In this week’s Sustainability/ESG bulletin, read about Ireland’s SDG Champions Programme, the CSO’s first set of published ‘ecosystem accounts’, a report from InterTradeIreland showing the business opportunities in the all-island circular economy, and the launch of a public consultation on the UK’s proposed carbon border adjustment mechanism (CBAM). Also covered is the approval of the Corporate Sustainable Due Diligence Directive (CSDDD), a report from European Environment Agency on EU’s progress towards a more circular economy, and a call for evidence on new EU rules on environmental geospatial data, as well as the usual resources, articles, podcast, videos and upcoming events. IRELAND Expressions of Interest for Sustainable Development Goal (SDG) Champions Programme The Department of Environment, Climate and Communications (DECC) is seeking expressions of interest for its 2024-2025 Sustainable Development Goal (SDG) Champions Programme. The programme, established in 2019, aims to raise public awareness of the SDGs and to demonstrate that everyone in society can make a contribution to the 2030 Agenda for Sustainable Development. Over 30 organisations and groups have become SDG Champions so far, including Musgrave, The GAA, ECO-UNESCO, University of Galway, Ballyhoura Development and Chambers Ireland. Further information can be found on the DECC website and the deadline for applications is 5pm on Monday, 1 April 2024. CSO publishes full set of ‘ecosystem accounts’ for first time The CSO has published  Ecosystem Accounts – Forests and Woodlands 2012-2022, the first time it has produced a full set of ecosystem accounts for one of Ireland's ecosystems. Published as part of the CSO Frontier Series, the new release combines data from a range of sources to produce accounts for the extent and condition of Ireland’s forest and woodland ecosystems, and some of the ecosystem services they provide. The CSO notes, however, that particular care must be taken when interpreting the statistics in this release as it may use new methods which are under development and/or data sources which may be incomplete, for example new administrative data sources.  NORTHERN IRELAND & UK InterTradeIreland publishes report on businses opportunities in circular economy InterTradeIreland, the all-island economic development agency, has published a report revealing new business opportunities available in the all-island circular economy across a wide range of sectors. The report, which was launched at the All-Ireland Sustainability Summit, highlights the potential for SMEs throughout the island to make significant cost savings and reduce carbon emissions. In contrast to the traditional economic model of 'take-make-waste', the circular economy keeps materials in circulation for as long as possible through strategies such as reuse, repurposing, and recycling. One of the key findings of the report underscores the huge potential of ‘industrial symbiosis’, in which outputs from one process serve as inputs for another. The report does note, however, that despite the opportunities available, barriers such as waste regulation and the lack of a joined-up approach can hinder companies. Public consultation on UK carbon border adjustment mechanism The UK government has launched a public consultation setting out proposals for the design and administration of a UK carbon border adjustment mechanism. Following the consultation “Addressing carbon leakage risk to support decarbonisation” in 2023, the government announced that it would introduce a carbon border adjustment mechanism (‘CBAM’) from 1 January 2027 on imports of certain carbon intensive imported goods from the following sectors: aluminium; cement; ceramics; fertilisers; glass; hydrogen; and iron and steel. Views on the design and administration of this mechanism are now invited from interested parties, including importers and their agents, other businesses, individuals, tax advisers, trade and professional bodies and other interested parties, including those overseas. Responses, either via the response form or by email, will be shared between HMRC and HMT; participants are also invited to take part in a roundtable discussion or be added to the ‘CBAM mailing list’. EUROPE Approval of the Corporate Sustainability Due Diligence Directive The European Council has voted to back the Corporate Sustainability Due Diligence Directive (CSDDD) which requires firms to mitigate their negative impact on human rights and the environment. The rules will apply to EU and non-EU companies and parent companies with over 1000 employees and with a turnover of more than €450 million, and to franchises with a turnover of more than €80 million if at least 22.5 million was generated by royalties. Companies will also have to integrate due diligence into their policies and risk management systems and adopt and put into effect a transition plan making their business model compatible with the global warming limit of 1.5°C under the Paris Agreement. The plans should include the company’s time-bound climate change targets, key actions on how to reach them and an explanation, including figures, of what investments are necessary to implement the plan. Firms will be liable if they do not comply with their due diligence obligations and will have to fully compensate their victims. They will also have to adopt complaints mechanisms and engage with individuals and communities adversely affected by their actions. The vote concluded weeks of negotiations and revisions to the text after it failed to secure the Council’s approval at the end of February. Once formally approved by the European Parliament and the member states, the directive will enter into force on the twentieth day following its publication in the EU Official Journal. Circular economy and emissions in Europe The European Environment Agency this week published a comprehensive analysis into the EU’s progress in transitioning to a more circular economy.  The report – “Accelerating circular economy in Europe — state and outlook 2024 – finds that decisive action is essential to drastically reduce waste, prioritise reduction of resource use, improve recycling rates and improve the introduction of products that are designed for circularity from the outset. Other key findings suggest that Europe alone cannot curb unsustainable resource use occurring at global scale, and that a robust global governance framework on resource use and circular economy will be essential. Separately, the European Environment Agency published monitoring data which shows that the average CO2 emissions of new cars registered in Europe fell further in 2022 to a new low of 27 percent below 2019 levels. Vans emissions have also seen a decrease of some 10 percent over the same period. Only one manufacturer was found to have exceeded its target in 2022 and will be required to pay an excess emissions premium. GreenData4All call to deliver on Europe's green and digital transformation The European Commission has published a call for evidence on a ‘GreenData4All’ initiative to help deliver on Europe’s green and digital transformation by updating EU rules on environmental geospatial data and on public access to environmental information. The aim is to enable greater sharing of data between the public and private sectors and with the general public and unlock the full benefits of data sharing for data-driven innovation and evidence-based decisions. The closing date for submissions is March 25. GLOBAL Carbon Brief has reported that research published in the journal Nature estimates that global economic losses from heat stress could reach 0.6-4.6 percent by 2060, with major losses coming from health impacts, lower labour productivity and disruptions to supply chains. The International Federation of Accountants (IFAC) has included the following resources in its newsletter on 19 March: Global Reporting Initiative (Global Reporting Initiative) CSRD. Implications for companies outside the EU (Global Reporting Initiative) Sustainability assurance resources (CPA Canada) Sustainability in transactions (ACCA) Technical Roundup (From our colleagues in Professional Accounting) EFRAG has announced the addition of three new entities to the “Friends of EFRAG – Sustainability Reporting” community. Greenomy, osapiens and SISB have joined the group, demonstrating their commitment to sustainability reporting and supporting EFRAG’s mission. Accountancy Europe has issued its March Sustainability Update. Last chance to apply: The A4S Academy The A4S Academy is a unique implementation and learning programme. It has been designed with CFOs to bridge the gap between what organizations need to do to meet their sustainability targets and the skills and capacity their finance teams currently have to offer. We are proud of the feedback we've received, with 89% of participants reporting that the programme made an impact on sustainability integration in their organizations within one year, while 93% said they felt empowered to drive the change. Applications for the Academy close on 29 March 2024, so there isn't much time left to apply. Please go to our webpage for further information, or email academy@a4s.org if you have any questions. Watch Comedian, writer and traveller Martin Beanz Warde jumps head first into the sustainability and climate action challenges facing Ireland in the hopes of demystifying them for all (30 mins) (RTÉ Player) Short interview with director of the SME Climate Hub about the role of small and medium firms worldwide in the net zero transition (BusinessGreen) (9 mins) Listen How SMEs may be our biggest hope for Net Zero (Podcast) (42 mins) Articles  Forget Offsets. What If Companies Had Carbon Swear Jars? (Bloomberg) Sustainability reporting is coming into mainstream, by Paul Druckman (Accountancy Daily) Only one in seven Irish people think climate change will impact them (Business Post) Tomás Sercovich: Ireland has right size and right culture to drive corporate sustainability (Five Degrees of Change – Business Post) Upcoming Events A4S Sustainability In Action Webinar: Capitals Accounting An interactive webinar exploring various aspects of capitals accounting and how it is being applied in practice. The discussion will explore the information needed to tackle a range of impacts. 28 March, 08:00   Accountancy Europe and others How can company boards lead the sustainability transition? The event will also draw on the recent Accountancy Europe, ecoDa and ECIIA publication ESG Governance: questions boards should ask to lead the sustainability transition which sets out practical questions that boards should consider in their efforts on ESG, sustainability transition planning, delivery on sustainability objectives and limiting greenwashing risks. 10 April, 10:30-12:00 CET, Virtual   Chartered Accountants Ireland ESG Masterclass: Take your sustainability knowledge to the next level (ROI/NI) Masterclass designed for all professional accountants working in business or practice, wishing to consolidate their knowledge and understanding of the sustainability regulatory, reporting and assurance landscape. 18 April, 08:30 – 13.00, Virtual   ICAS Sustainability Summit This event, hosted in association with Accounting for Sustainability (A4S), will bring together sustainability experts and forward-thinking business leaders to explore how we can accelerate the vital business changes needed to save our planet. A specialist line-up of speakers and panellists will delve into the future of sustainable business, the role of technology in the climate transition and the evolving sustainability reporting landscape. The summit also marks the launch of ICAS’ sustainability business network – a collaborative community where professionals can share and benefit from sustainability-related insights. In person, Edinburgh, 25 April 2024.   National Sustainability Summit 2024 Dates: May 28-29 Locations: RDS   Network for Chartered Accountants working on ESG projects Are you a Chartered Accountant working in ESG or working on ESG-related projects? Would you like an opportunity to engage with other Chartered Accountants working in this space to share insights, challenges and opportunities? Chartered Accountants Ireland now has a network to allow members working in sustainability/ESG to meet and discuss all matters of interest re ESG and accounting. Next meeting: Wednesday, 27 March, 14:00-15.30 Teams If you would like to attend, please email sustainability@charteredaccountants.ie   You can find information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre.

