.”Up to 31 July 2020, up to 683 businesses had availed of the €18.6 million sanctioned under the Covid-19 Loan scheme, with €18.6 million sanctioned. Further information is available via Microfinance Ireland.UK pension providers to report on climate change financial risks The UK government has published a consultation on a proposal designed to ensure pension providers consider the risk of climate change on their investments. Under the proposal, larger occupational pension schemes and authorised schemes will have to publish climate risk disclosures by the end of 2022.  Smaller schemes would have to meet the requirements by end 2023.Under the proposals, some schemes would have to use the taskforce on climate-related financial disclosures (TCFD) framework for these disclosures, and must demonstrate that effective governance, strategy, risk management are in place.   Schemes would also have to conduct ‘scheme scenarios’ to test temperature scenarios for the scheme’s assets, will need to report the greenhouse gas emissions of their portfolio, and will be required to publish their report on a website and to notify pension scheme members, or risk receiving a mandatory penalty imposed by The Pensions Regulator.Thérèse Coffey, secretary of state for work and pensions, said: ‘‘These measures will ensure pension schemes are in an ideal position to drive change to a sustainable, low carbon economy which will benefit everyone.” The consultation is open until 7 October, with a consultation on regulations planned for late 2020 or early 2021.Read all our updates on our Public Policy web centre.

Sep 03, 2020
Public Policy

Targets to help UK Government to ‘Build Back Greener’ This week the UK Government announced that it is setting out legally binding targets in the Environmental Bill 2020 to help the country ‘build back greener’. This Bill had been shelved due to COVID-19 and will be reintroduced once Parliament resumes after summer recess. The targets are being set in four priority areas: air quality; water; resource efficiency and waste reduction; and biodiversity. These targets will be time-bound and numerical; there will be at least one long-term target per priority area.  The Office for Environmental Protection will report on this progress annually throughout the five-year trajectory of the plan. Environment Secretary George Eustice said he hoped that “these targets will provide some much-needed certainty to businesses and society, as we work together to build back better and greener.” It builds on the UK’s 2019 commitment to become a   ‘net zero’ emitter by 2050. A public consultation on the targets, expected in early 2022, will allow businesses, communities and civil society to express their views. Online Retailer to benefits from €5.5million Government Scheme Yesterday, the Department of Business, Enterprise and Innovation launched a new funding scheme to help retail businesses in Ireland to increase their online presence.   Funding of €5.5 million is available.  Retailers with at least 10 employees and which have a pre-existing online presence can qualify.  Funds can be used to pay for service providers, work on digital strategy, and enhance websites and systems. Grants of up to 80 percent of project costs up to a maximum of €40,000 are available to successful applicants. There is a list of other stringent conditions that must be met before an application can be made. The Minister of State for Business, Employment and Retail, Damien English said he expects that “the increased customers and revenue make an important contribution to the bottom line. It also provides consumers with more opportunities to support local businesses in their community, even when shopping online.”The Scheme is available from 31 August 2020 to 28 September 2020 as is being administered by Enterprise Ireland.  Employees working longer days in lockdown Employees working from home are working longer hours, sending more emails and attending more meetings than they did before the COVID-19 pandemic. According to a recent study by researchers at the Harvard Business School, employees in North America, Europe and the Middle East attend 13 percent more meetings by virtual methods and the number of attendees present at those meeting increased by 13.5 percent, perhaps because there are no longer space constraints.  The average length of meetings has decreased by 20 per cent, with the  European countries leading the charge.  However, researchers found that employees are working for longer – on average more than 48.5 minutes a day – and that email activity has increased. Read all our updates on our Public Policy web centre

Aug 21, 2020
Public Policy

In order to meet the EU’s climate and energy targets for 2030, the EU is on a drive to redirect investments towards sustainable projects and activities.  To help with this, the EU has created a new classification system (a ‘taxonomy) for environmentally sustainable economic activities, including investments. This means large listed companies, banks and insurance companies will have to publish information on how, and to what extent, their activities align with those considered environmentally sustainable in the EU taxonomy. The lack of a clear definition of ‘environmentally sustainable economic activities’, however, is a large obstacle to achieving the EU’s objectives.  The European Commission has published a consultation with the aim of gathering the views of relevant stakeholders and collect information on the expected impacts, costs and benefits of the methodology and indicators proposed by the new taxonomy.The deadline for comments is 8 September 2020. Read all our updates on our Public Policy web centre.

Aug 10, 2020
Public Policy

The European Commission has launched two public consultations on initiatives that aim to maximise the impact of taxation in meeting the EU’s climate goals: the Revision of the Energy Tax Directive (ETD) and the creation of a Carbon Border Adjustment Mechanism (CBAM).  The review of the ETD is part of a series of measures announced in the European Green Deal. The Energy Taxation Directive 2003/96 lays down the EU rules for the taxation of energy products used as motor fuel or heating fuel and of electricity. However, since its adoption in 2003, energy markets and technologies in the EU have experienced significant developments. The EU’s international commitments, including the Paris Agreement, as well as the EU’s regulatory framework in the area of energy and climate change, have evolved considerably since then. The European Green deal adopted by the Commission on 11 December 2019 aims to transform the EU into a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050 and where economic growth is decoupled from resource use. Well-designed taxes play a direct role by sending the right price signals and providing the right incentives for sustainable practices of producers, users and consumers. The consultation is now open until 14 October 2020.   The new Carbon Border Adjustment Mechanism is a mechanism to counteract this risk of ‘carbon leakage’ that occurs when companies transfer production to countries that are less strict about emissions, or when EU products are replaced by more carbon-intensive imports. In such case global emissions would not be reduced, thus undermining Europe’s efforts to go climate-neutral by 2050 where international partners do not share the same climate ambition as the EU. The new mechanism would counteract this risk by putting a carbon price on imports of certain goods from outside the EU, ensuring that the price of imports reflect more accurately their carbon content. It would be an alternative to the measures that currently address the risk of carbon leakage in the EU’s Emissions Trading System (“EU ETS”). The consultation is now open until 28 October 2020. 

