Seanad debates

Wednesday, 24 November 2021

Companies (Emission Reporting) Bill 2021: Second Stage

 

10:30 am

Photo of Garret AhearnGarret Ahearn (Fine Gael)

I thank the Minister of State for being present for this debate. I acknowledge the work done by Senators Ruane and Higgins on the Bill and the Minister of State's constructive engagement on it, which Senator Higgins acknowledged. Like Senator Murphy, I agree with the Government's proposal of a 12-month timed amendment. It would give us an opportunity to discuss this more.

I think a great many of us agree with the spirit of the Bill of driving the reduction in the level of greenhouse gas emissions by companies and public bodies. A series of targeted measures is in place to achieve this objective, largely EU-driven, such as the emissions trading scheme, the energy efficiency directive and the sustainable finance agenda that includes a proposal for a corporate sustainability reporting directive, which is currently being negotiated. Given the scale of the climate challenge, the interconnectedness of economies and the global nature of enterprise, it makes sense to work with the EU on this rather than going on our own.

It is welcome that action in each of these policy areas is ongoing. The 12-month timed amendment will allow for progress at EU level on the corporate sustainability reporting directive in particular. That will achieve the goals of this Bill on an EU-wide basis rather than just in Ireland. Irish enterprises will be required to implement a detailed agenda of transition and change to ensure our sectors are climate-resilient and can remain competitive in a decarbonising world. The new climate action Bill includes an acceleration of measures to achieve the level of decarbonisation now required in the industry sector. The target is for a reduction of 7.9 million tonnes of CO2 equivalent in 2018 to about 5 million tonnes in 2030. Under the Government's Climate Action Plan 2021, an increase in energy efficiency in Irish enterprises of 50% by 2030 will be sought. That is an increase on the previous action plan target, which was 33%. Irish enterprises will be required to implement a detailed agenda of transition and change to ensure they are climate-resilient and can remain competitive in a decarbonising world, including improving the energy efficiency of processes, buildings and transport. The enterprise sector is responsible for 13.3% of Ireland's total greenhouse gas, GHG, emissions, 68% of which are accounted for by large energy-using companies operating in the EU emissions trading scheme.

In April 2021, the European Commission published a proposal for a new corporate sustainability reporting directive to revise substantially the existing non-financial reporting rules. It is currently being negotiated at Council working party level. The main elements of the proposal relate to environmental and social matters, as in the existing directive, with the addition of governance. The proposal aims to extend the scope to large companies, that is, those with at least 250 employees and all companies listed on the regulated markets. It requires the audit of reported information and introduces more detailed reporting requirements and a requirement to report according to mandatory EU sustainability reporting standards. It also requires companies to digitally tag the reported information so that it is machine-readable and feeds into the European single access unit envisaged in the capital markets Union action plan. It is expected that the new obligations will be phased in in order that companies will publish their first reports according to the mandatory standards in 2024. That will cover the financial year 2023. That will coincide with the proposed introduction of the requirements in the Bill.

As legislators, we need to map out a clear and constant path in order that Irish enterprises can make the right decisions on investment for the future. Proceeding with national legislation ahead of EU developments at this time would be very costly and confusing.

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