Our webinar on 7 February 2024 covered how Finance and IT Teams can partner to deliver sustainability reporting programmes compliant with the Corporate Sustainability Reporting Directive ('CSRD') requirements. Speakers David Codd and Paul Power, described how to establish effective collaboration between the finance and IT teams, what pitfalls to avoid and how to build a strong partnership to deliver an effective sustainability reporting programme. ***Watch back here *** Links to resources mentioned in the webinar:   Question and Answers Factsheet from Chartered Accountants on the Corporate Sustainability Reporting Directive and the European Sustainability Reporting Standards.   Webinar: CSRD and SMEs in value chains,  Chartered Accountants Ireland at Climate Finance Week Ireland 2023.   Webinar: Further your knowledge about the European Sustainability Reporting Standards, 8 June 2023 Dee Moran, Chartered Accountants Ireland, and Orla Carolan, Director in Grant Thornton demonstrate how to navigate the content and disclosures included in the first set of ESRSs. Watch Webinar   Webinar: Further your knowledge about the Corporate Sustainability Reporting Directive (CSRD), 23 May 2023 Dee Moran interviewed Lisa Campbell, Head of Operations in Irish Auditing & Accounting Supervisory Authority (IAASA) to understand more about the Corporate Sustainability Reporting Directive (CSRD) and what future developments might mean for Irish organisations.   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 new Desposit Return Scheme, new funding available for sustainable disruptive technologies, the survey for signatories to the Women in Finance Charter, the report from the Platform on Sustainable Finance, ESG policies in credit unions, Renewable Energy and Net Zero in Northern Ireland, the ECB stepping up its climate work and the new EU law against greenwashing as well as technical roundups, resources, articles, and upcoming events. IRELAND Deposit Return Scheme launches in Ireland   The Deposit Return Scheme is now launched across Ireland, meaning that anyone buying a plastic bottle, or an aluminium or steel can with the Re-turn logo will pay a small refundable deposit, which can be returned in full when they bring it back to participating shops and supermarkets. Full details of how the scheme works is on this video (4 min).  Funding of €6.8 million announced for sustainable disruptive technology  Funding of €6.8 million has been announced for a project under Call 6 of the Disruptive Technologies Innovation Fund (DTIF) in Ireland. The €500 million fund was established under the National Development Plan (NDP) in 2018, and is managed by the Department of Enterprise, Trade and Employment with administrative support from Enterprise Ireland. This brings to €371 million the amount that has been awarded to projects across six DTIF Calls. All projects under Call 6 are expected to demonstrate a positive contribution to the sustainability targets in the Climate Action Plan.   Sustainable infrastructure investment manager fund closes  The leading listed private equity and sustainable infrastructure investment manager Foresight Group has announced the second close of the AIB Foresight SME Impact Fund. This Fund provides investments of €2-€5 million to companies across Ireland and Northern Ireland, and provides operational guidance, support on implementing sustainable best practices and creating high-quality, local jobs across Ireland. The Ireland Strategic Investment Fund (ISIF) made a commitment of €25 million to the Fund and has so far committed over €600 million as part of its €1 billion climate investment programme.  EPA publishes 2023 highlights  The Environmental Protection Agency (EPA) has published EPA Highlights 2023, showcasing its work in addressing environmental challenges across Ireland. Highlights include a recorded drop in Ireland’s greenhouse gas emissions in 2022, but a projected shortfall of 21 percent in overall emissions reduction by 2023. Upcoming events for 2024 noted in the publication include the Reporting of annual EU Emissions Trading System results in April, and September’s Circular Economy Conference.  Women in Finance Charter survey open  The ESRI, the data partner for Ireland’s Women in Finance Charter, has announced it is now collecting, analysing, and reporting on data from signatories to the Women in Finance Charter. Data from this survey will feed into the Women in Finance Chater 2024 report. Firms that signed the Charter committed to achieving greater gender balance across their organisations, setting targets appropriate to the company, and formulating an action plan to achieve these targets. The closing date for the survey is 2 February.  Sustainable finance report shows positive impact  A new report published by the Platform on Sustainable Finance, an advisory body to the European Commission, shows that the EU sustainable finance framework is being picked up by different market actors as an effective toolkit to navigate the transition to net zero, and has already had a positive impact on the ground. The Platform on Sustainable Finance will present the report “A Compendium of Market Practices” during a webinar on Tuesday 6 February, 13:00 – 14:20 (Brussels time).  Credit Unions and ESG policy  An amendment to the Credit Union Act 1997 (1997 Act) will see environmental social and governance (ESG) policy for the first time being included as a policy for the boards of credit unions in Ireland to approve, review and update. The new Act amends section 55 of the 1997 Act where the board has obligations to approve review and update plans policies and procedures at least every three years, instead of annually. The amending Act – the Credit Union (Amendment) Act 2023 (2023 Act) - was signed into law in December 2023 but has not yet been commenced.   NORTHERN IRELAND Renewable Energy and Net Zero in Northern Ireland    A Northern Ireland Affairs Committee inquiry into Renewable Energy and Net Zero in Northern Ireland was held this month into barriers to renewable energy across the region. Recent figures have shown that Northern Ireland is not on track to meet this target, as renewable energy expansion has stalled in the last year. MPs were reportedly concerned that the sector will fail to meet its legally-binding target of 80 percent of energy consumption from renewable sources by 2030, and there were calls for reform to legislation and support for renewable energy development.   2024 Responsible Business Awards in Northern Ireland open for entries  Entries are now being accepted for the Responsible Business Awards in Northern Ireland 2024. The Awards showcase transformational stories of businesses taking real action to build thriving communities and innovate to tackle pressing social issues and to repair and rebuild our planet. The 2024 Awards are open for entries until 26 April.  EUROPE EU Sustainable Investment Summit  Speakers from across the world gathered in Brussels on 24 January to take part in EU Sustainable Investment Summit, the European Commission’s flagship annual event on sustainable investment.  The summit discusses the delivery of the green transition in the European Union and beyond. This is the fourth such summit, which began in 2021 following the launch of the European Green Deal – which sets the objective for Europe to become the first climate-neutral continent by 2050 – and the European Green Deal Investment Plan, which aims to unlock the investments and finance needed to achieve this goal.  ECB steps up climate focus   The European Central Bank (ECB) has decided to expand its work on climate change, identifying three focus areas that will guide its activities in 2024 and 2025: implications of green transition, physical impact of climate change, and nature-related risks for the economy and financial system. The work planned for these focus areas will complement the ECB’s current climate-related actions in its ongoing tasks, including monetary policy and banking supervision. A comprehensive overview of the planned work programme for 2024 and 2025 is available in the Annex and more information can be found on the ECB’s website.  