Aug 04, 2020
Sustainability

[This article was originally published in the December 2017 issue of Accountancy Ireland and can be found in PDF form in the Accountancy Ireland archive. Judith Wylie, author, is also a member of the Chartered Accountants Ireland Expert Working Group on Sustainability]  Chartered Accountants can add significant value to an organisation’s CSR activity. In this article, we explain how with examples from NI Water.Corporate social responsibility (CSR) has escalated up the policy agenda in Ireland in recent months with the enactment of the European Union (Disclosure of Non-Financial and Diversity Information by Certain Large Undertakings and Groups) Regulations 2017. This regulation requires large public interest entities and certain organisations with over 500 employees to include a non-financial statement in the director’s report and a diversity report in the corporate governance statements for financial years starting on or after 1 August 2017.Irrespective of the new regulations, the Irish Government has, for a number of years, seen CSR and other non-financial disclosures as an opportunity to support its objective of “building a strong economy and delivering a fair society so that businesses and communities thrive throughout Ireland”. The Government has stated that it wants “Ireland to be recognised as a centre of excellence for responsible and sustainable business practices”. To this end, the Tánaiste and Minister for Enterprise and Innovation, Frances Fitzgerald T.D., launched Towards Responsible Business: Ireland’s Second National Plan on Corporate Social Responsibility 2017-2020 in June 2017. This plan follows the first National Plan on CSR (2014-2016) in which the Government first indicated its support for CSR activity and reporting.The National Plan is not mandatory and hence, for the majority of businesses in Ireland, CSR activity and reporting are voluntary and supported though several business initiatives including the Business Working Responsibility Mark from Business in the Community Ireland, Chambers Ireland’s Annual CSR Awards and the government-sponsored CSR stakeholder forum. The CSR stakeholder forum has an online CSR tool for SMEs and it hosts a CSR hub that enables companies to disseminate best practice. Do Chartered Accountants need to know about CSR?We would argue that they do, particularly in light of the recent shift in EU regulation towards mandatory disclosure of non-financial information in the annual reports of large undertakings and groups. Moreover, ISA (UK and Ireland) 700 applies to all audits. Under ISA 700, auditors have to read all financial and non-financial information in the annual report of any undertaking being audited to identify material inconsistencies with the financial statements. In addition, they have to identify information in the annual report that is apparently materially incorrect, or materially inconsistent, with knowledge acquired by the audit team in the course of performing their audit. Therefore, if they discover that the CSR disclosures in the annual report do not reflect CSR activities as identified during the course of their audit, they need to consider this when drafting their audit report.CSR is considered to be intrinsically linked with value creation. Chartered Accountants acting in an assurance role or in an advisory capacity must therefore have an appreciation of CSR and its virtues and to advise companies on developing a CSR strategy as well as best practice for reporting on CSR activities. The same is true for Chartered Accountants working in business. They need to be able to assist the board in its decision-making in respect of CSR. Furthermore, some professional services firms specialise in providing CSR assurance in addition to the statutory audit report. Indeed, two thirds of the world’s largest companies provide assurance over their CSR information.This article aims to highlight the importance of CSR and CSR reporting for Chartered Accountants. We also aim to provide a brief summary of the breadth of CSR activities implemented by a company we consider to be a trailblazer for CSR strategy – Northern Ireland (NI) Water. Our scrutiny of this company forms part of a wider research project that investigates the CSR communication strategies of Irish companies. Our research involved analysing the CSR disclosures on its website, annual reports and Twitter feed followed by interviews with a number of key staff throughout the organisation, including Chartered Accountants. The ripple effectIn the words of UN Secretary, Ban Ki-moon in 2016, “Water is central to human survival, the environment and the economy… the basic provision of adequate water, sanitation and hygiene services at home, at school and in the workplace enables a robust economy by contributing to a healthy and productive population and workforce”. NI Water is one of Northern Ireland’s largest companies and is responsible for delivering clean, safe drinking water and taking away wastewater, which it treats before returning it to the environment. Given the nature of its main commodity, it is no surprise that NI Water can be hailed as a beacon for good CSR practice and the hope is that the activities identified in this article will have a ripple effect and inform CSR strategies in other companies.A strategic imperativeNI Water’s CSR strategy is evident at all levels of its business, from being part of the company’s strategic vision to being encouraged at operational level. In commenting on CSR in NI Water, Head of Corporate Governance and Risk, George Ong FCA, stated that CSR is “the lifeblood of the organisation, it is