In this week’s Sustainability/ESG bulletin, read about Ireland’s new offshore wind industrial energy strategy, natural capital accounting and updates on sustainable travel in Ireland. Also covered is a call for evidence on Northern Ireland Climate Change Adaptation Programme, and climate risk in separate reports from The Scottish Fiscal Commission, the European Commission, and the Inevitable Policy Response, as well as the usual articles and upcoming events. IRELAND Institute shortlisted for Business & Finance ESG Award Chartered Accountants Ireland is delighted to have been shortlisted for a Business & Finance ESG Award in the Company Award (SME) category. Now in their third year, these Awards shortlist across 18 categories reflecting the evolving ESG landscape and showcasing the successes of ESG initiatives and examples of best practice. The Institute was proud to share details in our submission of the measures we have taken so far to embed sustainability in the Institute, both in Dublin and Belfast. New offshore wind industrial energy strategy introduced Last week Ireland launched a new offshore wind industrial strategy that aims to build a successful, vibrant, and impactful new offshore wind energy (OWE) sector in Ireland with significant value and creating up to 5000 jobs by 2030. The overarching objective of Powering Prosperity – Ireland’s Offshore Wind Industrial Strategy is to maximise the industrial development opportunity arising from OWE production in Ireland so as to create clean, green, renewable industries of the future. The strategy has 40 actions for implementation in 2024 and 2025 and was developed in collaboration with other government departments and agencies. Some of the key actions to be advanced in this initial iteration include exploring the concept of Green Energy Industrial Parks, establishing an OffShore Wind Centre of Excellence, driving scale in the offshore wind supply chain and building on international strategic partnerships. Right to request remote/flexible working arrangements introduced The right to request remote working arrangements for all employees and the right to request flexible working arrangements for parents and carers was brought into operation last week. Following a public consultation, which the Institute fed into (you can read our submission here) the Code of Practice for Employers and Employees Right to Request Flexible Working and Right to Request Remote Working was also approved and published. The code is available on the WRC’s website  Sustainable Finance The Department of Finance has published an update to the Ireland for Finance strategy, which looks to further establish Ireland as the recognised global location of choice for specialist international financial services. The 2024 Action Plan, published last week, details various key measures to realise this ambition, in collaboration with public and private sector stakeholders, including Chartered Accountants Ireland, where it highlights the Institute’s embedding of certain pillars of sustainable finance, for example, regulation, reporting and assurance, within its student and continuing professional education programmes, as well as outreach programmes. Separately, the Central Bank of Ireland recently published its Regulatory and Supervisory Outlook 2024 (RSO). One such risk identified is Climate and other environmental-related risks, i.e. physical climate risk, transition risk and litigation risk, which it describes as “no longer simply emerging risks but reflect[ing] present day realities that are getting more severe and impactful and unpredictable as time goes by”. On sustainable finance, the report notes that “[t]o support the transition to net zero, it is imperative that investors are fully informed, and in no way misled, regarding the stated sustainability credentials of financial products”, and identifies as particular areas of risk ‘ESG disclosures’ and ‘poor ESG data quality’. The Impacts of Electric Vehicles Uptake and Heat Pump Installation on the Irish Economy - December 2021 The Department of Finance has published a link to a paper examining the economic and environmental impacts of the adoption path of electric vehicles (EVs) and home retrofitting in the form of heat pumps (HPs) projected in the recent Climate Action Plan for Ireland. The paper’s results show that an increase in the carbon tax has substantial impacts on emission reduction. It also finds that EV adoption and HP installations can further reduce emissions but to a lesser degree than the carbon tax increase. The results prove the importance of simultaneous use of carbon taxation and electrification of transport and home heating, where carbon taxation increases the benefits of adopting low carbon technologies and adoption reduces the costs of carbon taxation. ‘What Can Natural Capital Accounting Do For Us?’ The National Economic and Social Council (NESC) held an event this week to discuss the potential of natural capital accounting in Ireland, examining the fundamental question: What Can Natural Capital Accounting Do For Us? Natural Capital Accounting (NCA) involves including environmental data in the national economic accounts and valuing the many benefits nature provides, like clean air, water and biodiversity. The event followed the recent publication of the NESC report “Natural Capital Accounting: A Guide for Action.” Research updates on travel in Ireland published Figures released by the Central Statistics Office (CSO) this week show a continued growth in the number of electric and plug-in hybrid vehicles licensed in Ireland. The number of new electric cars licensed increased by 7 percent from 4,583 in the first two months of 2023 to 4,896 in the first two months of 2024. Research released separately by the National Transport Authority (NTA) suggests that walking and cycling take 680,000 cars off the road each day in Ireland’s five largest cities (Dublin, Cork, Galway, Limerick/Shannon and Waterford). The figures were from NTA’s largest-ever survey of walking, wheeling and cycling in Ireland, which also found that the annual economic benefit from walking, wheeling and cycling in the five metropolitan areas each year is over €3bn. The above coincides with the opening of a public consultation from 12 March until 3 May on  the development of Shared Mobility Hubs, where a range of shared travel options – including, for example, shared bikes, electric bikes or e-cars – come together and can be accessed in one place by people who need them. NORTHERN IRELAND & UK Call for evidence on Northern Ireland Climate Change Adaptation Programme Climate NI, on behalf of the Department of Agriculture, Environment and Rural Affairs (DAERA), are asking for a contribution to the next Northern Ireland Climate Change Adaptation Programme (NICCAP3). Information is being sought for planned or ongoing projects during the period 2024-2029 which will address the impacts of climate change in Northern Ireland. Adaptation action can take many forms, and the UK Climate Change Committee has grouped the risks into 13 different systems where action is required (e.g. water supply, buildings, nature, business etc.). Relevant projects should relate to one or more of these systems, be ongoing or planned during the period 2024-29, and reduce vulnerability to climate change in NI by protecting or enhancing an asset, area or group from the impacts of climate change; filling an evidence gap to improve understanding or decision-making; or improving governance, policies and procedures to enable either of the first two options. The call for evidence will close on Friday 12 April 2024. Climate risk and the cost of net zero – Scotland The Scottish Fiscal Commission has analysed the implications for the Scottish public finances of meeting Scotland's statutory emissions target to reach net zero by 2045, adapting to climate change and handling the damage it will cause. In its publication Fiscal Sustainability Perspectives: Climate Change, the Commission reported that unmitigated climate change (i.e. climate change that is allowed continue without any efforts being made to stop it) would have catastrophic impacts on individuals, businesses and the public finances. In line with the Paris Agreement, both the Scottish and UK Governments are committed to help limit global warming through their own emissions targets, but these actions will impose costs on the public sector, as will the need to adapt to and deal with damage from climate change. EUROPE A report released this week shows that the EU’s objectives under the European Green Deal are attainable if the actions planned are fully implemented.The 8th Environment Action Programme (EAP) mid-term review also points to the positive economic and social impacts of achieving the goals, for example, in terms of improving wellbeing, health, resilience, or security of supply. Many planned actions, such as legislative changes have been delivered, but it is too early to assess their impact on the environment as they are yet to be implemented on the ground.   Europe is the fastest warming continent in the world, and climate risks are threatening its energy and food security, ecosystems, infrastructure, water resources, financial stability, and people’s health. According to the first European Climate Risk Assessment (EUCRA) on behalf of the European Environment Agency’s (EEA), many of these risks have already reached critical levels and could become catastrophic without urgent and decisive action. Responding to the publication of the report, the European Commission published a Communication on managing climate risks in Europe, which sets out how the EU and its Member States can better anticipate, understand, and address growing climate risks. It further presents how they can prepare and implement policies that save lives, cut costs, and protect prosperity across the EU.   The European Parliament has adopted measures to reduce road transport emissions from passenger cars, vans, buses, trucks and trailers. Vehicles will need to comply with the new standards for longer, ensuring they remain cleaner throughout their lifetime. An Environmental Vehicle Passport will be made available for each vehicle and contain information on its environmental performance at the moment of registration (such as pollutant emission limits, CO2 emissions, fuel and electric energy consumption, electric range, battery durability).   The European Court of Auditors is assessing whether European Union and member state policy frameworks and funding for climate adaptation address the effects of climate change effectively. Auditors are looking at the EU Strategy for Adaptation to Climate Change and EU-funded projects on climate change adaptation. Their findings and recommendations are expected in autumn. GLOBAL Unprepared investors at risk as national policies to halt nature loss and deforestation accelerate The policy forecasting body Inevitable Policy Response (IPR) has forecast that progress on nature and land use will ultimately make or break efforts to achieve net zero. The forecast, which was commissioned by the Principles for Responsible Investment (PRI), analysed the trajectory of national environmental policies and their impacts on companies and investors. It forecasts that half of global emission reductions by 2035 are set to come from the land use sector through a combination of policies to end deforestation, lower agricultural emissions, reduce food waste, restore degraded natural ecosystems, and scale nature-based solutions. Calling our members in the Energy Sector Business For Biodiversity Ireland is building on its successful multi-sector Community of Practice (CoP) of businesses coming together to share, evolve and drive change toward a Nature Positive future. The national platform is now convening sector-specific CoPs for 2024 - starting with the Energy Sector.  If you are an energy provider, regulator, renewable energy organisation / expert, community group, NGO or SME specialising in the area of energy and carbon emissions, you can get involved by finding out more here: https://businessforbiodiversity.ie/energy-sscop/ Articles ‘The Batmans of this sustainability reporting saga’ Sustainability reporting revolution: UK & EU lead the charge (Acountancy Age) How to make your accountancy practice more sustainable (Accountancy Today) “Nature positive is not a destination – it’s a mindset, a way of working, a cultural shift” (The Currency) Upcoming Events       CAANZ, Sustainability Seminar 2024 AU The Sustainability Seminar 2024 is designed to elevate your knowledge and confidence in tackling the sustainability challenges faced by accounting, business and finance professionals every day. With sessions designed to enhance your understanding of developments and future trends, we’re shifting the conversation from discussions around conceptual climate risk to embedding sustainable business practices at every level, making sustainability part of business as usual. Tuesday 19 March 2024, 10:00am to 2:00pm AEDT, Virtual (Zoom) CAANZ,Climate Disclosures Seminar 2024 This two-day seminar will assist delegates to understand the complex landscape of climate disclosures. In 2026, Group 2 organisations will commence reporting on their climate metrics, so finance professionals and executives need to understand now what will be required, and where to begin. Wednesday-Thursday, 20-21 March 2024, Virtual Sustainable Energy Authority of Ireland, The Energy Show 2024 Join SEAI for a host of informative seminars and industry talks as well as over 100 exhibitors from the sustainable and renewable energy sector. Of note: SEAI’s grants and supports for business - The SME Business Grant Briefing on Wednesday at 2-2:45pm at the Energy Theatre  20-21 March, In person. RDS, Dublin A4S Sustainability In Action Webinar: Capitals Accounting An interactive webinar exploring various aspects of capitals accounting and how it is being applied in practice. The discussion will explore the information needed to tackle a range of impacts. 28 March, 08:00 Accountancy Europe and others How can company boards lead the sustainability transition? The event will also draw on the recent Accountancy Europe, ecoDa and ECIIA publication ESG Governance: questions boards should ask to lead the sustainability transition which sets out practical questions that boards should consider in their efforts on ESG, sustainability transition planning, delivery on sustainability objectives and limiting greenwashing risks. 10 April, 10:30-12:00 CET, Virtual Chartered Accountants Ireland ESG Masterclass: Take your sustainability knowledge to the next level (ROI/NI) Masterclass designed for all professional accountants working in business or practice, wishing to consolidate their knowledge and understanding of the sustainability regulatory, reporting and assurance landscape. 18 April, 08:30 – 13.00, Virtual ICAS Sustainability Summit This event, hosted in association with Accounting for Sustainability (A4S), will bring together sustainability experts and forward-thinking business leaders to explore how we can accelerate the vital business changes needed to save our planet. A specialist line-up of speakers and panellists will delve into the future of sustainable business, the role of technology in the climate transition and the evolving sustainability reporting landscape. The summit also marks the launch of ICAS’ sustainability business network – a collaborative community where professionals can share and benefit from sustainability-related insights. In person, Edinburgh, 25 April 2024. National Sustainability Summit 2024 Dates: May 28-29 Locations: RDS Network for Chartered Accountants working on ESG projects Are you a Chartered Accountant working in ESG or working on ESG-related projects? Would you like an opportunity to engage with other Chartered Accountants working in this space to share insights, challenges and opportunities? Chartered Accountants Ireland now has a network to allow members working in sustainability/ESG to meet and discuss all matters of interest re ESG and accounting. Next: Wednesday, 27 March, 14:00-15.30 Teams If you would like to attend, please email sustainability@charteredaccountants.ie You can find information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre.  