New EU law against greenwashing  MEPs have adopted a new law banning greenwashing and misleading product information. Under the new Greenwashing Directive, generic environmental claims (such as “environmentally friendly”, “natural”, “biodegradable”, “climate neutral” or “eco”) and other misleading product information will be banned, and only sustainability labels based on approved certification schemes or established by public authorities will be allowed. It will ban claims that a product has a “neutral, reduced or positive impact on the environment because of emissions offsetting schemes”, and it will make producers and consumers focus more on the durability of goods.   The Directive is meant to work together with the Green Claims Directive, currently being discussed at committee stage in Parliament, and which will be more specific and elaborate the conditions for using environmental claims in greater detail. The Greenwashing Directive now needs to receive final approval from the Council and be published in the Official Journal after which Member States will have 24 months to transpose it into national law.  Technical Roundup   (More from our colleagues in  Professional Accounting)  EFRAG has launched a public consultation on the sustainability reporting standards for listed SMEs and for non-listed SMEs who wish to voluntarily report on their sustainability activities. This consultation will remain open until 21 May 2024.   The International Ethics Standards Board for Accountants (IESBA) has launched two exposure drafts on ethical considerations in sustainability reporting and assurance. The Exposure Drafts cover International Ethics Standards for Sustainability Assurance as well as Using the Work of an Expert. Comments are requested by 30 April.  The International Sustainability Standards Board (ISSB) has released its January 2024 podcast. Emmanuel Faber and Sue Lloyd (Chair and Vice-Chair of the Committee) discuss recent developments and their priority areas for the upcoming year.  The International Federation of Accountants (IFAC’s) recent episode of “The Fast Future with IFAC” includes excerpts from a presentation to IFAC's SMP Advisory Group on topics related to sustainability.  Resources  Accounting 4 Sustainability (A4S) Academy opens  The A4S Academy is now open for applications. The 18-month online learning and implementation programme is for senior finance leaders to embed sustainability.  It equips finance teams with the skills needed for their businesses to succeed in the face of environmental and social risks and opportunities.   Energy audit  The Sustainable Energy Authority of Ireland (SEAI) is promoting a voucher of €2000 for eligible businesses to seek a professional energy audit. The eligibility criteria, along with a more comprehensive overview of the scheme, are available on the SEAI website.  Opportunities and approaches for Sustainable Public Procurement  A new resource on Sustainable Public Procurement is available online for practitioners and policy makers. The guide describes opportunities and approaches for Sustainable Public Procurement and is intended to be of use to procurement practitioners and budget-holders in the public sector, as well as to policy developers interested in how public procurement can be used strategically to address key sustainability policy objectives.  Micro-qualifications for sustainability training  Green Further Education and Training micro-qualifications are now available to employees who want to contribute to sustainability in the workplace.  Created by industry for industry, the programmes provide short, stackable accredited qualifications tailored to fit employees’ schedules at little or no cost to employers. Programmes are delivered nationwide by the Education and Training Board network under the Skills to Advance initiative and are funded by SOLAS.   Articles  Businesses called to embrace corporate social justice (RTÉ)  Ireland can reduce impact of extreme climate events by transforming economy, experts suggest (Irish Times)  Warrior accountants: leading the green revolution? (Financial Times)  Upcoming Events   Platform on Sustainable Finance,  Launch of report “A Compendium of Market Practices”  Webinar, 6 February, 13:00 – 14:20 (Brussels time).  Chartered Accountants Ireland, CSRD – Building Finance & IT partnerships   Webinar on how Finance and IT Teams can partner to deliver sustainability reporting programmes compliant with the Corporate Sustainability Reporting Directive ('CSRD') requirements. Wednesday, Zoom, 7 February 2024 12:00 – 12.45  Sustainable Energy Authority of Ireland (SEAI) Energy Management: Creating an Energy Action Plan    Free online workshop next week teaching the basics of implementing energy management within your business.   8 February, 14:00-16:00.   Accountancy Europe Supporting SMEs with sustainability information  Environmental, Social and Governance (ESG) data requests that SMEs are getting from financial institutions and large value chain partners, voluntary initiatives such as the planned non-listed SME standard for sustainability reporting, the OECD’s work and industry-led initiatives, and SMEs’ support requirements for their sustainable transition  21 February, 17:00 - 19:00 Brussels time  A4S Sustainability In Action Webinar: Management Information  An interactive webinar focusing on techniques to help finance professionals develop and integrate information needed to respond to social and environmental risks and opportunities into core management information processes.  27 February, 08:00    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 GMT  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  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.  When: Wednesday, 28 February, 14:00-15.30  Where: 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 a consultation on Ireland’s National Adaptation Framework, Ireland’s fourth National Biodiversity Action Plan and a report on Ireland’s approach to natural capital accounting. Also covered are funds for climate action in Ireland and Northern Ireland, the declining cost of pollution in Europe and tax updates, technical roundups, newsletters, articles, podcasts and upcoming events.   Consultation on Ireland’s National Adaptation Framework A public consultation on the National Adaptation Framework under Ireland’s Climate Action and Low Carbon Development Act 2015-2021 is open until 19 February to gather feedback from relevant stakeholders and members of the public on the draft National Adaptation Framework. The framework specifies the national strategy for the application of adaptation measures in different sectors and by local authorities to reduce the vulnerability of the State to the negative effects of climate change and to avail of any positive effects that may occur. Accounting for nature Ireland’s fourth National Biodiversity Action Plan (NBAP) has launched, the first such plan to be backed by legislation. The plan, ‘Actions For Nature’ addresses key recommendations from the Citizen’s Assembly on Biodiversity Loss and includes actions such as expanding National Parks, tackling invasive species, strengthening efforts on wildlife crime and working with communities. It sets out how to reverse the decline in biodiversity in Ireland, which poses serious threats to societal wellbeing and economic development. Separately, the National Economic and Social Council (NESC) has published a report to inform Ireland’s approach to natural capital accounting. The report, Natural Capital Accounting: A Guide for