part of everything we do”. NI Water has a dedicated CSR committee comprised of key staff from across the organisation. The CSR committee adopts a proactive and reactive approach to the development of the organisation’s CSR strategy. For example, when NI Water created its long-term strategy (2015-2040), it did so after extensive engagement with customers and other key stakeholders. The strategy includes a vision “to be a valued and trusted provider of one of Northern Ireland’s most essential services; an organisation our customers and staff are proud of”. The strategy outlines eight strategic priorities that support the company’s achievement of their vision, four of which are CSR objectives and relate to social, environmental, ethical and philanthropic issues.NI Water has a formal system in place to record, measure, monitor and report on its CSR activity. A quarterly CSR report is prepared, which identifies each CSR activity’s overall objective, aim and progress during the quarter along with any supporting evidence on the impact or outcome of the activity. The CSR committee meets quarterly and includes representatives from the executive committee. The committee is tasked with ensuring that CSR is integrated into NI Water’s operations, processes and core business strategy. Examples of the breadth of CSR activity within NI Water are outlined under the CSR committees’ three reporting streams.Environment: NI Water is aware that many of its impounding reservoirs are located in areas of outstanding natural beauty. The company is sensitive to visual pollution and takes design steps to minimise the impact that infrastructure can have on beauty spots. The company also adopts a multi-agency approach to sustainable land management. For example, it recently collaborated with Irish Water, the Agri-Food and Biosciences Institute (AFBI), Ulster University, The Rivers Trust and East Border Region to apply for €40.2 million of EU Interreg funding for cross-border projects. The projects involve engagement with local communities to increase awareness of the importance of protecting drinking water supplies; piloting best practice forestry measures; restoring peatland on riverside stretches formerly used for forestry and introducing a land incentive scheme to reduce the entry of contaminants such as pesticides and sediments into watercourses. NI Water is also engaged in a number of renewable energy programmes including solar installations, and it utilises intensive treatment solutions that require less energy. One such solution called an integrated constructed wetland resulted in a 100% reduction in electricity usage in comparison to the former wastewater treatment process. The company has also committed to reducing carbon emissions and is working with other water companies through Water UK to help develop a common accounting methodology that will allow for the more robust reporting of carbon emissions.Colleagues: NI Water has a policy of supporting health and well-being activities for their staff. The cornerstone project is a volunteering programme called Cares Challenge, under which employees are encouraged to undertake volunteering activities during working hours to help benefit the greater community with key staff, including the Chief Executive, Sara Venning, getting involved. The company estimates that NI Water employees contribute over 1,000 volunteering hours per annum to a wide range of projects from painting, decorating and gardening for local community groups and charitable organisations to nature and wildlife projects such as creating pathways in the Mourne Mountains and helping protect wildlife on Rathlin Island.Community: NI Water has several initiatives aimed at educating the public about how they can help keep water clean and safe, including resourcing NI Water educational centres and getting involved in numerous community talks and events. The most successful initiative under this scheme is probably the famous Waterbus. The Waterbus visits over 19,000 pupils in primary schools each year. It provides interactive activities to engage and educate pupils on the importance of the water cycle, and its resources are designed to link with the national curriculum. NI Water’s philanthropic activities extend beyond engaging with local communities and include corporate support for the global charity, WaterAid, whose aim is to create a world where everyone everywhere has safe water, sanitation and hygiene. Fundraising and the promotion of this charity by NI Water within Northern Ireland generates around £75,000 for WaterAid per year. ConclusionsThe example provided by NI Water shows how important a formal approach to managing and reporting on CSR activities has become. Although the focus to date has been on public listed companies and large companies, the fact that the CSR stakeholder forum commissioned an online CSR toolkit for SMEs is indicative of policymakers’ belief that SMEs need to formally recognise that their responsibilities extend beyond the internal business and that the formal recognition of CSR activities has its benefits.Most SMEs undertake CSR activities on an ad hoc basis – for example, providing sponsorship to a local sporting team, encouraging staff to save on electricity or engaging in fundraising activities for charity. Chartered Accountants will increasingly have an important role to play here in advising how these activities can be effectively captured and reported on, in order to integrate them into a value-creating business strategy.Judith Wylie is a lecturer of Accounting at Ulster University. Anne Marie Ward is Professor of Accounting at Ulster University.

