Sustainability/ESG bulletin from Chartered Accountants Ireland, 6 December, 2024

Ireland news

Institute responds to IASB exposure draft on climate-related risks in the financial statements"

Chartered Accountants Ireland’s Professional Accounting Team has issued its response to the International Accounting Standards Board’s (IASB) Exposure Draft “Climate-related risks and Other Uncertainties in the Financial Statements”. The Exposure Draft, which proposes eight examples illustrating how entities may apply the requirements in IFRS Accounting Standards to report the effects of climate-related and other uncertainties in its financial statements, was issued by the IASB in July 2024.

COP29 – the Baku Finance Goal

Chartered Accountants Ireland covered the global climate summit ‘COP29’, which concluded in the early hours of Sunday morning, 24 November in Baku, Azerbaijan. The gavel descended on the fourth longest COP on record agreement on ‘The Baku Finance Goal’, a new finance target for tackling climate change. Read our COP29 coverage.   

Socially Responsible Public Procurement

The Department of Rural and Community Development has published research identifying future trends of social enterprise development, inclusive and ethical supply chains, and an overall shift towards socially-conscious business models. The publication, Buy social' and Socially Responsible Public Procurement Research Paper, benchmarked 10 countries across the UK, Europe and North America and delved into the concept of ‘Socially Responsible Public Procurement’ (SRPP), which aims to achieve positive social outcomes in public procurement contracts.

Decarbonisation of Commercial Buildings Roadmap - update

The Climate Action and Energy Policy Unit of the Department of Enterprise, Trade and Employment has published an update on its work on decarbonising the commercial built environment. In a presentation to the Retail Forum Green Transition Working Group, the Unit provided a status update to the Decarbonisation of Commercial Buildings Roadmap, which is in final draft form and awaiting sign off by the incoming Government, after which it be published.

New Climate Action Roadmap published by DHLGH

The Department of Housing, Local Government and Heritage has published a Climate Action Roadmap detailing how it aims to meet its 2030 carbon and energy efficiency targets and implement the requirements of the Climate Action Mandate 2024. Corporate and Business Support, and the Local Government Audit Service are among the 10 divisions through which the Department will carry out its work to meet the requirements of the mandate. 

Government response to flooding for businesses

The Minister for Enterprise, Trade and Employment, Peter Burke, T.D., has confirmed that his department will seek government approval to reopen the Emergency Humanitarian Flooding Scheme. The scheme has previously been opened to provide support for businesses who had been unable to secure flood insurance and were impacted by flood water as a result of severe weather events.

All-Ireland Climate Action Pilot Programme for SMEs launched

Business in the Community Ireland (BITCI) has launched its insights report on an All Ireland Climate Action Pilot Programme for Small and Medium sized Enterprises (SMEs). BICTI developed the pilot programme in response to a strategic review of SMEs in Ireland in late 2023 to explore how BITCI could support the decarbonisation transition of SMEs. The research shows how SMEs are already being impacted by climate change, that engaging suppliers meaningfully is crucial in successfully decarbonising supply chains, and that expanding national engagement and exploring international collaborations will also be key in developing future programmes.

Northern Ireland/UK news

• The consultation on a  draft environmental principles policy statement (EPPS), issued by the Department of Agriculture, Environment and Rural Affairs (DAERA), is closing shortly on Monday, 9 December. The statement sets out how five internationally recognised environmental principles should be interpreted and proportionately applied to policy making. When fully in force, all Northern Ireland government departments and United Kingdom government ministers making policy for NI will have a statutory duty to have due regard to the statement. The consultation close on Monday, 9 December.  
• The UK Environment Agency has launched a consultation on the updated charges proposed for United Kingdom Emissions Trading Scheme (UK ETS) customers, as well as customers of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), and charges for the UK’s Kyoto Protocol national registry (the national registry). The consultation also sets out charge proposals for areas of UK ETS expansion. The consultation will close on Friday 24 January 2025, and further details can be found on the Environment Agency website. 
• The Offshore Wind Growth Partnership (OWGP) is supporting businesses looking to enter or grow within the offshore wind supply chain through the Wind Expert Support Toolkit (WEST). Applications will close at 5pm on Friday 24 January 2025 and details of the WEST programme and how to apply are here.