Action, recommends three areas of action that can be taken to help develop natural capital accounting and to help embed it into the wider policy making system: capacity building; putting a spotlight on ecosystems services; and further integrating natural capital accounting into policy decisions. EPA publishes Ireland’s Climate Change Assessment (ICCA) The Environmental Protection Agency (EPA) has published Ireland’s Climate Change Assessment, the first comprehensive and authoritative assessment of the state of knowledge of climate change in Ireland. It aims to identify opportunities that may arise from the planned transition to a climate neutral, biodiversity-rich, environmentally sustainable and climate resilient economy and society. The report finds that Ireland needs to be resilient to ongoing and future climate change impacts, and that implementation of climate adaptation measures is currently too slow and fragmented. It also finds that immediate and sustained transformative mitigation and adaptation actions are likely to yield substantial benefits for health, wellbeing and biodiversity in Ireland while reducing vulnerability to the adverse impacts of climate change. Community Climate Action ‘mega fund’ launches A €27 million fund for Community Climate Action has been launched for local organisations working to build low carbon communities. The ‘mega fund’ comprises both the national Climate Action Fund allocation of €24 million and an allocation of €3 million provided by the Government’s Shared Island Fund to support cross-border and all-island community climate action initiatives. The climate funding programme, which will be administered by local authorities, will be flexible enough to provide lesser amounts as needed to smaller and medium sized local action programmes. Energy in Ireland Report Ireland’s energy demands are increasing, and emissions are not reducing fast enough, according to the annual Energy in Ireland report published by the Sustainable Energy Authority of Ireland (SEAI) in December 2023. According to the report, Ireland imported 81.6 percent of its energy in 2022, and 85.8 percent of energy came from fossil fuels. While energy emissions in 2022 were found to be the lowest of any year in the last quarter century (not counting 2020 which was strongly impacted by COVID 19), the pace of emission reductions is not sufficient to meet our national climate obligations. Multi-million-pound package for UK businesses to cut their emissions The UK government has announced a multi-million-pound package to help businesses cut their emissions and energy bills. The funding – which amounts to over £190 million – comprises £6 million for winners of the Local Industrial Decarbonisation Plan competition and £185 million under a new phase of the Industrial Energy Transformation Fund, to be made available later this month. Speaking about the announcement Head of Green Economy Development at Invest Northern Ireland, Rachel Sankannawar said it will “bolster our efforts to unlock the economic possibilities of a low carbon future for Northern Ireland… enhance our competitiveness globally …[and] support us to boost our productivity and contribute to reducing our emissions.” More information on how to apply to the next phase of the Industrial Energy Transformation Fund is available here. Decline in cost of pollution from European industry Updated analysis by the European Environment Agency (EEA) shows that while air pollution from large European industry continues to cause significant damage to the environment, climate and people’s health, the cost of air pollution has declined by about a third during the past decade. Analysis published shows that just a small fraction of the most polluting facilities — many of them coal power plants — causes half of the total damage. The EU energy sector accounted for the vast majority — about 80 percent — of the total decrease, achieved mainly by adopting best available techniques (BAT) and shifting to renewables and less polluting fuels largely as result of EU action. Sustainability a business imperative at Davos Sustainability as a business imperative was reportedly among the themes as this year’s World Economic Forum meeting, which took place from 15-19 January in the Swiss mountain resort of Davos. Business leaders and politicians, along with key figures from academia and the not-for-profit sector, attended the meeting, which was titled “Rebuilding Trust”. The event focused on the four themes of security and cooperation, jobs and growth, AI, and climate and nature. Tax News (From our colleagues in the Tax Team) The European Commission has published the default values for determining embedded emissions during the Carbon Border Adjustment Mechanism (CBAM) transitional period (which runs to the end of 2025). These values will be revised regularly from the first reporting period (Q4 2023). CBAM is the EU’s key tool for combatting carbon leakage and is a central part of the Fit for 55 Agenda.  Revenue has updated the Tax and Duty Manual which provides guidance on the income tax exemption of certain profits from the microgeneration of electricity by an individual their main residence.  Following the extension to 31 December 2025 of the scheme for accelerated capital allowances for energy-efficient equipment, as provided for in section 285A TCA 1997, Revenue has updated the relevant Tax and Duty Manual.   Technical Round-Up (From our colleagues in Professional Accounting on 19 January and 5 January ) IFRS and GRI have published a summary of interoperability considerations for greenhouse gas (GHG) emissions. IFAC has published “A Literature Review of Competencies, Educational Strategies, and Challenges for Sustainability Reporting and Assurance”. ISSB has issued its December 2023 update and podcast and has published amendments to the SASB Standards (intended to enhance their international applicability). EFRAG has issued a call to SMEs for participants to test forthcoming exposure drafts on voluntary sustainability reporting standards for non-listed SMEs and ESRS for listed SMEs. published three draft Implementation Guidance documents, open for public comment until 2 February announced, with the Taskforce on Nature-related Financial Disclosures (TNFD), a cooperation agreement and shared commitment to enhance corporate transparency related to biodiversity and ecosystems. On 22 December 2023, the ESRS Delegated Act and Annexes were published in the EU Official Journal (see EFRAG’s page)   Sustainability Newsletter (from our friends in Accountancy Europe) European Parliament and Council stroke deal on CSDDD European Commission provides additional guidance on EU Taxonomy Disclosures European Council reaches position on ESG ratings proposal European Securities and Markets Authority’s consults on draft guidelines on enforcement of sustainability information International Ethics Standards Board for Accountants (IESBA) exposure draft on International Ethics Standards for Sustainability reporting and assurance International Organization of Securities Commissions (IOSCO) IOSCO lays out its strategic priorities at COP28   Articles ESG and sustainability – what’s the difference?(Briefly from Accountancy Ireland) Your IT team’s vital role in sustainability reporting (Briefly from Accountancy Ireland) Listen In this podcast, Sinead Kelly, Tax Director at PwC helps demystify ESG and describes upcoming policy changes. Upcoming Events UN Global Compact Network UK Collecting Scope 3 Data Webinar Series 2024 The UN Global Compact Network UK are hosting an interactive four-part webinar series in 2024 to support businesses to efficiently collect Scope 3 emissions data from across their value chain. This series will explore how companies can collect Scope 3 data using a variety of tools, surveys, and software and will feature case studies and insight from businesses on good practice in this area.   