Jul 31, 2020
Sustainability

  The Prince’s Accounting for Sustainability Project (A4S) are providing free content to support organisations in understanding the role of finance in creating resilient business models and a sustainable economy.  A4S AcademyApply for the A4S Academy 12-month core programme (for senior finance professionals) to gain the knowledge and skills needed to embed sustainability into your organization’s decision-making process.For more information on the Academy and how to register, click here. Webinar programmeBenefit from bite-size learning sessions through the A4S webinar programme (open to all). The interactive webinars will explore topics looking at the role finance professionals can play in creating resilient business models, with insights from leading businesses.For more information and how to register, click here. Podcast seriesListen to the Financing our Future podcast series featuring interviews and discussions with leading figures in finance from organizations across the globe. For more information on the series and how to download, click here. Chartered Accountants Ireland is a member organisation of the A4S Accounting Bodies Network. In February 2020 Institute CEO Barry Demspey signed a global pledge, led by A4S, along with 13 other professional accounting organisations to combat climate change. A4S is Prince Charles’ Accounting for Sustainability Project and was established in 2004 with the aim of promoting sustainable decision-making in business.   

Jul 30, 2020
Sustainability

 The Leinster Society and Euronext are delighted to host a free webinar to provide insights into the annual report from a number of different perspectives, including investors, ESG, and diversity. The webinar will take place on 16 September @ 3pm. You can find out more about Euronext's ESG strategy at https://www.euronext.com/en/about/esg-empowering-sustainable-growthRead more about Chartered Accountants Ireland Leinster Society's Published Accountants Awards, which in 2019 introduced a new Sustainability Award, awarded went to Kerry Group along with the award for Best Digital Reporting.  