In this week’s Sustainability/ESG bulletin, read about the final progress report on the Climate Action Plan 2023, the ‘4D’ megatrends in Department of Finance economic outlook, the announcement of funding of €34 million for a biodiversity data project, and the launch of a new client advisory panel on Sustainability and ESG by Enterprise Ireland. Also covered is the launch of a circular economy consultation in Northern Ireland and climate measures in the UK Spring Budget, as well as European and global sustainability developments, and the usual articles, resources and events.   IRELAND Final progress report on the Climate Action Plan 2023 The Government has published the final progress report on the Climate Action Plan 2023. The Plan was the second annual update of its kind and the first to be prepared under the Climate Action and Low Carbon Development (Amendment) Act 2021. It tracks the actions that were due for delivery and reporting in Q4 2023 and puts the overall implementation rate for the plan at 65 percent, with 188 of 290 actions set out for the year completed. The report calls for the uncompleted actions to be urgently delivered and for challenges to climate action implementation to be dealt with. The delivery rates of committed actions for the year were not equal to the actions set out in the Climate Action Plan, which creates challenges for legally binding EU and national emissions reduction targets. A public consultation on the Climate Action Plan 2024 is open until 5 April. This Plan builds on the Climate Action Plan 2023 by refining and updating the measures and actions required to deliver the carbon budgets and sectoral emissions ceilings. 4D megatrends in Department of Finance economic outlook The Department of Finance has published a presentation by Chief Economist, John McCarthy, on Economic developments and outlook -short- and longer-term prospects for the Irish economy. The presentation includes, among other things, an analysis of the “Mega-trends” (the ‘4Ds’): demographics, decarbonisations, digitalisation and deglobalisation. The forecasts, which were set out by the Department of Finance in its autumn forecasts (Economic and Fiscal Outlook, October 2023), show the trajectory of carbon pricing and the need to mobilise new revenue streams as a result of the transition to carbon neutrality. Funding for biodiversity data project announced The Department of Housing, Local Government and Heritage has announced funding of €34 million for a project that aims to transform Ireland’s approach to biodiversity data. Biodiversity contributes an estimated €2.6 billion each year to the Irish economy through ecosystem services – such as water or air quality, soil fertility or pollination services – as well as benefits to human quality of life and mental health. Led by the NPWS and supported by the Department of Agriculture, Food and the Marine and Coillte Nature, the new LIFE Strategic Nature Project will bring biodiversity information from multiple sources together to enable enhanced decision-making and support better tracking of progress towards targets. Ireland's human rights obligations periodic review publishes The Department of Foreign Affairs has announced that the expert body responsible for examining Ireland’s implementation of the human rights obligations has published its Concluding Observations on the fourth periodic report of Ireland. The report, issued by the UN Committee on Economic, Social and Cultural Rights, was published following Ireland’s engagement in a review process in February which took account of Ireland’s progress in realising economic, social and cultural rights since the last review in 2015. Progress included adopting the Gender Pay Gap Information Act 2021, Pathways to Work (2021-2025), the Roadmap for Social Inclusion (2020-2025), and others. Recommendations on where further advancements can be made included advancing gender equality, improving data collection, furthering the business and human rights agenda, and combatting discrimination. Enterprise Ireland launches new client advisory panel on Sustainability and ESG Enterprise Ireland has launched new client advisory panels, including on Sustainability and ESG, to examine practical responses to the challenges and opportunities faced by Irish businesses within a rapidly evolving global trading environment. The panels, which will cover the four themes of Scaling, Entrepreneurship, Sustainability & ESG and Local Enterprise, bring together entrepreneurs and senior business leaders to advise on Enterprise Ireland strategy and service delivery. NORTHERN IRELAND Circular economy consultation launches in UK A new consultation has been launched by the Department of Agriculture, Environment and Rural Affairs on how Northern Ireland can improve recycling and waste management to achieve that ambition. Entitled ‘Rethinking Our Resources: Measures for Climate Action and a Circular Economy in NI,’ the 12-week consultation has 26 proposals for change, including the possibility of recycling a wider variety of materials in kerbside bins, enhancing food waste collections and reducing the amount of residual waste allowed. The consultation is open until 5pm on 30 May 2024. Funding for offshore wind and carbon capture in UK Spring Budget 2024 An extra £120 will be allocated to the Green Industries Growth Accelerator to build supply chains for offshore wind and carbon capture and storage, it was announced this week, as UK government published its ‘Budget for Long-Term Growth’. Find more coverage of the UK Spring Budget by Chartered Accountants Ireland here. EUROPE (From our friends in Accountancy Europe): A report has found that the majority of SMEs’ green finance practices are self-financed, with only 35 percent of the 1,232 surveyed having made use of external financing in sustainability investments. The report, published by the EU Platform on Sustainable Finance in January 2024, investigated how the EU’s Taxonomy and sustainable finance framework are helping financial and non-financial actors transition to net zero. Its dedicated section on SMEs presented findings and market trends on SMEs’ sustainable transition practices and show that a significant majority of the surveyed SMEs (58 percent) have already invested in sustainable projects. There are variations across sectors: 69 percent of manufacturing companies, 51 percent of services firms and 54 percent of trading companies have done so, with investments increasing with the size of the SME.   The EU Parliament and Council have reached provisional agreement on new rules that ban products made with forced labour from the EU market. The new regulation would create a framework for enforcing this ban, including through investigations, new IT solutions and cooperation with other authorities and countries. The forced labour regulation focuses on products and will not place additional due diligence requirements on companies that do not use forced labour in their supply chains; however, it is often associated with the Directive on Corporate Sustainability Due Diligence (CSDDD) that was provisionally agreed between Parliament and Council, but that has so far not been given final approval from the Council.   The European Parliament and Council have also reached a provisional agreement on revamped rules to reduce, reuse and recycle packaging, increase safety and boost the circular economy. The new measures aim to make packaging used in the EU safer and more sustainable, by requiring all packaging to be recyclable, minimising the presence of harmful substances, reducing unnecessary packaging, boosting the uptake of recycled content and improving collection and recycling. It sets packaging reduction targets (5 percent by 2030, 10 percent by 2035 and 15 percent by 2040) and requires EU countries to reduce, in particular, the amount of plastic packaging waste. Parliament and Council need to formally approve the agreement before it can enter into force. GLOBAL The fourth annual IFAC and AICPA & CIMA State of Play of global sustainability disclosure and assurance practice has published. The State of Play: Sustainability Disclosure and Assurance benchmarking studies captures and analyses the extent to which companies are reporting and obtaining assurance over their sustainability disclosures, which assurance standards are being used, and which companies are providing the assurance service. The publication shows that nearly all companies reviewed report at least some ESG information and an increasing majority of companies obtained assurance on at least some of that ESG information. Only three jurisdictions reviewed had assurance rates of 100 percent, however, indicating that there is still work to be done.   Also from IFAC: In January 2024, IFAC's Small- and Medium-Sized Practices Advisory Group (SMPAG) heard a presentation about the journey an Italian SMP, Attolini, Spaggiari & Associati, has taken in becoming a B Corporation. Find out more here.   A recently published update to the ‘Oxford Offsetting Principles’ is calling for ‘a major course-correction’ in carbon markets. The Principles, first published in 2020 by the University of Oxford, outline how offsetting needs to be approached to help achieve a net zero society. The revised Principles underscore the core components of the original Principles, calling for a major course-correction in carbon markets and offsetting practices, while also clarifying aspects of the Principles for net zero alignment in areas where authors felt further detail would be beneficial to users. Find out more here Technical RoundUp (From our colleagues in Professional Accounting) EFRAG has launched three educational videos  dedicated to the ESRS Listed SME and Voluntary SME Exposure drafts, which were released for public consultation in January. IAASA has published a Consultation paper on its proposal to adopt a Sustainability Assurance Standard in Ireland. The International Sustainability Standards Board (ISSB) has released its February 2024 update and podcast, which reflects on topical matters in the month. 1,000+ companies, investors and regulators met on 22 February at the IFRS Sustainability Symposium in New York City to exchange insights on the introduction of the ISSB. To support regulators as they plan their journey to adopt the Standards the IFRS Foundation has published the Preview of the Inaugural Jurisdictional Guide for the adoption or other use of ISSB Standards. Did you know? Did you know that this week in Ireland was National Tree Week? Many events around the country were supported by the European Commission, which has a #3BillionTrees Pledge by 2030. The EU also has a new For Our Planet campaign, which aims to encourage citizens and civil society to take action for our planet, including by planting trees.   Calling our members in the Energy Sector Business For Biodiversity Ireland is building on its successful multi-sector Community of Practice (CoP) of businesses coming together to share, evolve and drive change toward a Nature Positive future. The national platform is now convening sector-specific CoPs for 2024 - starting with the Energy Sector.  If you are an energy provider, regulator, renewable energy organisation / expert, community group, NGO or SME specialising in the area of energy and carbon emissions, you can get involved by finding out more here: https://businessforbiodiversity.ie/energy-sscop/ Articles Chartered Accountants and the UN Sustainable Development Goals (Accountancy Ireland - The Bottom Line) Green tax issues in Budget may not be enough to meet UK's net zero (AccountingWeb) SEC Scales Back New Pollution-Disclosure Rules for Companies (Bloomberg) Green audits are coming for a company near you (Financial Times) Upcoming Events     NESC, Making Nature Visible: What Can Natural Capital Accounting Do For Us? Following the publication by the National Economic and Social Council (NESC) of Natural Capital Accounting: A Guide for Action, this in-person event will discuss the potential of natural capital accounting in Ireland. 12 March, 08:30 - 13:30 GMT, In-person, Dublin Royal Convention Centre InvestNI, Supply Chain Conference 2024 Invest Northern Ireland is hosting a free event to help businesses navigate current supply challenges and future-proof their supply chains. Panel discussions and case studies will showcase industry learnings and knowledge on the themes of sustainability, digitisation and supply chain improvements.Industry experts will also outline the steps you can take to stay ahead of the curve in your industry. 12 March 2024, 9:30am - 16:15, Venue: City Hotel, Armagh ICAEW, The EU Carbon Border Adjustment Mechanism (CBAM) - what does it mean for UK businesses? What will the EU's Carbon Border Adjustment Mechanism mean for UK businesses exporting to the EU? 13 March, 12:00 - 13:00 GMT, Zoom CAANZ, Sustainability Seminar 2024 AU The Sustainability Seminar 2024 is designed to elevate your knowledge and confidence in tackling the sustainability challenges faced by accounting, business and finance professionals every day. With sessions designed to enhance your understanding of developments and future trends, we’re shifting the conversation from discussions around conceptual climate risk to embedding sustainable business practices at every level, making sustainability part of business as usual.  Tuesday 19 March 2024, 10:00am to 2:00pm AEDT, Virtual (Zoom) CAANZ,Climate Disclosures Seminar 2024 This two-day seminar will assist delegates to understand the complex landscape of climate disclosures. In 2026, Group 2 organisations will commence reporting on their climate metrics, so finance professionals and executives need to understand now what will be required, and where to begin. Wednesday-Thursday, 20-21 March 2024, Virtual Sustainable Energy Authority of Ireland, The Energy Show 2024 Join SEAI for a host of informative seminars and industry talks as well as over 100 exhibitors from the sustainable and renewable energy sector. Of note: SEAI’s grants and supports for business - The SME Business Grant Briefing on Wednesday at 2-2:45pm at the Energy Theatre  20-21 March, In person. RDS, Dublin A4S Sustainability In Action Webinar: Capitals Accounting An interactive webinar exploring various aspects of capitals accounting and how it is being applied in practice. The discussion will explore the information needed to tackle a range of impacts. 28 March, 08:00 Accountancy Europe and others How can company boards lead the sustainability transition? The event will also draw on the recent Accountancy Europe, ecoDa and ECIIA publication ESG Governance: questions boards should ask to lead the sustainability transition which sets out practical questions that boards should consider in their efforts on ESG, sustainability transition planning, delivery on sustainability objectives and limiting greenwashing risks. 10 April, 10:30-12:00 CET, Virtual Chartered Accountants Ireland ESG Masterclass: Take your sustainability knowledge to the next level (ROI/NI) Masterclass designed for all professional accountants working in business or practice, wishing to consolidate their knowledge and understanding of the sustainability regulatory, reporting and assurance landscape. 18 April, 08:30 – 13.00, Virtual ICAS Sustainability Summit This event, hosted in association with Accounting for Sustainability (A4S), will bring together sustainability experts and forward-thinking business leaders to explore how we can accelerate the vital business changes needed to save our planet. A specialist line-up of speakers and panellists will delve into the future of sustainable business, the role of technology in the climate transition and the evolving sustainability reporting landscape. The summit also marks the launch of ICAS’ sustainability business network – a collaborative community where professionals can share and benefit from sustainability-related insights. In person, Edinburgh, 25 April 2024. National Sustainability Summit 2024 Dates: May 28-29 Locations: RDS Network for Chartered Accountants working on ESG projects Are you a Chartered Accountant working in ESG or working on ESG-related projects? Would you like an opportunity to engage with other Chartered Accountants working in this space to share insights, challenges and opportunities? Chartered Accountants Ireland now has a network to allow members working in sustainability/ESG to meet and discuss all matters of interest re ESG and accounting. Next: Wednesday, 27 March, 14:00-15.30 Teams If you would like to attend, please email sustainability@charteredaccountants.ie You can find information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre.  

