Dáil debates
Tuesday, 3 December 2019
Ceisteanna (Atógáil) - Questions (Resumed) - Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Climate Change Policy
5:45 pm
Eamon Ryan (Dublin Bay South, Green Party)
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43. To ask the Minister for Jobs, Enterprise and Innovation if her Department has had engagement with the task force on climate-related financial disclosures; and if she is considering promoting new auditing structures for businesses with regard to carbon emissions. [50376/19]
Eamon Ryan (Dublin Bay South, Green Party)
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The task force on climate-related financial disclosure is one of the key initiatives to try to steer the enterprise sector towards supporting climate action. It was founded in 2015 and the first status report was released in 2017, with a further update this year. It is critical for Irish business to be at the head of this and leading rather than following, which is what is currently happening. I am keen to hear the view of the Minister and Department on this initiative, what they are doing to promote such disclosures and what we can do to try to make this happen in Ireland.
Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I thank the Deputy for raising this issue. While I am aware of the work of the task force on climate-related financial disclosures, TFCD, set up on the recommendation of the Financial Stability Board of the G20, I have not had any direct engagement with this group. My understanding is that the group has developed voluntary climate-related financial disclosures, recommended to complement the financial reporting and auditing process of large publicly-listed companies. They are to provide useful climate-related information to lenders, insurers and investors and so the Deputy may wish to look for further information from the Department of Finance or the Central Bank in that regard.
In 2017, I signed regulations transposing into Irish law directive 2014/95/EU on disclosure of non-financial and diversity information by certain large undertakings and groups. The directive, referred to as the non-financial reporting directive, amended the EU accounting directive and placed new requirements for large companies or groups with more than 500 employees, including banks, insurance companies and large listed companies, to report annually on their policies in regard to environmental matters, social and employee matters, respect for human rights and bribery and corruption. These new rules took effect in Ireland for financial years starting on or after 1 August 2017.
I am aware that the EU Commission has further advised that the TFCD recommendations, while voluntary, are widely recognised as authoritative guidance on the reporting of financially material climate-related information and the Commission has encouraged financial regulators to implement them. It has provided guidance to companies on climate-related reporting that is consistent with the non-financial reporting directive and the recommendations of the TFCD. These are to assist companies in regard to their disclosures, including guidelines on climate related disclosures, in order that they can provide relevant, useful and concise reports. I understand that the Commission may consider a review of the directive with a view to addressing issues such as the availability and comparability of the non-financial information being disclosed.
Eamon Ryan (Dublin Bay South, Green Party)
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It appears that Ireland is not connected to this at all. As far as I can see, only two companies are involved in any way in this process, AIB and the Euronext Dublin Stock Exchange. What are some of the large publicly quoted companies in this country? They all have significant climate risks. They include Glanbia, the Kerry Group, CRH and Ryanair, and have exposure because they are in high emissions businesses. It is in their interests to be up first, if they are not to face into a world where they will have difficulties in terms of their ability to raise finance, attract customers and avoid some of the costs that come with non-compliance with proper reporting. We should be ahead of the game rather than waiting for the Commission to make this sort of reporting mandatory.
I am not sure exactly what the Department can do in that regard. To be honest, I would be nervous about trying to involve the Department of Finance because I am looking at this from an enterprise strategy rather than a financial regulatory strategy point of view. It is important that Irish businesses wake up and realise that carrying an Origin Green band with no real disclosure on what they are actually doing from the field to a customer's fork and plate is no longer credible. The Kerry Group can sell a lot of baby powder, but if it is not disclosing where it is coming from and how it is working it is exposed as a company, just as are all large Irish companies. I encourage the Minister, on an enterprise strategy basis, to get active about this.
Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The enterprise sector has been tasked with reducing greenhouse gas emissions by 10% to 15% by 2030.
The climate action plan identified that the largest reductions in greenhouse gas emissions can be realised in the cement and food and beverage industries. An uptake of 80% in the cement industry in using alternative fuels, such as waste, combined with an 80% uptake in a switch from oil to biomass and electricity in the food industry by 2030, would adequately reduce greenhouse gas emissions to meet the industry target of a reduction of 10% to 15%. Enterprise will also contribute to the ambitious targets for buildings, that is a reduction of 20% to 25% by 2030, as well as a reduction in transport emissions of some 45% to 50% by 2030. That will be done via actions such as improving building energy performance and the replacement, over time, of commercial fleets with electric vehicles.
We are working closely with Enterprise Ireland and it is putting greater emphasis on environmental aid to help businesses to reduce their carbon footprint. Where we are providing finance and support to businesses, through Enterprise Ireland, we can ensure that those companies are making an improvement in their carbon footprint, such as via the use of combined heat and power equipment. It is good for businesses to improve and reduce their energy costs and to explore more initiatives to enable them be more environmentally-friendly. That makes sense.
5:55 pm
Eamon Ryan (Dublin Bay South, Green Party)
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That is important for enterprise and also for the finance community. If we look down the road just a little, AIB has stated that it is going green. Its neighbour, Barclays Bank, was cited recently by Mr. Bill McKibben, a famous climate campaigner, as one of the top ten worst banks and financial institutions for lending to the fossil fuel sector. That sector will increasingly be at risk as those assets risk becoming stranded assets. It was also interesting recently that a survey showed Dublin at the bottom of the table in the context of the green Irish Financial Services Centre, IFSC, and being ahead of the curve in low-carbon financing and lending. That survey found London and Amsterdam as the European bourses seeking to promote this idea the most.
The advantage of initiating the TFCD is that it would bring other expertise or pressure to bear on the funds, treasury management and derivatives sector of the financial services and lending industry in Ireland to ensure that they report their financial and risk exposure if they are still lending and-or trading in high-carbon assets. The IFSC is important to Dublin. Some 30,000 people work there and it needs to be at the top of the league in the context of agenda rather than playing catch-up or being Paddy last which I fear is the case now.
Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The enterprise agencies are focused on the transition to a green economy. Future Jobs Ireland is one of the ways we can help businesses transition to a low-carbon economy. If we examine some of the supports that enterprise agencies are rolling out, whether it is IDA Ireland or Enterprise Ireland, we can see programmes and initiatives such as lean-green, which encourages businesses to implement lean business principles, paired with good environmental management practices. There is also Enterprise Ireland's GreenPlus scheme , as well as the GreenStart programme targeted at SMEs to aid them with regulatory compliance. There are opportunities in the low-carbon environment for companies to find work and there are some fantastic indigenous companies exploring many energy-saving mechanisms. There is much investment in that research through the disruptive technologies innovation fund and many projects we have supported include climate energy and sustainability aspects.
Ireland, however, has many small enterprises. I do not want to put further burdens on those companies. Instead, I want to reduce it and particularly in the area of administration. We can encourage and support such enterprises to transition to the low-carbon economy because it is most certainly in their interests to make that change and we will get good results by working with them.