Jul 30, 2020
Sustainability

In an article in ICAEW's Insights publication, KPMG’s Director of Sustainability Services Richard Betts describes the sustainability sector as offering a bright future for ACAs beginning their careers.Sustainability is a rapidly developing area and with many companies only just getting started, providing opportunities for ACAs to bring added value in many ways.  Sustainability work, Betts explained, matches the ACA skillset. Betts himself says he never thought about working in sustainability originally, and started in financial audit, transferring to KPMG’s sustainability department.  "The ACA training gave me a really good foundation and transferable skills. Doing the ACA and working in financial audit gives you discipline and rigour, project management skills and attention to detail. Even though our data is not financial data, you still need the same skills.”As a job sector for ACAs Betts emphasised that sustainability is a growth area, and is extremely active, despite COVID-19 presenting short-term difficulties in the economy, with a lot more work to be done in the coming years. The majority of large accountancy firms now have sustainability teams, which could be a focus for ACAs searching for work. The work of sustainablity is also integrated into core business: “At KPMG, we have sustainability engagements working with our financial audit teams but also with our tax and advisory teams,” he said. Betts describe the his own work in the area of sustainability where his ACA provided transferable skills enabling him to thrive in these fields, as well as existing and potential work for ACAs in the area:non-financial reporting and assurance (for example GRI Standards, CDP, ISAE 3000, AA1000 and IIRC Integrated Reporting)integrating key non-financial information into primary annual reports, for example to align with TCFD recommendations to include climate-related financial risk disclosures within their annual reportsustainability strategy and implementationsustainable financingenvironmental due diligenceclimate change advisory services (TCFD and climate risk, GHG monitoring and reporting, decarbonisation and renewable energy)social value circular economy auditing non-financial impactThe article states that "In the future, companies will need to report far more extensively on non-financial data that is now material to all businesses. More ACAs will be needed to do the necessary work."For more resources see our Sustainability Centre on the Chartered Accountants Ireland website.

Jul 30, 2020
Sustainability

 Investors are overlooking the risk of water scarcity and the impact it could have on their portfolios in the coming decade, according to investment management firm BlackRock.Water demand exceeding supply in parts of the world is becoming a larger risk to investors, a headwind to supply chains and a cause of geopolitical tension, said to the firm's research arm, the BlackRock Investment Institute.Shortages of water also play into other climate-related risks, such as hurricanes, wildfires and flooding, the firm said. Companies that are resilient to water stress may fetch a premium as the importance of access to water becomes impossible to ignore, said BlackRock.

Jul 29, 2020
Innovation

Dr Michael Hayden provides the accounting practitioner with some food for thought.The COVID-19 pandemic brings a realisation of the importance of certain sectors in our society. While many businesses cease operations, food producers and farm enterprises are acknowledged as essential services.The economic significance of the Irish agricultural industry is well documented. However, in these unprecedented times, the focus has turned to its social importance. This provides an opportunity for the accounting profession to reflect on how it can best assist and support farming businesses, not only in the current circumstances but in the future.A question worth considering is: does the agricultural community reap the full benefit of the extensive knowledge and skills the accountancy profession has to offer? While acknowledging that challenges exist for accountants in delivering their services to farm clients, there are significant opportunities for accountants and farmers to work more effectively together to develop sustainable farm enterprises.Industry contextThe agricultural industry is an integral part of our economy and society. After the economic crisis of 2008, the government primed the agricultural sector to stimulate economic growth and set out ambitious goals for it in the Food Harvest 2020 and subsequent Foodwise 2025 strategy documents. The Department of Agriculture, Food and the Marine’s 2019 Annual Review and Outlook report outlines the importance of the industry. It claims that food produced in Ireland was exported to over 180 markets worldwide and was valued at €13.7 billion in 2018, which represents 10% of merchandise exports. Additionally, the sector contributed 7.5% of gross national income (GNI) and employed 173,000 people (7.7% of total employment) in 2018.Despite the importance of the industry, when average farm size, farm incomes and dependency on farm subsidies are examined, as well as the average age and training levels of Irish farmers, a picture of economic vulnerability emerges. The National Farm Survey (NFS) is published annually by Teagasc and highlights this vulnerability. The 2019 NFS highlights that 34% of Irish farms were deemed viable, 33% sustainable, and 33% vulnerable. It also reports that the average family farm income (FFI) in Ireland was €23,933 in 2019, which varies significantly across farm types (for example, dairy generated €66,570, tillage generated €34,437 and beef generated €9,188). Furthermore, farming in Ireland remains reliant on subsidies which, on average, accounted for 77% of FFI in 2019.Experts warn of another economic crisis post-COVID-19, and there is no doubt that our agricultural industry will attract renewed focus. Furthermore, Brexit represents a significant external risk for Irish agriculture with potentially far-reaching economic, social and cultural consequences. In this context, it is perhaps more important than ever that the accounting profession supports the agricultural community in developing sustainable farm enterprises by assisting farmers in making informed financial decisions based on sound financial management information.Challenges in providing services to farm clientsBefore exploring the opportunities for accountants to provide support to the agricultural community, it is important to acknowledge some challenges that exist in assisting farmers in managing their enterprise.Despite the economic vulnerability of many farms, research shows that most farmers spend little time on financial management. A dislike of conducting financial management activities exists in the farming community. Indeed, they are often viewed as a necessary evil and do not always fit well with the identity of what farmers see as important farm management activities. There are other identity-related issues: many farmers are quite secretive about their financial affairs; some are naturally reluctant to seek farm management advice; many tend to rely on intuition and experience in managing their business as opposed to relying on financial information.As a result of the lack of engagement by farmers with financial management in the day-to-day management of their business, book-keeping systems can be relatively unsophisticated. There is a tendency to monitor bank balances (cash flow), and only a minority maintain management accounting records.The average age of a farmer in Ireland is 59 years. This high age profile is a well-documented concern for the industry. In terms of financial management, older farmers are less likely to invest in their farm and are less likely to strive for innovation and efficiencies.Historically, farmers view accountants as providing a statutory and compliance role, such as filing annual tax returns, with little focus on value-added services. Also, the cost of such value-added services is a barrier as quite often, farmers are unwilling to pay for such services.This profile of the farming community suggests that there are limited opportunities for accountants to provide value-added services to farmers. However, there are ‘green shoots’ that give cause for optimism.Green shoots to exploreIn recent years, there has been a considerable shift in the industry. This shift is transforming the Irish agricultural landscape and providing opportunities for accountants and farmers to work more effectively together to develop sustainable farm enterprises.Policy changes have resulted in some fundamental structural reforms, which have provided opportunities for growth. For example, milk quota abolition under the Common Agricultural Policy (CAP) has resulted in considerable investment and expansion in the dairy sector. While it is acknowledged that farmers tend not to engage extensively and/or dislike financial management, the mindset of many farmers in this respect is changing. In my research, I discovered that where farmers are making strategic farm expansion decisions, there is a considerable degree of engagement with their accountants.Many traditional farm enterprises are diversifying and exploring new markets for their produce. For example, there is an increase in the production of artisan food products directly by farmers, alternative supply chains where farmers sell their produce directly from farm-to-market, and an increased focus on organic food production. These trends and the movement from the traditional farm production system often bring a renewed focus on profit margins, cost management and overall financial management.Farm partnerships and the incorporation of farm enterprises are becoming more widespread in the industry. Such changes in legal structure provide additional opportunities for accountants who have expert knowledge in terms of tax, legal, and succession planning advice.As a result of the above developments, younger farmers are being enticed into the industry. Agricultural courses in colleges and universities have seen strong demand in the past decade, which is very positive. Numerous policy measures have also been enacted to encourage generational renewal, including changes to land leasing arrangements, while tax reliefs/incentives have been developed to facilitate younger farmers entering the industry.These transformations to the Irish agricultural landscape have encouraged farmers to be more open to engaging the value-added services of accountants. This provides opportunities for accountants to develop successful working relationships with farmers, whereby farmers could significantly benefit from the expert knowledge and skills that accountants have to offer.ConclusionThere is vast potential for accountants and farmers to work more effectively together to develop sustainable farm enterprises. Navigating the financial challenges of COVID-19 and Brexit are just two reasons why each farmer should look to his or her trusted accountant for support and expertise as the farming community strives to meet the critical societal demands for a sustainable food supply.Dr Michael Hayden FCA is Assistant Professor of Accounting at Maynooth University.