Chartered Accountants Ireland CSRD – Building Finance & IT partnerships Finance professionals are working hard to understand the implications of the CSRD, and to implement the necessary reporting for their businesses. But their colleagues in IT also have a vital part to play. This webinar will examine how to establish effective collaboration between the Finance and IT teams, what pitfalls to avoid and how to build a strong partnership to deliver an effective sustainability reporting programme Wednesday, Zoom, 7 February 2024 12:00 – 12.45 Accountancy Europe Supporting SMEs with sustainability information Small and medium-sized enterprises (SMEs) report that their larger value chain partners and finance providers are increasingly asking them for sustainability data to fulfil regulatory requirements. The Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D) leave most SMEs out of their scope, but their indirect impact in small businesses – which often operate with limited know-how and resources – is still significant. 21 February 2024 (17:00 - 19:00) Brussels time   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, 21 February, 14:00-15:30 Online via 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 complex landscape of corporate decision-making, understanding the differences between ESG and sustainability is crucial, writes Dan Byrne Corporate decision-making today involves a lot of talk about the environment, social and governance (ESG) and sustainability – precisely, how your company will fit into both movements. No one wants to discover they don’t know the difference between the two in the middle of a board meeting. While the two ideas share a lot of overlapping principles, they are different. It is essential to understand these difference because, once you sit down with colleagues to oversee core strategic decisions, you must have robust knowledge about the relevant topics. The difference between ESG and sustainability Sustainability is a principle dictating that, while we must look after the needs of our current society, it cannot be to the detriment of future generations. The concept of sustainability is so broad that it inevitably means different things in different boardrooms. The common thread in most organisations is that sustainability principles guide stakeholder expectations and, as a result, company strategy. ESG isn’t a principle; it’s a framework for measuring specific impacts and risks. It is a tool that can help investors and stakeholders to understand where their money is going. Why the confusion? There is a lot of overlap between ESG and sustainability, so organisations often file them under the same heading. In practice, companies embracing ESG will often commit to not harming the planet (environment), its people (social) or themselves (governance). While this should always be approached with the understanding that ESG is an investment metric and tool for analysing risk, it can be easy to generalise to the point that ESG is instead viewed as a sustainability metric or simply another name for sustainability itself. This is particularly true when companies focus on the “E” part of ESG. It’s popular across multiple industries and wins the backing of key stakeholder groups. An organisation’s focus on the environment creates a natural overlap with sustainability activities. Avoiding confusion in the future If you are in a board meeting and find yourself hovering around both topics, be sure not to hint that they’re the same with these tips: Remember that ESG is a collection of metrics; sustainability is a principle; If you’re talking about ESG, you will likely end up talking about numbers, quantities, reporting and investment opportunities. If you’re talking about sustainability, it’s expected more in the context of organisational goals, culture and policies; and Sustainability, in many respects, is the end goal. ESG is a pathway and a framework that will allow you to get there. Dan Byrne is a writer with the Corporate Governance Institute

The much-anticipated Chartered Accountants Ireland Annual Dinner takes place tonight (Friday), at the Convention Centre Dublin. How does the largest professional accountancy body on the island of Ireland, intent on building a more sustainable Institute and profession, put together an event for over 700 people and embrace sustainability? Institute Sustainability Officer Susan Rossney takes a closer look. The venue The Convention Centre Dublin (CCD) is the world’s first carbon-neutral constructed convention centre. It is also one of Europe’s most environmentally friendly venues. Members can learn more about its waste-management, eco produce, heating, cooling and lighting on its website. It is one of only three venues in Ireland to hold the ISO 20121 accreditation in Event Sustainability Management Systems, which it secured in 2021. The accreditation was awarded by SGS, the awarding body in Ireland on behalf of ISO, an independent, non-governmental international organisation with a membership of 165 national standards bodies. ISO counts all actions, from relying on tap water instead of plastic bottles to encouraging use of public transport. The CCD also holds Quality Standard ISO 9001 and Environmental Standard ISO 14001, as well as British Security Standard BS7499. Each client of the CCD has the option to make a positive impact on the environment by investing in projects run by the Irish initiative Grown Forest. Chartered Accountants Ireland availed of this option when booking the Annual Dinner, by investing in biodiversity projects, which includes the planting of 40 native Irish woodland trees within its woodland borders. Our speakers Sonya Lennon Multi-award-winning entrepreneur and designer Sonya Lennon is dedicated to the value of gender equity in Ireland. With a master’s degree in business equity, diversity and inclusion, Lennon’s high-profile advocacy work includes campaigning for gender pay gap legislation and childcare reform. Founder of social enterprises WorkEqual and LIFT Ireland, Lennon’s focus on social sustainability is also matched by her focus on environmental sustainability. “Climate change is a consideration with everything” she announced in June 2023, going to say that Lennon Courtney is “entering a new phase as a company, one with sustainability at the forefront in all its forms.” Johnny Sexton Following a sensational rugby career, Johnny Sexton recently took up the role of Chief of Staff for the Ardagh Group, the sustainable packaging company. In interviews Sexton has emphasised wellbeing in the workplace, mental resilience, and the ability to switch off and to stay motivated for the 'always on' generation, in both sport and business. He is also an investor in plastics-free drinks company, DASH, a certified B-Corporation that prioritises reducing food waste. MC Dearbhail McDonald MC for the evening is journalist, author and broadcaster, Dearbhail McDonald. Alongside her achievements in journalism and media – including several awards for her contribution to public affairs journalism – Dearbhail also cofounded the Equality Expert Group (EEG), a collective of experts drawn from a variety of fields, public and private, seeking to support equality and diversity in Irish social, economic and cultural life. Dearbhail’s 2019 documentary ‘Fertility Shock’, RTÉ, addressed the future of work, diverse workforces and the impact of fertility trends on economic growth. Members will also have seen Dearbhail in this week’s documentary ‘The Last Priests and Nuns in Ireland’, which examined the role of nuns in Ireland to see how they have shaped Irish lives, including her own, for better or for worse. Find out more about sustainability at Chartered Accountants Ireland in this two-minute video with Sustainability Officer, Susan Rossney.