  In the early hours of 13 December, an agreement was reached in Dubai at the 28th Conference of Parties to the UN Climate Convention, COP28. The UAE Consensus included a commitment to transition away from all fossil fuels, following intense negotiations over two weeks, and a heavily criticized first draft that was released on Monday. The revised – and final – version represents the first time in COP history that words ‘fossil fuels’ appeared in an agreement. It also included a specific target on tripling renewables and doubling energy efficiency by 2030. “It is an enhanced, balanced — but make no mistake — historic package to accelerate climate action,” COP28 President, Dr Sultan Al Jaber, said, after delegates rose to their feet in to applaud the deal. This COP is reportedly the most significant since the Paris Agreement in 2015, when the countries of the world agreed to limit global warming to 1.5°  above pre-industrial levels. Although not without criticism (natural gas is still identified as a transition fuel, despite causing global warming, for example), responses to the agreement have been positive. Speaking on Irish radio, Minister for Climate, Environment and Communications, Eamon Ryan, T.D., said that the deal is not just about transition away from fossil fuels, but also “building a new, renewable and energy-efficient future and critically changing the entire financial architecture in the world to make that happen everywhere in the world.” Marie Donnelly, Chair of the Climate Change Advisory Council, described the COP process as defeating  the ‘very visible attempt’ by the fossil fuel industry to derail the process and deny the science: “From my perspective, that is a real success… this is the signal. This is effectively the starting gun. Now, we can be serious about the discussion of phasing out fossil fuels.” COPs have come in for much criticism for being too large, too bureaucratic and too much at risk of being influenced by major polluters, the lobbyists of which can outnumber the collective representatives from those countries most vulnerable to the impacts of climate change; however, all parties at the climate summits must agree on every word of the agreements, and to some it underscores how much these UN conferences can achieve. Speaking about this agreement, Special climate envoy to Prime Minister Mia Mottley of Barbados Avinash Persaud stated “When the dust settles and dawn breaks, this will be seen as one of the most historic COPs."  As parties prepared to leave the two-week conference, UN climate chief, Simon Stiell, who described the agreement as “the beginning of the end for fossil fuels”, reminded governments of the next steps:   “We must get on with the job of putting the Paris agreement to full work…In early 2025, countries must deliver new NDCs [‘nationally determined contributions’, i.e. efforts by each country to reduce national greenhouse gas emissions and adapt to the impacts of climate change]. It must bring us into alignment with a 1.5C world. We will keep working to improve the process.” His final message, though, was to ‘ordinary people everywhere’: “Everyone one of you is making a difference. Your voices and determination will be more important than ever. We are still in this race. We will be with you every step of the way.”   Find more news on the global climate summit our our COP28 page on Chartered Accountants Ireland's sustainability centre. 