Jul 29, 2020
Financial Reporting

Gemma Donnelly-Cox, Mary-Lee Rhodes, Benn Hogan and Mary Lawlor make the business case for corporate human rights reporting and outline critical issues for businesses to consider.Businesses can impact human rights in every context in which they operate. These impacts can be positive: delivering employment, infrastructure and furthering development. They can also be negative, bringing risks, including forced and child labour, pollution and corruption.Since 1 January 2017, all companies in Ireland to which the Non-Financial Reporting Directive (NFRD) applies have been required to disclose information relating to respect for human rights, including human rights risks and due diligence processes. Over the same period, there has been an increased interest among investment managers, most notably in Europe, in the human rights performance of companies. Furthermore, mandatory human rights due diligence is coming down the tracks. On 29 April, the European Commissioner for Justice, Didier Reynders, announced his intention to bring forward a legislative proposal in 2021 on mandatory human rights and environmental due diligence.It would seem to be in the clear interest of companies to have a human rights policy and to undertake human rights reporting. Richard Karmel, Global Business and Human Rights Partner at Mazars UK, makes this case in saying (in correspondence with the authors): “Reporting on human rights isn’t a compliance area; it is about being authentic and meaningful in disclosing not only the actions that you have taken to address your greatest risk areas (salient risks) but also reporting on how you know this information. Companies shouldn’t view addressing human rights as an internal cost for external benefit; there is huge internal benefit – greater productivity, improved quality of supplies, less staff turnover and absenteeism, and the attraction of new recruits, for example. This is not a cost area, but one of investment and companies are very good at monitoring their return on investment.”However, when we looked at human rights reporting by Irish companies, we found a significant information gap. Very few of the companies we studied in Ireland include human rights performance in the policy statements or company reports they publish, including those prepared under the NFRD. This may be due in part to the limited guidance within the Directive on how companies should report on human rights, including due diligence.We consider here some of the factors driving human rights reporting, what is required in such reporting, and what it looks like when companies do it well.The UN Guiding Principles and the Irish national planIn December 2011, the United Nations Human Rights Council unanimously adopted the Guiding Principles on Business and Human Rights (UNGPs). These principles were the first agreed statement by UN member states following 40 years of attempts to clarify the relationship between business and human rights. Embedded in the UNGPs is the three-pillar ‘Protect, Respect and Remedy Framework’, which sets out the duties of states to protect human rights, and the responsibilities of businesses to respect human rights and remedy failures. At a national level, a range of laws and ‘national action plans’ (NAPs) were created by member states seeking to embed these principles in company law and practice.Ireland’s NAP, published in 2017, recognises the need to, among other things, “encourage” companies to “develop human rights-focused policies and reporting initiatives”, “conduct appropriate human rights due diligence” and to consider a range of matters regarding access to remedy. An implementation group involving a wide range of stakeholders was established by the Department of Foreign Affairs and Trade to progress the NAP and a baseline assessment of the Irish legislative and regulatory framework was produced.The Corporate Human Rights Benchmark and Irish company performanceIn 2019, the Trinity Centre for Social Innovation published Irish Business and Human Rights: Benchmarking Compliance with the UN Guiding Principles. Mark Kennedy, Managing Partner at Mazars Ireland, has described the report as “a first and important assessment of how companies are dealing with what is a vitally important business issue”. We reported on the results of our pilot study in which we applied the benchmarking methodology developed by the UK-based Corporate Human Rights Benchmark (CHRB). The CHRB conducts an annual assessment of 200 of the world’s largest publicly traded companies on a set of human rights indicators. The indicators consider:Commitments: what commitments does a company make to respect human rights, engage with stakeholders and remedy shortcomings?Responsibility, resources, and due diligence: what steps does a company take to embed responsibility and resources for day-to-day human rights, and to establish a due diligence process that encompasses:identifying human rights risks; assessing them; taking appropriate action on the assessed risks; and tracking what happens after action by monitoring and evaluating their effectiveness?Grievance mechanisms, remedy and learning: what grievance mechanisms are established for staff and external stakeholders? How are adverse impacts remedied, and how are the lessons learned incorporated?Our report applied these indicators to analyse human rights policies and reporting in 22 Irish companies that have international operations. Our source materials for the study were the companies’ publicly available information, as listed in Figure 1.We found that, by and large, the Irish companies in our study are not reporting fully or systematically, and therefore are failing to make their human rights performance visible. No company disclosed a human rights due diligence process, and no company had a publicly reported formal commitment to remedy adverse impacts caused by it to individuals, workers or communities.Where companies are reporting, what does an ‘exemplar’ look like? Adidas AG was ranked first in the 2019 global CHRB (see corporatebenchmark.org). Bill Anderson, Vice President, Global Social and Environmental Affairs at Adidas notes (in correspondence with the authors) that excellence requires transparency about human rights failures as well as successes: “John Ruggie, the author of the UNGP, offered a simple but powerful message to business: in order to meet societal expectations, businesses must both know, and show, that they are respecting human rights. Building policies and due diligence systems on human rights is only half the journey. If a company is to be accountable for its actions and decisions, it must strive for transparency. This can start with small steps, the publication of a statement and a commitment to uphold rights and in time, lead to more dedicated reporting measures on issues and remedies. It is always easy to present the good one is doing, but much harder to account for the negative impacts a company’s operations may have on people’s lives.”Human rights reporting is here to stayWhile few companies in our sample of 20 Irish companies reported systematically on human rights, and despite an apparent lack of awareness among them of the UNGP, and a lack of explicit compliance, our view is that awareness of the requirement to report is slowly gaining strength in Ireland. It makes business sense to know how to report and how to address areas that indicate less than ideal human rights performance.Companies reporting under the NFRD are likely to face a shifting environment in the coming years. The European Commission is currently conducting a review of the NFRD, with a proposal expected in Q4 of this year. As mentioned above, the EU is committed to bringing forward legislation on mandatory human rights and environmental due diligence in 2021.Companies that get the basics right now by implementing policies and due diligence to prevent human rights abuses, instigating appropriate systems to remedy harms caused, and communicating their actions through non-financial reporting mechanisms will be well-placed to respond to this evolving regulatory landscape.We continue to benchmark Irish companies and in autumn 2020, will report on an expanded sample. We hope that benchmarking in Ireland will contribute to the impetus for improved corporate human rights reporting. Richard Karmel shares this view, noting that benchmarking “has an important role to play in the world of human rights reporting; after all, few companies want to be seen in the bottom quartile. Naturally, human rights benchmarks should stimulate a race to the top and ultimately encourage better treatment by business of those who are most vulnerable in our supply chains.”Gemma Donnelly-Cox, Mary-Lee Rhodes, Benn Hogan and Mary Lawlor represent the Centre for Social Innovation at Trinity Business School.