  Sustainability (often described as environment, social, governance or ‘ESG’ by finance professionals) is a fast-developing area. Chartered Accountants Ireland’s Sustainability Officer Susan Rossney looks at key trends for 2024, and speaks to thought leaders on what to expect in the year ahead. Elections 2024 will be a year of elections. More than 60 countries representing half the world’s population - 4 billion people - will go to the polls. Voters are expected to turn out in Ireland, the US and, potentially, the UK and for elections to the European Parliament. In the words of former UK cabinet minister for Energy, Chris Skidmore: "the climate crisis that we face is too important to politicise or to ignore." That being said, the elections are predicted to involve much political debate around ESG and environmentally-focused investing. They are also taking place against a backdrop of ‘simmering geopolitical tensions’ – including mistrust in elections. This is according to the World Economic Forum’s 2024 global risk report, which puts extreme weather events, misinformation and disinformation, and societal polarization as the 3 risks most likely to present a material crisis on a global scale in 2024. Policies In early 2024, Ireland can expect a public consultation on its Climate Action Plan 2024, the fourth such plan since 2019. Circular economy measures will also come into effect. For example, under the Deposit Return Scheme starting February 2024, plastic bottles and aluminium /steel cans can be returned to retail outlets in exchange for a small deposit. Expect to see a public consultation in 2024 on the National (Climate) Adaptation Framework also, as Ireland records record-breaking weather extremes in 2023 (and see more on weather below). 2024 will also see the development of an Irish national centre for electric vehicle (EV) skills to train people to repair and maintain electric cars, bikes, scooters, trucks, buses, vans and heavy goods vehicles. (Global expectations for passenger EV sales predicts an increase of 21 percent in 2024 to 16.7 million EVs, with 70 percent of those being fully electric.) In the UK, a consultation is pending on the design of a UK Carbon Border Adjustment Mechanism (CBAM), a mechanism to be introduced in 2027. The EU already has a CBAM, which entered its transitional phase on 1 October 2023. A consultation is also open on a UK emissions trading scheme (ETS) markets policy. ‘Transition finance’ moving centre-stage Transition finance is expected to increase in prominence in 2024. The term broadly refers to financing private investments to help economies and societies transition from reliance on fossil fuels. Examples of transition finance activities include green and sustainability-linked bonds and loans, but grants also come under the definition. FCA and founder of Tactive, Gordon Naughton, is looking forward to seeing the EU start approving sizeable grant funding to large-scale sustainability projects that will have a meaningful impact on Ireland’s emissions, such as the recent EU approval of Germany’s €902 million grant to Northvolt for a battery factory. “This is a seminal moment for the EU and represents a sizeable shift in policy” Gordon says, further commenting: “previously, grant funding within the EU was mostly focused on R&D funding and steered away from capacity building due to WTO rules. Witnessing the success of the US Inflation Reduction Act, the EU is now embracing green capacity building grants which is good for competitiveness and the planet.” Preparing for the CSRD … With effect from financial year beginning on or after 1 January 2024, some of the largest companies in Ireland will begin reporting under the Corporate Sustainability Reporting Directive ('CSRD'), and as a result, the European Sustainability Reporting Standards (‘ESRS’). The CSRD must be transposed into national law by EU Member States, including Ireland, by July 2024. “The reporting of sustainability matters under the CSRD represents the dawn of a new era in corporate reporting for entities” says Mike O’Halloran, Technical Manager with Chartered Accountants Ireland, highlighting the important role that the CSRD will play in ensuring that the climate goals of the European Union are met. “The Directive is a key component in the EU’s goal of transforming itself into a modern, resource-efficient and competitive economy, with the aim of being climate neutral by 2050. In 2024 we expect to see companies becoming more familiar with the requirements of the Directive and of the European Sustainability Reporting Standards, and the goals of both to combat ‘greenwashing’ and false, misleading or unsubstantiated claims.” While finance teams in larger organisations are assessing what new measures and information will be required, SMEs will also experience a ‘trickle-down’ effect from the CSRD. SMEs in the supply chains of in-scope entities can expect more queries from their in-scope partners. These may include questions about the SME’s environmental, social and governance (ESG) profile and plans. Speaking from the UK, Chartered Accountants and Director of Blue Crane Consulting, Rosie Dunscome says that 2024 will be a critical year for accountants to get their heads around in-coming corporate sustainability reporting regulation: “The UK government is set to make its endorsement decision on IFRS S1 and S2 by July 2024, and voluntary frameworks that look likely to shape future regulation were also launched in the latter part of 2023 in the form of the Taskforce for Nature-related Financial Disclosures recommendations and the Transition Plan Taskforce Disclosure Framework. These should all appear on an accountant’s radar in 2024.”   …and the CSDDD Provisional agreement has also been reached on the Corporate Sustainability Due Diligence Directive (CSDDD). This aims to foster sustainable and responsible corporate behaviour throughout global value chains. It applies to EU and non-EU companies with a turnover over €150 million and smaller companies in certain sectors. Outside the EU, other countries are implementing national legislation with similar aims, from New Zealand’s proposed modern slavery reporting legislation and Mexico’s new forced labour import prohibition. Greater scrutiny on sustainability claims Following initiatives to address greenwashing by, among others, IOSCO, the Financial Conduct Authority (FCA) and the EU in 2023, the US Securities and Exchange Commission is expected to announce its long-awaited proposed corporate disclosure rules for enhanced climate disclosures during the first half of 2024. Overall, companies can expect greater scrutiny on all sustainability-related information they produce. Carbon markets in the news One item expected to be in news this year is the voluntary carbon markets (VCMs). Talks at the global climate summit COP28 in Dubai in December failed to agree on new rules which would allow the launch of a centralised system, run by the UN, allowing for countries and companies to begin offsetting their carbon emissions and trading those offsets. It is expected that negotiations will continue through 2024 and at COP29 in Baku, Azerbaijan. Litigation              Climate and environmental issues are likely to come before the courts once again in 2024. In Ireland a new division of the High Court has been established that is dedicated to Planning and Environmental cases. Globally, there are reportedly more than 2,300 pending or decided climate cases. These range from small island states taking a case to the UN maritime court to seek protection for the world’s oceans against climate change, to young people taking 32 countries to court over climate inaction. A growing number of countries are considering introducing laws to make ecocide a crime: a new standalone crime of ecocide is being proposed in the Scottish parliament in a consultation which will run until February 9 202, and a test case of France’s new ecocide law is currently in the courts.  