  Tensions rose at COP28, the UN climate summit in Dubai, with the publication of a new draft agreement, announced at 2pm GMT. The draft was published after COP President, Sultan Al Jaber, had been meeting with all countries in a format called ‘the Majlis’. An Arabic term, ‘Majlis’ are used to refer to a council or a special gathering, typically bringing together a community of elders. Ireland’s Environment Minister, Eamon Ryan, represented the EU in a Majlis of climate ministers, who were encouraged by Sultan Al Jaber to sit in a circle and speak “heart to heart”, to break the deadlock in phasing out fossil fuels. Earlier, the head of the United Nations, António Guterres, had called on world leaders to “end the fossil fuel age” as he returned to COP28 for the final days of the summit. According to the draft agreement, fuel production and consumption will be reduced by 2050 in line with scientific advice. It proposes an approach that “could” include “reducing both consumption and production of fossil fuels, in a just, orderly and equitable manner so as to achieve net zero by, before, or around 2050 in keeping with the science”. While the current text of the agreement avoids the contentious terms ‘phase out’ and ‘phase down’, the wording still requires countries to reduce their fossil fuel production; however, the text has been criticized for being “grossly insufficient.” “We can’t accept the text,” Minister Eamon Ryan reportedly said, adding: “That ‘could’ kills everything”. Other news made headlines from the negotiations at the climate summit: The High-Level Champions and the Marrakech Partnership have released a report called '2030 Climate Solutions: An Implementation Roadmap.' It contains a set of solutions on measures that must be scaled up and replicated in order to halve global emissions, address adaptation gaps and increase climate resilience. Next year’s COP – COP29 – is to take place in Baku, Azerbaijan. Article COP28 draft agreement drops phaseout of fossil fuels (Financial Times) Elements of new Cop28 text are ‘fully unacceptable’, say EU climate chiefs (The Guardian) ‘We can’t accept this’ – Eamon Ryan says proposed Cop28 agreement needs to be ‘radically’ improved (Irish Independent) Podcast In the second of two special episodes from ICAEW, Insights In Focus shares news and views from COP28 in Dubai. guest host Mark Rowland is joined by Sarah Reay, ICEAW Climate Change Manager, ICAEW; Jessica Fries, Executive Chair, A4S; and Mardi McBrien, Chief of Strategic Affairs and Capacity Building, IFRS Foundation.  Counter The Climate Action Commitment Counter, published today by COP organisers, has provided a breakdown of financial pledges and contributions so far: Loss and Damage:$726 million Green Climate Fund:$3.5 billion (up to $12.8 billion) Adaptation Fund:$134 million Least Developed Countries Fund:$129.3 million Special Climate Change Fund (SCCF):$31 million Renewable Energy:$5 billion Cooling:$57 million Clean Cooking:$30 million Technology:$568 million Methane:$1.2 billion Climate Finance:$30 billion from UAE, $200 million in Special Drawing Rights, and $31.6 billion from Multilateral Development Banks (MDBs) Food:$3.1 billion Nature:$2.5 billion Health:$2.9 billion Water:$150 million Gender:$2.8 million Relief, Recovery and Peace:$1.2 billion Local Climate Action:$467 million   Find more news on the global climate summit our our COP28 page on Chartered Accountants Ireland's sustainability centre. 