Jul 29, 2020
Feature Interview

Imelda Hurley has had a challenging start to her role as CEO at Coillte, but her training and experience have proved invaluable in dealing with the fallout from COVID-19, writes Barry McCall.Imelda Hurley’s career journey to becoming CEO of Coillte in November 2019 saw her work on every continent for a range of businesses spanning food to technology. That varied background has helped prepare her for the unprecedented disruption caused by the COVID-19 pandemic.“We have been working remotely since March, and the business has kept going throughout the pandemic,” she says. “We closed the office straight away and have had 300 people working remotely since then. Our primary focus since has been on the health, safety and wellbeing of our colleagues, and against that backdrop, on ensuring that a sustainable, viable and vibrant Coillte emerges from the crisis.”A diverse challengeThis has not been as straightforward as she makes it sound. “Coillte is a very diverse business,” she adds. “We are the largest forestry business in the country, the largest outdoor recreation provider, we enable about one-third of Ireland’s wind energy, and we have our board manufacturing business as well. We needed to continue operating as an essential service provider. That remit to operate was both a challenge and an opportunity.”The company’s timber products are essential for manufacturing the pallets required to move goods into and out of the country. “Some of our board products were used in the construction of the Nightingale Hospital in London,” she adds. “And the wind energy we enable provides electricity for people’s homes and the rest of the country.”Organisationally, the task has been to enable people to continue to do their jobs. However, the challenge varied depending on the nature of the operation involved. “In forest operations, people usually work at a distance from each other anyway, so they were able to keep going. That said, we did suspend a range of activities. We needed to continue our factory operations, but we had to slow down and reconfigure the lines for social distancing. And we kept the energy business going.”Those challenges were worsened by an ongoing issue associated with delays in the licensing of forestry activities and by the unusually dry spring weather, which created ideal conditions for forest fire outbreaks. “Even a typical forest fire season is very difficult,” she notes. “But this one was particularly difficult. In one single weekend, we had 50 fires which had to be fought while maintaining physical distancing. Very early on, we put in place fire-fighting protocols, which enabled us to keep our colleagues safe while they were out there fighting fires, and to support them in every way possible.”The lure of industryHer interest in business dates back to her childhood on the family farm near Clonakilty in Cork. “I was always interested in it, and I enjoyed accountancy in school and college at the University of Limerick. I did a work placement in Glen Dimplex and that consolidated my view that Chartered Accountancy was a good qualification that would give me the basis for an interesting career.”She went on to a training contract with Arthur Andersen in Dublin. “The firm was one of the Big 6 at the time,” she recalls. “I availed of several international opportunities while I worked there and worked in every continent apart from Asia. I really enjoyed working in Arthur Andersen, but I always had a desire to sit on the other side of the table. Some accountants prefer practice, but I enjoy the cut and thrust of business life.”That desire led her to move to Greencore. “I wanted to be near the centre of decision-making and where strategy was developed. I stayed there for ten years, learning every day.”And then she moved on to something quite different. “Sometimes in life, an opportunity comes along that makes you pause and think, ‘if I turn it down, I might regret it forever’. The opportunity was to become CFO of a Silicon Valley-backed business known as PCH, which stood for Pacific Coast Highway, which was based in Hong Kong and mainland China with offices in Ireland and San Francisco. It was involved in the supply chain for the technology industry and creating, developing and delivering industry-leading products for some of the largest brands in the world.”The experience proved invaluable. “It changed the way I thought. It was a very fast-moving business that was growing very quickly. I got to live and work in Asia and understand a new culture. I took Chinese lessons and the rest of the team took English lessons. There were 15 nationalities on the team. It was remarkably diverse in terms of demographics, gender, culture, you name it. That diversity means you find solutions you would not have found otherwise.“I spent three years with PCH and ran up half a million air miles in that time. It had a very entrepreneurial-driven start-up culture. The philosophy is to bet big, win big or fail fast. It was a whole new dynamic for me. I also got to spend a lot of time in San Francisco, the hub of the digital industry, and that was a wonderful experience as well.”Returning to IrelandImelda then returned to Ireland to become CFO of Origin Enterprises plc. “As I built my career, I always had the ambition to become CFO of a public company. And I always believed that with hard work, determination and a willingness to take a slightly different path, you will succeed. Greencore and Origin Enterprises gave me experience at both ends of the food and agriculture business; they took me from farm to fork. A few more years in Asia might have been good, but Origin Enterprises was the right opportunity to take at the time.”Her next career move saw her take up the reins as CEO of Coillte on 4 November 2019. “I always wanted to do different things, work with different organisations and with different stakeholder groups,” she points out. “Coillte is a very different business. It is the custodian of 7% of the land in Ireland, on which we manage forests for multiple benefits including wood supply. It is a fascinating company. It is an outdoor recreation enabler, with 3,000km of trails and 12 forest parks. We get 18 million visits to forests each year. We also have our forest products business – Medite Smartply. We operate across the full lifecycle of wood. We plant it and it takes 30-40 years to produce timber.”Imelda’s varied career has given her a unique perspective, which is helping her deal with the current challenges faced by Coillte. “Throughout my career, I have worked in different ownership structures and for a variety of stakeholders. I worked for public companies, a Silicon Valley-backed business, and have been in a private equity-backed business as well. Now, I am in a commercial semi-state. That has taken me across a very broad spectrum and I have learned that a business needs to be very clear on a set of things: its strategy, its values, who its stakeholders are, and how it will deliver.”Entering the ‘new’ worldWhile Coillte has kept going during the COVID-19 pandemic, it is still affected by the economic fallout. “We are experiencing a very significant impact operationally, particularly so when building sites were closed,” she says. “There has been some domestic increase in timber requirements since then, and there has been an increasing demand for pallet wood. That has had a significant financial impact and it’s why I’m focused on delivering a sustainable, vibrant and viable Coillte. We remain very focused on our operations, business and strategy. In the new post-COVID-19 world, we will need a strategy refresh. We must look at what that new world looks like, and not just in terms of COVID-19. We still have a forestry licensing crisis and Brexit to deal with.”The business does boast certain advantages going into that new world. “Our business is very relevant to that world. The need for sustainable wood products for construction is so relevant. Forests provide a carbon sink. The recreation facilities and wind energy generated on the land we own are very valuable. It may be a difficult 12-18 months or longer, but Coillte is an excellent place to be. In business, you manage risk. What we are managing is uncertainty, and that requires a dynamic and fast-paced approach. Time is the enemy now, and we are using imperfect information to make decisions, but we have to work with that.”Coillte will begin the first phase of its office reopening programme in line with Phase 4 of the Government’s plan. “We have social distancing in place and it’s quite strange to see the floor markings in the offices. We are doing it in four phases and carried out surveys to understand employee preferences. We then overlaid our office capacity with those preferences. Our employees have been fantastic in the way they supported each other right the way through the crisis.”Words of wisdomDespite the current challenges, she says she has thoroughly enjoyed the role since day one. “It would be wrong to say it’s not a challenge to walk into a business you were never involved in before and take charge, but I have a very good team. None of us succeeds on our own. We need the support of the team around us. The only way to succeed is to debate the best ideas and when there isn’t alignment, I make the final decision, but only after listening to what others have to say. You are only as good as the people around you. You’ve got to empower those people and let them get on with it.”Imelda believes her training as a Chartered Accountant has also helped. “It facilitated me in building a blended career. The pace of change is so incredibly quick today and if we do not evolve and learn, we lose relevance. Small pieces of education are also very valuable in that respect. Over the years, I did several courses including at Harvard Business School and Stanford. I love learning and I’m not finished yet. I’m a firm believer in lifelong learning.”Her advice to other Chartered Accountants starting out in their careers is to seek opportunities to broaden their experience. “Learn to be willing to ask for what you want,” she says. “Look for opportunities outside finance in commercial, procurement or operations. Look through alternative lenses to bring value. Make sure you are learning and challenging yourself all the time. Keep asking what you have added to become the leader you want to be someday.”And don’t settle for what you don’t want. “Be sure it is the career you want, rather than the one you think you want or need. It’s too easy to look at someone successful and want to emulate them. You have to ask if that is really for you. This role particularly suits me. I love the outdoors and I get to spend time out of the office in forests and recreational areas. That resonates particularly well with me.”