Jobs and skills The rise in reporting and disclosure requirements is likely to have an impact on finance professionals looking to upskill themselves and their staff, and/or to hire new team members. The lack of skills and education was a recurring theme in 2023, with the National Skills Bulletin 2023 reporting that the skills mix of Ireland’s workforce will need to evolve as industries in Ireland address issues such as sustainable sourcing, circular lifecycles, energy efficiency, and waste minimization. ‘Climate Action and Sustainable Development’ is one of the new subjects being considered as part of an open consultation on draft specifications for six Leaving Certificate Subjects to be introduced in schools in 2025. "With new sustainability regulations, as well as nature moving up the agenda for businesses and governments, accountants will need to learn the language of sustainability and how to apply this in their organisation’s context." says Sarah Reay, Climate Change Manager with ICAEW. "Capacity building across all organisation is likely to be a big focus in 2024". The International Federation of Accountants (IFAC) has also called on the accountancy profession to help build capacity and advance on education. Outside of accounting and finance, a growth in jobs in areas like renewable energy will require upskilling of workforces with 36.2 million people working in clean energy in 2023 (6 million more than 2019). Demand for more employees in this field is likely to rise, with global upskilling is required to meet it. Greater focus on assurance It is also possible that 2024 will see a growing demand for ‘real data’ like geospatial data and satellite imagery to prove companies are, e.g. sourcing cocoa from non-deforestation-prone regions. In Europe, with the introduction of the CSRD, there will be a mandatory requirement for the assurance of sustainability reporting.  “Initially there will be ‘limited assurance’ required, although ‘reasonable assurance’ is expected to be introduced at some stage in the future”, explains Dee Moran, Professional Accountancy Lead with Chartered Accountants Ireland. ‘In-scope companies will need to undertake an assessment of their readiness for assurance and have the appropriate processes and controls in place to ensure they are in a position to comply with the new regulatory obligations. We predict that this will be a  significant challenge for companies needing to comply in 2024 as they carry out these assessments, so companies should begin this sooner rather than later to ensure they are compliant.” More renewable energy 2024 is set to be a critical year in renewable energy in Ireland. Calls on the Government to remove bottlenecks and push through projects have been made to ensure the scale-up of offshore wind, which is needed for Ireland to achieve its climate goals. Marie Joyce, Chief Operations Officer & Chief Financial Officer of NTR plc thinks that 2024 will bring an ever-increasing focus and understanding of the benefits of clean energy (wind, solar, battery storage) for us all:  “The benefits of clean power are significant, not just in reducing national CO2 emissions, but also in reducing air pollution. These assets also present a great opportunity to deliver a positive impact on Nature.” One of those benefits is cost. The costs of global renewable power generation continued to decrease through 2022, despite rising materials and equipment costs. According to the International Renewable Energy Agency (IRENA), in 2022 solar PV cost 29 percent less than the cheapest fossil fuel-fired solution. Nature, biodiversity and business According to the World Resource Institute over half of global GDP – $44 trillion – relies on nature, but only 17 percent of total investment in nature comes from the private sector. We can expect to hear more from World Resources Institute (WRI) in 2024, as it researches how business can finance investment in Nature-based Solutions (NBS). Beginning in 2024, the Taskforce on Nature-related Financial Disclosures (TNFD) will track voluntary market adoption of its recommendations through an annual status update report. Adapting to record-breaking climate events All indicators point to the relentless rise in global temperatures to continue in 2024 with experts forecasting “Every year for the rest of your life will end up being one of the hottest in the record.” The changing climate will also continue to bring record-breaking droughts, wildfires, floods and heavy rain. In addition to the human cost of these events, the European Environmental Agency (EEA) predicts that weather- and climate-related extremes will see economic losses of assets increase as severe weather- and climate-related extreme events intensify further. (These events caused €52.3 billion of economic losses of assets in 2022.) Historically low levels of water in the Panama Canal, the Mississippi and the Rhine had ramifications for the movement of goods in 2023, and similar impacts are expected in 2024. At the other extreme, flooding in Ireland caused enough damage for the Government to introduce an Emergency Business Flooding Schemes for small businesses. It is likely that insurance prices in Europe will also rise, according to the chief executive of Lloyd’s of London, as extreme weather changes the way insurers thought about climate risks. The need for more resilience in supply chains is coming to the fore as companies grapple with understanding how different scenarios will affect their business. Overall, a busy year ahead.   Keep up to date with on sustainability with information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre at Chartered Accountants Ireland

    In this week’s Sustainability/ESG bulletin, read about Chartered Accountants Ireland’s round-up of COP28. Also covered is the Irish Fiscal Advisory Council’s view on how climate change costs can be managed, how 'Climate Action and Sustainable Development' may be included in proposals to redevelop Leaving Certificate subjects, a report on nature-related risks and opportunities for Ireland’s financial sector, UK green hydrogen projects, more time granted to Northern Ireland businesses to consider implications of EU Battery Regulation, as well as European developments, a new publication by IFAC, and technical roundups, newsletters, articles, podcasts and upcoming events. COP28 - the global climate summit The United Nations’ annual climate summit – COP28 – concluded in the early hours of 13 December in Dubai. Chartered Accountants Ireland has compiled useful resources about the summit on our COP28 page, including our daily updates and weekly round-ups. Climate change costs ‘can be managed’ says Irish Fiscal Advisory Council Climate change will have large impacts on public finances, but these costs can be managed, according to the most recent report by Ireland's budgetary watchdog, the Irish Fiscal Advisory Council. In the section ‘Ireland’s green transition can be managed’, the report states that while the costs of the green transition appear high, taxes could be replaced, spending may be manageable and climate-related spending supports could be managed. However, it concedes that how exactly this will be managed needs to be thought through carefully, and that big decisions are needed on Ireland’s climate transition. Sustainability included in proposals to redevelop Leaving Certificate subjects ‘Climate Action and Sustainable Development’ is one of the new subjects being considered as part of an open consultation launched this week on draft specifications for six Leaving Certificate Subjects. Part of the Senior Cycle Redevelopment, the first tranche of new and revised Leaving Certificate subjects will be introduced in schools in 2025. The consultation will run until Friday 23 February 2024 and be accessed via the NCCA’s website. New division of the High Court dedicated to Planning and Environmental cases A new division of the High Court dedicated to Planning and Environmental cases has been established in Ireland, it was announced this week. The new Division will replace and expand the scope of the Commercial, Planning and Environmental List of the High Court. Its scope encompasses proceedings related to planning, transport, water, climate, natural heritage, built heritage, waste, mineral exploration, the marine, agriculture and pollution. Speaking about the announcement, Minister for Justice Helen McEntee, TD  said “Dealing with such cases in an effective and efficient manner is key to enabling the State’s delivery of housing and infrastructure, while also protecting the environment.” Environmental Indicators Ireland 2023 A report published by the Central Statistics Office (CSO) this week shows that Ireland’s emissions of greenhouse gases with global warming potential were higher in 2021 than the European average (12.3 tonnes in Ireland versus 7.8 tonnes in the EU27). The report – Environmental indicators Ireland 2023 – covered 70 indicators across 10 themes, including environmental economy, air, greenhouse gases and climate change, water, land use, energy, transport, waste and biodiversity. It shows that while 39 percent of electricity generation in 2022 was from renewable sources, fossil fuels received subsidies of €2.9 billion in 2021. The highest average annual temperature in Ireland over the 1961-2022 period occurred in 2022. The Nature of Finance – new report launches A new report was launched this week to raise awareness of how the financial sector both impacts on – and depends on – nature.  