  Saturday at COP28 focused on nature, land use, and oceans, while Sunday was the first-ever COP day dedicated entirely to food, agriculture and water. Despite food generating one-third of global greenhouse gas emissions, agriculture has attracted very little climate finance. However, since the beginning of this COP, over $3 billion in climate finance has been pledged for food and agriculture. The Dubai climate summit in which “when food came of age as a central means of responding to the climate emergency”, according to Edward Davey, partnerships director at the Food and Land Use Coalition, also saw another first: the publication by the UN Food & Agriculture Organisation (FAO) of a global food systems’ roadmap. The roadmap aims to ensure the world keeps to with 1.5 degrees of temperature rise and transform the world’s agrifood system from a ‘net emitter’ to a ‘carbon sink’ by 2050. The FOA identified 10 priority areas – such as livestock, soil and water, crops, diets and fisheries – where the roadmap can help push the world closer to achieving ‘Zero Hunger’, the second of the 17 Sustainable Development Goals (SDGs). COP28 in numbers $3.8 trillion: value of crops and livestock production lost due to disasters, including floods and droughts, over the past three decades. $3+ billion: amount of climate finance pledged for food and agriculture since the start of COP28. 134: number of countries to have signed Emirates Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action, committing to integrate food into their climate plans by 2025. 70: the percentage of the world’s land that the above countries cover. $200 million: amount of investment pledged for programmes to low-methane animals and develop less potent feed additives (Bezos Earth Fund is also investing in wearable sensors that measure how much cows emit). $200 million: amount pledged by the Gates foundation and the United Arab Emirates to help smallholders in sub-Saharan Africa and South Asia adapt to climate change. 47: the percentage by which global greenhouse gas emissions from livestock will grow by 2050 from 2015 levels if no action is taken. 18: countries which announced that they would align their national climate and biodiversity planning frameworks under the COP28 Joint Statement on Climate, Nature and People. Articles The world’s top five meat companies’ emissions are estimated to be significantly larger than those of the oil firms Shell and BP. The dairy industry’s 3.4 per cent contribution to global human-induced emissions is a higher share than aviation (The Guardian) Ireland is committed to continuing sustainable food production and becoming climate neutral as fast as possible, says Minister for Agriculture Charlie McConalogue (Irish Times)   Find more news on the global climate summit our our COP28 page on Chartered Accountants Ireland's sustainability centre.   

  After a rest day on Thursday, COP28 resumed on Friday 8 December for Week 2 of the global climate summit in Dubai. The second week is the critical week for COPs as it is when government officials negotiate the text of the final agreement. All eyes will be on what the agreement will say about fossil fuels, whether ‘phased out’ or ‘phased down’. Today at COP28 was dedicated to “youth, children, education and skills”. Negotiations will continue over the weekend, focussing on nature on Saturday and on food, agriculture and water on Sunday.   COP28 in numbers $57 billion: The number of financial pledges made so far at this COP. 50: the percentage by which Dubai plans to cut carbon emissions by the end of this decade, compared with 2018 levels. 118: the number of governments that have now pledged to triple the world’s renewable energy capacity by 2030 as part of the Global Pledge on Renewables and Energy Efficiency (China and India did not join). 9: the number of new countries now signed up to the Powering Past Coal Alliance, the group of nations pledging to phase out “unabated” coal power first founded at COP26 in Glasgow. 4: the number of new countries – including Spain, Kenya, Samoa and Columbia – to have joined the Beyond Oil and Gas Alliance group pledging to phase out all fossil fuels. Definitions Unabated  - “doing nothing to remove carbon dioxide and other greenhouse gases from oil, natural gas and coal emissions.” (New York Times). This word will appear with increasing frequency during the negotiations this week, with some commentators saying it could ‘determine the world's future’. Youth-washing  - Similar to greenwashing, this term describes the practice of showboating young voices but not paying attention to them. Watch or listen The Zero podcast from Bloomberg with Akshat Rathi who interviewed Al Gore on how to break the stranglehold petrostates have over COP. Gore also explains why big emitters can no longer hide. Find more news on the global climate summit our our COP28 page on Chartered Accountants Ireland's sustainability centre.   

"We need COP to deliver a bullet train to speed up climate action" Simon Stiell, UN Climate Change Executive Secretary COP28. As COP28 prepares for a rest day on Thursday in advance of the week-long negotiations that will get underway on Friday in Dubai on the language of the final COP agreement, focus shifted onto a new arrival in the UAE. While unlikely to attend the summit, President Vladimir Putin arrived in Abu Dhabi on his first trip to the Middle East since the invasion of Ukraine, reportedly to garner support in the from two major oil producers. Of potentially greater concern to many delegates at this COP, however, is the global stocktake. At this COP governments will take a decision on the stocktake, which is the process for countries and stakeholders to see where they’re collectively making progress towards meeting the goals of the Paris Climate Change Agreement – and where they’re not. “We can only overcome the climate crisis by ditching business-as-usual” Stiell stated.  “All governments must give their negotiators clear marching orders: we need highest ambition, not point-scoring or lowest common denominator politics.” Pointing out that only 50 countries have National Adaptation Plans, Stiell went on to describe the starting text of the Global Stocktake as just a “grab bag of wish lists and heavy on posturing”, urging government to deliver more and go further. “The tools are all there on the table, the technologies and solutions exist. It’s time for governments and negotiators to pick them up and put them to work.” The Global Stocktake – FAQ What is the global stocktake? The Paris Agreement 2015 committed countries  to take serious action on the climate crisis. Parties to the Agreement, some 196 countries, signed up to keep global warming to 1.5°C above pre-industrial levels. The global stocktake was set up to monitor progress against this target. Essentially, it is a global-scale audit of the world’s progress towards the goals of the Paris Agreement. When does it take place? Under the Paris Agreement, countries are to check their progress in 2023, and every five years after that. The first-ever Stocktake is set to conclude at this COP in Dubai. Three events have already taken place at this COP to discuss the stocktake. What do we know so far? A technical report from the stocktake published in September 2023. It shows that we are off track to limit global warming to 1.5°. Our situation is urgent, and countries need to take action to mitigate and adapt and implement. What is meant by ‘mitigate’, ‘ adapt’ and ‘implement’? Mitigate: we need to drastically reduce greenhouse gas emissions (e.g. by replacing fossil fuels with renewable energy sources). Adapt: we need to change our economics and societies to cope with the effects of climate change. These include heatwaves, wildfires, rising sea levels, air pollution, increased sickness, migration and biodiversity loss. Implement: we need to mobilize accessible and affordable climate finance at scale, essentially making the international financial system - including its governance - fit-for-purpose. Why is the stocktake important? The stocktake itself is not as important the global response to it. However, the manner in which countries respond to the results of the stocktake is what will make the difference in the form of higher ambition and accelerated action. Find more news on the global climate summit our our COP28 page on Chartered Accountants Ireland's sustainability centre.   