Jul 28, 2020
Tax International

 The European Commission has launched two public consultations on initiatives that aim to maximise the impact of taxation in meeting the EU’s climate goals. The revision of the Energy Tax Directive (ETD) and the creation of a Carbon Border Adjustment Mechanism (CBAM) were identified in the European Green Deal as a means to help with the transition towards a greener and more sustainable economy. Interested parties are invited to share their views on the Revision of the Energy Tax Directive by 14 October 2020 and a new Carbon Border Adjustment Mechanism by 28 October 2020.

Jul 27, 2020
Public Policy

 The European Commission has approved - under EU State aid rules - a scheme to support electricity production from renewable sources in Ireland. The measure will contribute to the EU environmental objectives without unduly distorting competition.Ireland intends to introduce a new aid measure, called the Renewable Electricity Support Scheme (“RESS”), to support electricity production from renewable sources. The RESS will contribute to the EU renewable energy target and will help Ireland reach its national target to transition away from fossil fuels and reach a share of 70% of renewables in its electricity mix by 2030.Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This Renewable Electricity Support Scheme will contribute to Ireland's transition to a low carbon and environmentally sustainable economy, in line with the European Green Deal and our State aid rules.”About the Renewable Electricity Support Scheme (“RESS”) Estimate Total Budget€7.2 billion - €12.5 billionDuration2020 - 2025.How it operatesAid for the production of electricity from renewable sources granted under the RESS will be allocated through auctions.All eligible technologies will compete for subsidies in these auctions. This is to ensure the cost-effective achievement of renewable electricity targets by encouraging competition. (However, Ireland has justified preferential treatment for a small quantity of energy from solar, as well as from offshore wind on the basis of the longer term potential of these technologies for the country.)Successful applicants of the RESS will receive support over 15 years in the form of a premium on top of the market price. The competitive auctions through which the aid is granted will set a ‘strike price'. When the market price is below this ‘strike price', beneficiaries will be entitled to receive payments equal to the difference between the two prices. However, when the market price is above the ‘strike price‘, beneficiaries will have to make payments equal to the difference between the two prices. These payments will be returned to Irish consumers in the form of reduced electricity bills.Specific SupportsTo help build public acceptance and support for Ireland's ambitious renewable energy targets, the RESS includes specific forms of support for:projects developed by renewable energy communities - these will benefit from grants and loans to support the development of their projects and will participate in auctions in a special category in order to ensure that a certain number of these projects is successfulcommunities that host projects supported by the RESS. These communitieswill benefit from a fund to which all RESS beneficiaries will contribute, and that will invest in certain technologies and ‘sustainable goals' including education, energy efficiency, sustainable energy and climate action initiatives in the area surrounding the RESS projects.Ireland has also developed a detailed plan for evaluating the RESS, including in particular a full analysis of the costs and benefits of the innovative measures supporting the renewable energy communities.The Commission assessed the scheme under EU State aid rules, in particular under the 2014 Guidelines on State aid for environmental protection and energy.The Commission found that the aid is necessary and has an incentive effect, as electricity prices do not fully cover the costs of generating electricity from renewable energy sources. It also found that only renewable technologies that need public support to be a viable investment will be eligible for support under the RESS. The aid is also proportionate and limited to the minimum necessary, as the amount of aid will be set through competitive auctions.Therefore, the Commission concluded that the Irish RESS is in line with EU State aid rules, as it promotes the generation of electricity from renewable sources, in line with the European Green Deal, without unduly distorting competition.

Jul 23, 2020
Public Policy

On  22 July, Bord Gáis Energy announced a range of innovative new measures to help bolster Ireland’s position on sustainable energy use.  For businesses, Bord Gáis Energy has two initiatives:Centrica Business Solutions a suite of end-to-end energy management solutions, including Combined Heat and Power (CHP) that help keep businesses in control of their energy  Demand Side Management an innovative energy management model that helps businesses control their energy supply, which can help businesses "turn their energy footprint into a source of competitive advantage"Catherine O’Kelly, Managing Director of Bord Gáis Energy decribed the launch and implementation of these sustainability initiatives as being fast-tracked as a result of COVID-19, to reflect the changes in working and living patterns right across the country and to support the recently launched Programme for Government and the ambitious targets for reducing carbon emissions in Ireland.

Jul 23, 2020

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