The Nature of Finance, the first independent assessment of nature-related risks and opportunities for Ireland’s financial sector, hopes to spur further detailed research and proposes a Nature Finance Roadmap for Ireland. Written by KPMG Sustainable Futures and commissioned by the International Sustainable Finance Centre of Excellence (ISFCOE) with support from Skillnet Ireland, the report quotes comments from the European Central Bank on how nature “[is] existential for the economy and the financial system, as our economy cannot survive without nature.” Northern Ireland businesses given more time to consider implications of EU Battery Regulation The EU Batteries Regulation will apply in Northern Ireland from 18 February 2024 and will gradually introduce new rules to strengthen sustainability of batteries and waste batteries, protect the environment and human health and increase recycling. The deadline for completing a survey on how the new EU Batteries Regulations will impact on Northern Ireland traders has been extended by DAERA until Friday 19 January 2024. Businesses manufacturing, importing or selling batteries, either on their own, or incorporated in products, are encouraged to give their feedback as well as register for an information session on the issue. DAERA will report the findings back to UK Government so that it is fully aware of potential implications for Northern Ireland businesses, and consider the next steps. 11 green hydrogen projects announced for UK UK’s Department for Energy Security and Net Zero has announced backing for 11 major projects to produce green hydrogen. Unlike blue hydrogen, which is formed using fossil fuels and capturing the carbon emissions, green hydrogen is made by using renewable energy to split water – helping provide cleaner fuel for energy intensive industries and transport. Confirmed suppliers will receive a guaranteed price from the government for the clean energy they supply. In return for this government support, the successful projects will invest over £400 million in the next three years, generating jobs in local communities across the UK and delivering 125MW of new hydrogen for businesses. Provisional agreement on reform of the EU’s electricity market design Provisional agreement has been reached by the European Parliament and Council on the reform of the EU's electricity market design, revising several pieces of EU legislation. The announcement comes a week after provisional agreement was reached by the European Parliament and Council on updated EU rules to decarbonise the gas market and create a hydrogen market. Under the agreement, consumers will get a wider choice of contracts, clearer information before signing contracts, and thereby the option to lock in secure, long-term prices to avoid excessive risks and volatility. They will also be able to play active role in the energy system, as ‘prosumers’ participating in energy sharing and able to invest in wind or solar parks and sell excess rooftop solar electricity to neighbours (not just to their supplier). Following formal adoption of the agreement by both the European Parliament and the Council, the new legislation will be published in the Official Journal of the Union and enter into force. Corporate due diligence rules agreed to safeguard human rights and environment Provisional agreement has been reached on the Corporate Sustainability Due Diligence Directive (CSDDD).  The proposal aims to foster sustainable and responsible corporate behaviour throughout global value chains. The Directive applies to EU and non-EU companies with a turnover over €150 million and smaller companies in certain sectors. Penalties include naming and shaming and fines of up to no less than 5 percent of net worldwide turnover. Following formal approval by the co-legislators, the Directive will enter into force 20 days after publication in the Official Journal, with Member States having two years to transpose the provisions of the Directive into national law. Integrated Internal Control Needed to Build Trust in Sustainability Reporting, says IFAC The International Federation of Accountants (IFAC) has published a report on how organizations can combine sustainability reporting with their existing internal control and governance frameworks. “The professional accountant’s skillset is instrumental in bringing about a step change in the quality of sustainability reporting through applying new reporting standards and integrated internal controls,” said Kevin Dancey, IFAC CEO. “Integrated internal control can put sustainability information on par with financial information, enhance its assurance readiness, and set the foundation for transitioning to a more sustainable business model.” Technical Round-Up (From our colleagues in Professional Accounting) The International Sustainability Standards Board (ISSB) have been providing updates on their activities at COP28. These include planned future cooperation with the International Organization for Standardisation towards effective communication about sustainability-related risks and opportunities; details of the growing number of organisations and jurisdictions who have committed to advancing the adoption or use of the ISSB’s climate-related reporting at a global level; an announcement that Emmanuel Faber will continue as ISSB chair until the end of 2027; and details of the progress made in advancing global sustainability disclosures since the ISSB was announced at COP26. The Board has also provided details of some new and updated resources coming into effect on 1 January 2024. These are intended to help companies apply the ISSB Standards IFRS S1 and IFRS S2. The IFRS Foundation has launched the IFRS Sustainability Knowledge Hub which seeks to support users of the ISSB standards. This is intended to help auditors, investors, regulators and stakeholders as they begin their reporting journey under the ISSB standards. IFAC has announced plans to revise the International Education Standards to bring greater focus to sustainability reporting and assurance, given the evolving role of accountants in the area of sustainability.   Newsletters (From our friends in Accountancy Europe) Includes: MEPs’ vote on draft report on ESG ratings proposal The delay to EFRAG’s work ISSB’s announcements at COP28 IOSCO’s overview of initiatives to address greenwashing IFAC’s sustainability checklist for small businesses From Accountancy Ireland (December 2023) “We need the tools to solve climate change and we need them quickly” - Mike Hanrahan, FCA and Chair of Sustain.Life (Accountancy Ireland) The CSRD: a new frontier in corporate reporting - Daniel O’Donovan, partner, KPMG - (Accountancy Ireland) Articles How accountants can guide SMEs towards sustainable funding (Accountancy Age) PwC UK imposes restrictions on business-class travel (Financial Times) COP28: learning a new language for business (ICAEW) Ireland has the resources and policy to set a shining example to others of national climate action (The Irish Times) Gender pay gap at the Central Bank falls to 3.9%, report shows (The Irish Times) Gender pay gaps have widened this year at nearly half of firms, tally of early annual returns shows The Irish Independent Resources The global SME Climate Hub has free resources for climate action to support SMEs' journey towards a net zero future. In recent weeks, the SME Climate Hub has expanded its tools to facilitate small business climate action. It has launched Action Guides to provide businesses with simple steps for building a climate action plan, and leaned into sector-specific guidance with its first set of Action Courses, which offer video guidance for emissions reductions. Additional industry-tailored resources are to launch next year. Podcast Marie Donnelly, Chair of the Climate Advisory Council, reacts to the latest developments at COP28 where a deal has been reached. (RTÉ Clip • 10 mins) Upcoming Events   UN Global Compact Network UK Collecting Scope 3 Data Webinar Series 2024 The UN Global Compact Network UK are hosting an interactive four-part webinar series in 2024 to support businesses to efficiently collect Scope 3 emissions data from across their value chain. This series will explore how companies can collect Scope 3 data using a variety of tools, surveys, and software and will feature case studies and insight from businesses on good practice in this area. Collecting Scope 3 Data: Supplier Engagement: 1 February, 10:00-11:30 GMT Collecting Scope 3 Data: Upstream Emissions, 8 February, 10:00-11:30 GMT Collecting Scope 3 Data: Downstream Emissions, 15 February, 10:00-11:30 GMT Collecting Scope 3 Data: Employee Engagement, 22 February, 10:00-11:30 GMT 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: Thursday, 25th January 2024  In person: Time and location tbc (but will be on Pearse Street, Dublin 2) 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. 