Europe news

The European Commission has reportedly announced plans to streamline overlapping sustainability regulations into a single, cohesive framework, or ‘omnibus regulation’. The aim is to reduce the regulatory burden on companies while maintaining the EU’s leadership in sustainability. Certain sustainability legislation, including the Corporate Sustainability Reporting Directive, the EU taxonomy and the Corporate Sustainability Due Diligence Directive may be amended into a single omnibus regulation. The EU executive is still to make a final decision on the issue.

World News

• The World Benchmarking Alliance has published a briefing titled How to ensure inclusive and impactful CSDDD implementation, with recommendations for governments, civil society and businesses on how to “engage constructively” with CSDDD implementation. Recommendation for business include preparing proactively for compliance and engaging transparently with government and stakeholders; recommendations for investors include integrating CSDDD compliance into investment criteria and stewardship and demanding transparent reporting from investee companies. 

• The fifth and ostensibly final round of talks on securing a legally binding and universal plastic treaty failed to deliver consensus this week Busan, South Korea. Commenting at the outset for the talks, Intergovernmental Negotiating Committee chair Luis Vayas Valdivieso, said: “Without significant intervention, the amount of plastic entering the environment annually by 2040 is expected to nearly double compared to 2022.”The OECD calculates that the introduction of strict policies targeting the full plastics lifecycle would result in a global GDP contraction of 0.5 per cent in 2040 but that the costs of inaction are likely to be far higher 

• A report into impact investing has found that impact funds tend to be less exposed to market risk than traditional venture capital and private equity funds. The report, The Risk and Return of Impact Investing Funds, published by Journal of Financial Economics, reportedly used a data set of 94 private markets impact funds covering cash flows from 1999 to 2021 to address a lack of publicly available impact fund cash flow data. 

• Spain’s government has reportedly approved a new “paid climate leave” entitlement of up to four days to allow workers take time off if unable to travel to their place of work in the event of official warnings of extreme weather conditions. The measure was agreed a month after floods in Valencia — estimated to cost the country 0.2 per cent of GDP this quarter — killed more than 200 people.  

• A report on the economic cost of extreme weather commissioned by the International Chamber of Commerce has found that climate-related extreme weather events have cost the global economy more than $2 trillion over the past decade. A 2023 report by S&P Global, Quantifying the financial costs of climate change physical risks for companies, had previously shown that the financial impacts of climate change on major companies nearly doubled from the 2050s to the 2090s, and that by the 2050s, the costs of the physical hazards of climate change could equal an average of 3.3% (up to 28%) a year of the value of major companies’ real assets. Commenting on the 2024 reporting findings, ICC secretary-general John Denton described ‘a real and tangible cost to delaying the action needed to stem climate change’ and that ‘from a business perspective, the urgency of coordinated and collective action to accelerate emissions reductions and build resilience to changing weather patterns cannot be overstated’.

Technical update

Our Professional Accounting team have a published their Technical Roundup, with updates on the EU Taxonomy,  KPMG’s Survey of Sustainability Reporting, a recent EFRAG webinar on ESRS for Non-EU Groups, updates from IFRS and ISSB and a link to the Accountancy Europe November 2024 Sustainability Update.

Did you know?

Entries are now open for the Business & Finance ESG Awards which celebrating businesses and individuals actively striving to address and progress ESG issues in their organisation.

Articles

• Businesses need to improve reporting sustainability matters, ACCA says (AccountancyToday)
• Strengthening ESG strategies ahead of 2025 reporting deadlines (Accountancy Ireland – Briefly)

Upcoming Events

MEANZ Business Webinar: Net Zero and Decarbonising your business Mid and East Antrim Borough Council is inviting businesses to the latest webinar in the MEANZ Business Net Zero Insights Series. You will hear about what Net Zero 'MEANZ' for businesses and get practical tips from expert speakers on how you can decarbonise to reduce overheads, save costs and get competitive advantage. Speakers at the event will be James Dunlop, Senior Manager, Carbon Trust, and Mark McEvoy, Sales Director, Camden Group. Virtual, Thursday 5 December, 11.00 – 12.00         

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