  Tuesday's focus at COP28 was energy and industry, the just transition, and Indigenous Peoples.  While controversy still surrounds remarks made by COP President about fossil fuels, and reports of the host country’s own plans to increase its own oil production, there was also coverage of high-level agreements at this year’s global climate summit: The second report of the Independent High Level Group on Climate Finance has been released at COP28. 'A climate finance framework: decisive action to deliver on the Paris Agreement' was co-authored by Nicholas Stern and presents a framework which it says can mobilise the estimated $2.4 trillion a year in investment required by 2030. The UK, France and a number of other countries and banks - including the World Bank and European Investment Bank (EIB) – have agreed to include more climate-resilient debt clauses in their lending. Climate-resilient debt clauses (CRDCs) allow vulnerable countries to pause debt repayments when climate disaster strikes, affording them ‘breathing space’ to recover. Welcoming the announcement, Prime Minister of Barbados Mia Mottley stated “I want to thank you for the extraordinary courage to do the right thing.  We can always bring back our debt, but we cannot bring back our society.”   Bill Gates has praised innovation at this year’s COP when he was among those attending the Climate Innovation Forum. The former CEO of Microsoft attended alongside Arvind Krishna, CEO of IBM, Kate Brandt, Chief Sustainability Officer of Google and other world leaders in the technology sector, who convened to explore cutting-edge solutions to tackle the global climate crisis. Solutions discussed included artificial intelligence (AI), satellite technology, big data, clean energy, industrial decarbonization, low-carbon hydrogen, and more. The world’s largest independent carbon crediting standards have announced a collaboration to increase the impact of activities under their standards. The pledge, published by the non-profit organisation IETA, outlines a number of activities which will help amplify the impact of carbon markets. Separately, the US regulator, the Commodity Futures Trading Commission (CFTC), is expected to propose the first federal guidelines for voluntary carbon credit derivatives, in a bit to “bring order to a market for the offset of emissions described as the ‘wild west’”. The value of the carbon trading market worldwide could reportedly expand to $100bn by 2030, up from $2bn in 2022. COP28 in numbers 36.8 billion: the number of metric tons of carbon dioxide that will be emitted this year from burning fossil fuels. 1.1: the percentage increase in those emissions on 2022. 1.4: the percentage increase in those emissions on 2019, before the Covid-19 pandemic.  6: the percentage increase in those emissions since the year of the Paris Agreement, according to research by the Centre for International Climate Research (Cicero) 0: the number of new power plants that should be built anywhere in the world fired by coal (the world's ‘dirtiest fuel’) according to US climate representative, John Kerry. The US has now committed to closing its existing coal power plants and not building any more of them in the future, and have joined the Powering Past Coal Alliance along with seven other countries, although it had to defends its climate leadership despite record oil and gas production (Financial Times) 60: the percentage by which much oil companies must commit to reducing their Scope 1 and 2 emissions by 2030, according to the Executive Director of the International Energy Agency Fatih Birol says 94: the percentage of oil-producing countries to have no pledges on phase out oil exploration, according to a new report from the Net-Zero Tracker. 2,456: the number of fossil fuel representatives at COP28, the largest ever to have attend the climate summit. Quote of the day “Absolutely not.” — Saudi energy minister Prince Abdulaziz bin Salman, on whether he would be happy to see a COP28 agreement on a “phase-down” of fossil fuels (Financial Times)   Find more news on the global climate summit our our COP28 page on Chartered Accountants Ireland's sustainability centre. 

Monday at COP28 was both Finance Day and Gender Equality Day, with discussions on financing gender-responsive just transition and climate action. As Razan Khalifa Al Mubarak, UN Climate Change High-Level Champion said, “Climate change is not gender neutral. Women make up the majority of the world’s poor and despite and maybe because of this women and girls are at the forefront of climate action.” Some highlights: The Gender-Responsive Just Transitions & Climate Action Partnership was unveiled and endorsed by 60 countries contained a three-year package of measures to address the disproportionate impact of climate-related job loss on women.   A report titled "Feminist Climate Justice: A Framework for Action", was launched by UN Women. The report identified the climate crisis as threatening progress on gender equality and human rights, and hindering the achievement of the Sustainable Development Goals. The report describes how to achieve feminist climate justice and provides practical guidance on what countries need to do to transition to low-emission climate-resilient economies that, while recognizing the leadership of women, girls, and gender-diverse people in driving the change that is so urgently needed.   Hillary Clinton said in an interview that the absence of women in climate talks is a major worry (The Independent) Find more news on the global climate summit our our COP28 page on Chartered Accountants Ireland's sustainability centre. 

"Finance is the great enabler of climate action" This was the message of UN Climate Change Executive Secretary Simon Stiell in a speech at a Green Climate Fund event today “Scaling up Access and Impact”.  And it is a key message of this year’s COP, at which a record number of financial executives are attending. Many may be drawn to what Nikita Singhal, co-head of sustainable investment & ESG at Lazard Asset Management, describes as possibly “the greatest alpha-generation or investment-return” in a long time. Singhal  was speaking at the Bloomberg Business Forum at COP28, and was one of several investors who see opportunities for investment returns in action on the twin crises of climate change and biodiversity destruction. “Let's be clear,” said another such investor, Prudential Plc Chair Shriti Vadera, who reminded the Forum “The private sector only does things that are commercial and create a commercial return: they are to preserve the capital of their customers, savers, pensioners and depositors.” Highlights Chair of the IFRS Foundation Trustees, Erkki Liikanen addressed COP28 and reflected on progress since the IFRS Foundation announced the decision to establish the International Sustainability Standards Board at COP26 in 2021.   Export credit agencies, supporting a combined estimated US$120 billion in global trade in 2022, have formed a net-zero alliance. The UN-convened Net-Zero Export Credit Agencies Alliance will be the first net-zero finance alliance comprising public finance institutions. “Public finance has been the missing piece in the net-zero financial landscape,” said Inger Andersen, Executive Director of UNEP. “Export Credit Agencies are in a strong position to deliver more sustainable global trade and to complement the work already being undertaken by the private finance sector”.   Climate Trace the non-profit project has released data “of unprecedented granularity” that shows how countries have been dramatically under-reporting their greenhouse gas emissions;   An 18-month collaboration between leading climate researchers across more than 20 nations has produced a report titled 10 New Insights in Climate Science 2023/2024. The report aims to help inform policy implementation at COP28 and beyond. It warns that humans will increasingly be unable to live in and move from/to places where climate risks continue to rise, and also warns of compound risks which will amplify the climate crisis and increase in uncertainty. Podcast Tripling renewables is one of the goals under discussion at COP28. Find out where more investments are needed and why decarbonizing energy is easier than you think. (Zero)  