Introduction The agri-food industry operates in a rapidly changing and dynamic business environment, where farmers and food producers, from multinational to artisan, are continually required to innovate and adapt. Events such as the COVID-19 pandemic and the war in Ukraine have increased complexity, disrupting food-supply chains and threatening food security. These circumstances have an impact on food production processes and consequently require a focus on sustainability. Sustainability is a key challenge facing all business sectors, not least the agriculture and food production industries. At a national and international level there is a huge focus on developing a sustainable food supply for a growing worldwide population. The United Nations (UN) forecasts a 34% increase in world population by 2050 and that an increase of 70% in food production will be required. Despite this, the UN reports that 30% of all food produced globally is lost or wasted. Greenhouse gases (GHG) emissions globally have increased by more than 60% between 1990 and 2022. The impact on climate change has been well documented, including increases in the frequency of flooding, droughts and wildfires. Such climate-change effects have serious consequences on food production and necessitate collaboration between all sectors of society to address the challenges presented. In Ireland, the economic importance of agriculture is clear. According to the Department of Agriculture, Food and the Marine, the agri-food sector accounted for 9% (€18.78 billion) of total exports in 2022 and 6.5% of total employment or 164,900 jobs, mostly in rural areas. Farms and farmers also provide valuable sources of environmental assets (e.g. hedgerows, wetlands and woodlands) and contribute to preserving natural habitats and biodiversity. However, from an environmental sustainability perspective there is much debate about the high level of GHG emissions generated by the Irish agricultural industry and how this issue needs to be addressed. In this article, I do not debate the extent to which the agricultural industry contributes to Ireland’s GHG emissions problem, but rather focus on acknowledging that farmers and food producers need to be included in determining a solution.  I also believe that the accounting profession has a key role to play in assisting farm enterprises, and small and micro agri-food businesses, to create more sustainable enterprises and to contribute to a sustainable food supply.  Environmental sustainability in agriculture Environmental sustainability is at the forefront of national and international policy development in agriculture and food production. This is primarily driven by the UN Sustainable Development Goals, as several of them relate to agriculture and food production.  At EU level, the European Green Deal, through its “Farm to Fork Strategy”, has set out plans on how to improve sustainability and the environmental impact of the agri-food industry. These are being incorporated into reform of the common agricultural (CAP).  At a national level, the Climate Action and Low Carbon Development (Amendment) Act 2021 introduced a framework of sectoral GHG emissions (‘carbon’) budgets, to be subsequently developed and proposed by the Climate Change Advisory Council (CCAC). In July 2022 (after much debate) the sectoral emissions ceiling for agriculture was set at a level requiring an ambitious 25% reduction by 2030. Stakeholders acknowledge the fundamental challenge that environmental sustainability presents for the industry. They also acknowledge the key role that the industry must play in addressing the national environmental sustainability challenge. A financial perspective on sustainability in agriculture Sustainability in agriculture is multidimensional and is broadly comprised of three main pillars:  environmental sustainability,  social sustainability, and economic sustainability. Environmental sustainability refers to how agriculture and food production processes impact our environment, and is the most widely discussed pillar of sustainability, the contribution of the industry to GHG emissions attracting significant debate.  Social sustainability in agriculture relates to farming communities, and the many challenges they face, and how the industry’s sustainability affects wider society.  Economic sustainability is generally viewed as economic viability, i.e. whether a farming system can survive financially in the long term in a changing economic context. It is perhaps to the economic sustainability of agriculture that the role and contribution of accountants is most relevant.  The National Farm Survey (NFS) is conducted annually by Teagasc, the Agriculture and Food Development Authority. Highlighting the economic vulnerability of many farm enterprises in Ireland, the 2022 report classes 43% of Irish farms as economically ‘viable’, 32% as ‘sustainable’, and 25% as ‘vulnerable’. At the root of this economic vulnerability is rising inflation and increases in the cost of farm inputs (e.g. fuel, fertiliser and feed), reducing the profit margins of food producers.  The challenge for farm and food production enterprises is to balance economic with environmental and social sustainability. A phrase used in the industry is “it’s hard to be green when in the red”. The NFS statistics reveal a situation of economic vulnerability for many farm enterprises. Therefore, financial viability may understandably be their top priority, with environmental and social sustainability of secondary importance.  However, despite the uncertainty of economic conditions in the short term, the long-term focus on environmentally sustainable food production and its positive social impact should not be forgotten. When a holistic perspective is brought to the concept of sustainability, we realise that the pillars of economic, environmental and social sustainability are intertwined and cannot be simply viewed in isolation.  While there are many scientific solutions (e.g. soil and grassland management, fertiliser use, changes to feed additives, alternative energy sources, shorter animal-to-slaughter periods, etc.) proposed to farmers on how to reduce GHG emissions, there appears to be little known about, or consideration of, the financial impact of such changes to farm practices.  The onus of identifying the changes required to farm practices to reduce GHG emissions on farms is placed on individual farmers, and farm advisory services are available to assist in this regard. However, many of the scientific solutions to reduce on-farm emissions require investment and involve a cost to farmers when making the transition. There appears to be little focus from the advisory services on assisting farmers to assess the economic cost or benefit for them when implementing such changes to farm practices.  Though many farmers want to adapt their work practices to contribute to a reduction in GHG emissions, many experience a knowledge gap regarding the financial impact on their livelihoods. This is an area where improvement in advisory services is required. Bringing a focused financial perspective to sustainability, accountants can contribute to bridging this knowledge gap. I contend that the accounting profession must collaborate with stakeholders in the agriculture industry and lead the way in helping to create sustainable farm and food production enterprises.  A financial management perspective acknowledges that economic sustainability cannot be sacrificed, and is crucial for the survival of farming and food production. Rather, work practices need to change to meet the ‘triple-bottom-line’ agenda of economic, environmental, social sustainability. Farmers and food producers need to be supported and advised to achieve this more complex and yet balanced objective. The role of the accountancy profession It is paramount that farmers and food producers are educated about what sustainability means and the financial implications for their business. Accountants are one of the primary sources of trusted advice for small business owners, including farmers. Therefore, the accounting profession has the potential, and an existing platform, to lead on how farmers and food producers can improve their sustainability, in the broadest sense.  Accountants are unique in having a wide range of knowledge about sustainable work practices from dealing with a varied client base across multiple industries. They can share this with farmers and small agri-business owners.  Accountants could assist farmers and food producers by: identifying the business opportunities for farmers presented by the sustainability transition; conducting cost–benefit analyses of implementing environmental sustainability initiatives (e.g. alternative energy sources); calculating the payback or return on investments that reduce the GHG emissions of enterprises;  helping business owners to avail of financial supports available to meet the cost of sustainability initiatives; advising farmers on how to develop sustainable work practices in a cost-efficient manner; sharing knowledge gained from SMEs and larger companies (e.g. on how to conduct sustainability audits).  Resources are available to support accountants to work with clients in this regard. For example, Chartered Accountants Ireland provide online resources in its Sustainability Centre, where free-to-access publications such as Sustainability for Small Businesses – A Guide provide practical insights. Conclusion There are many ways the accountancy profession can contribute to assisting farmers and food producers meet sustainability targets. These insights are not only important for food and agricultural businesses but are equally relevant and transferrable to how the accounting profession could rise to the challenge of assisting businesses in other sectors of the economy meet the increasing demand to strive for improved sustainability.  Dr Michael Hayden, FCA, is an Assistant Professor of Accounting at Maynooth University  

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.

The FRC Lab has published a report entitled "Net zero disclosures". This report, which highlights examples of current practice, discusses some of the key considerations for investors who use net zero disclosures and the elements of net zero disclosures that investors want to understand. The report builds on three key elements of net zero disclosures (commitments, impacts and performance) and discusses areas of consideration and challenge within these topics. The report provides some useful guidance for preparers seeking to navigate the difficult area of reporting on their greenhouse gas emission reduction commitments.

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.