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

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

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

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

Susan Rossney, Public Policy Officer, writes: It seems that everyone is talking about sustainability nowadays. Accountants in SMPs are watching the news and listening to the debate. You may well be asking questions like: “What can I do in the face of a global issue?” “How will this affect my practice and my clients’ businesses?” “What questions will my clients ask me next?” “ What expertise should I be developing now?” “How will sustainability work for me?” The sense of urgency to address climate change across the world is intensifying. Droughts, floods and wildfires are increasing, ecosystems are collapsing, and in response people are calling for change. But climate change is part of a broader sustainability challenge – one that can be summed up as ‘environment, social and governance’, or ESG. The responsibility to meet this challenge falls on all businesses and firms, including small ones. As ESG continues its rise up the political and corporate agenda, smaller businesses now more than ever need to meet certain ESG criteria so they can access finance, win contracts or be part of larger companies’ value chains. Clients and consumers also expect businesses to have a positive impact on the environment and to be doing their part to contribute to change. Companies that want to prosper in the future will have little choice but to become sustainable. Small businesses have a crucial role in the transition to more sustainable economies and societies. Accountants are key financial advisors for those businesses, but also need to understand and implement sustainability practices for their own businesses. This article discusses the opportunities for small businesses – and their advisors – in embracing sustainability. “Practices who want to engage particularly with the next generation of staff and clients need to be able to take sustainability seriously and need to be able to demonstrate that” Conal Kennedy, Head of Practice Consulting, Chartered Accountants Ireland Environmental, social and economic issues present huge risks for businesses. Examples include: losing out to competitors; having reduced access to capital; developing weaknesses in supply chains; developing succession risks; and failing to meet the requirements of stakeholders, including consumers, clients, banks, business partners, staff and regulators. Accountants can identify and quantify these risks for their own practices, and develop policies for themselves and their clients to address them. But managing risks against ESG factors can also benefit businesses directly. As this article will show, if properly addressed, it impacts employee welfare, improving employee experience and leading to greater output; it affects ability to access finance; it enhances an organisation’s reputation, helping to attract new business and staff; and it can help companies comply with supply chain requirements of their larger clients. Preparers and auditors of financial statements will also need to consider these issues going forward. Generating new business Many accountants are now adding “sustainability consulting” to their services to clients. As trusted advisors, they can play a key role in helping SME clients think about their potential sustainability risks, and leverage opportunities offered by the sustainable transition. For example - Accountants can help clients to: assess sustainability impact and risks improve efficiencies reduce costs avail of grants acquire finance identify opportunities to expand their range navigate the changes Sustainability is also an increasingly important factor in tendering for contracts with larger organisations which have stricter sustainability goals. Some of these large organisations perform assessments of potential suppliers. Others also carry out regular risk screenings of existing supply-chain suppliers, and/or conduct internal audits and onsite supplier audits to verify that their supply chain suppliers are conforming to their policies. Accountants have a huge role to play in helping companies prepare this information, and in doing so themselves if they are part of these supply chains or are tendering for contracts. Accessing Finance Embracing sustainability is working towards ensuring the financial future of accountants’ businesses or their clients’ businesses. Investors are actively looking to invest in sustainable projects, and are screening out certain sectors or companies (like those heavily reliant on fossil fuels, for example). Businesses seeking this investment benefit from being able to collect and report on their sustainability-related activities against a recognised standard. Many banks are also adopting sustainability criteria and may require proof of sustainable practices from companies looking to avail of finance. There are also business grants as well as support schemes and tax incentives available for organisations looking to transition to more sustainable practices. Again, accountants have a huge role to play in guiding clients through this. Savings Operating in a sustainable manner saves costs. While there may be short-term costs associated with transitioning to a sustainable business model, businesses can recoup the investment they make and can also reduce their business costs by introducing more sustainable ways of working. According to the Sustainable Energy Authority of Ireland (SEAI), the average SME can save up to 30% on its energy bill by becoming more energy efficient. A business with an engaged and motivated team is also less likely to experience high employee-turnover and associated costs. In a drive to decarbonise Ireland’s economy, the rate of carbon tax increased by €7.50 in October 2020 from €26 to €33.50 per tonne/CO2. Reducing your carbon emissions will reduce your cost. Ultimately, though, any costs associated must be reframed as the cost of compliance or risk management. The greater costs are the costs of not being sustainable. Reputation With social media increasing access to companies, there are very few places to hide for organisations which are falling short of sustainability-related expectations. Staff expect it, and customers demand it. Companies not being transparent about their sustainability achievements, or their goals, will be called out by their customers and staff. Likewise, there is little patience for companies that are ‘green-washing’, i.e. presenting a false or misleading green public image. “64 percent of customers are ‘belief-driven buyers’ who will choose, switch, avoid or boycott a brand based on its stand on societal issues.” 2019 Edelman Trust Barometer Special Report: In Brands We Trust? Mobile Survey Attracting clients On the flip side, though, organisations that do embrace sustainability are in a strong position to attract clients. They can do this by becoming more visible in their community. Supporting local literacy or numeracy projects, participating in local charities or sports clubs, or engaging in local-tree planting initiatives not only increases brand awareness of a firm or business: it builds trust with a community. Remember – not everyone may be doing this, so you will have a first-mover advantage if you do. As a greater number of large companies are either required to or decide to report on human rights, diversity and climate-related policies, a greater number of local businesses supplying those companies will also be obliged to disclose their own sustainability practices, and will need help from a financial advisor to do so. Accountants who are experienced in offering clients this support may attract more clients looking to comply with the sustainability requirements of large organisations. Attracting & retaining talent Candidates are actively seeking jobs in companies with strong ESG credentials and are rejecting jobs in those companies not aligned with their own values. What was identified by McKinsey in 1997 as the ‘war for talent’ is as fierce as ever within the professional services sector, and organisations are going to great lengths to recruit talent. These same companies are now including their commitment to ESG values as a competitive differentiation. This is a trend seen by Karin Lanigan, Head of Member Experience in Chartered Accountants Ireland: “I have worked in recruitment for more than 20 years and in recent years, I have noticed a growing trend whereby candidates have become more and more discerning about types of organisations they’ll work for. They are not just considering salary and package; they are looking at the sector, at the reputation of an organisation, and asking themselves ‘will I feel proud if I’m out with my friends on a Friday night to say that I work with whatever the organisation is or whatever the sector is that they are in?’ They want to have sense of pride in their place of work.” Remember: a commitment to ESG does not have to mean having a large sustainability department or running an eco-business. It can also mean being a firm or company that looks after its employees, provides good training and promotion opportunities, and is active in its local community. “With ‘measurements’ everyone thinks of ‘carbon footprint’. But it doesn’t have to be. You can measure staff satisfaction through surveys. You can measure employee-turnover and retention or absenteeism. Encourage staff to measure the number of hours they spend giving back to others in the community.” Teresa Campbell, PKF FKM Impact on Financial Statements Preparers and auditors of financial statements should consider the impact on sustainability and climate change on every entity. Quoted companies, and some categories of larger companies have defined obligations to report on the impact of environmental matters on the companies’ businesses. These specific reporting requirements do not apply to private limited companies reporting under FRS 102. However, climate change and sustainability are major and developing issues that cannot be ignored by anyone. Both IAASA and the FRC have recently commented on matters that they expect to see considered in financial statements. Whilst their comments were largely made in the context of the IFRS framework, much of what they have said is directly applicable to financial statements prepared under FRS 102. Accountants should consider and report on how climate change has impacted on the assets and liabilities of the company, what additional risks have emerged and whether new or increased provisions are necessary. How has climate change impacted on the estimates and judgements applied, and do these need to be disclosed? Consider such matters as the useful lives of property, plant and equipment. Consider also the impact on impairment assumptions. Does the entity have an obligation to remediate environmental damage caused by any of its activities? Have any of its contracts become onerous, or are they likely to? The financial statements, taken as a whole, should contain sufficient information to be useful to stakeholders, and preparers should avoid the use of non-specific boilerplate. See IAASA’s recent observations on published financial statements. The Institute will cover these areas in more detail in future issues of Practice Matters, broadcasts of Practice News, and CPD courses. Some member resources Find more on the Institute’s Sustainability Hub with resources from articles, podcasts and webinars to a glossary explaining the acronyms and terms. You can also find tips in the Institute’s guide on Sustainability for Accountants. This free guide for accountants describes what to do – and where to start – to operate sustainably, successfully and cost-effectively.  

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.

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.”

  On June 23 IFAC responded to the European Commission’s review of the Non-Financial Reporting Directive (NFRD). In this review IFAC urged the Commission to adopt a global mindset by engaging input from a broad range of international stakeholders in determining the best way forward.  Steps taken must “fit within” a global system and avoid regional regulatory fragmentation.  Non-financial reporting answers the call from investors and other providers of capital for better, broader information about company performance and prospects for value creation, while also helping identify opportunities to support sustainable—and less carbon-reliant—business models. In the post-COVID world, corporate reporting that reflects the needs of a broad range of stakeholders will be particularly important to communicate on an organization’s performance and priorities.     As a Network Partner of the B20, IFAC calls on global bodies—including the G20—to encourage policy-makers, standard-setters, and regulators to facilitate harmonization towards a globally-acceptable approach to reporting ESG metrics and disclosures.