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Grainne Mooney

May 27, 2024
4

Gender Pay Gap Reporting – 5 Helpful Tips

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What is the Gender Pay Gap?

The Gender Pay Gap is a measure of the difference in hourly remuneration of men and women across a workforce. In Ireland the Gender Pay Gap Information Act was introduced in 2021 requiring organisations with 250 employees or more to report their Gender Pay Gap in 2022.

It is important to note that the Gender Pay Gap is not a measure of discrimination or absence of equal pay for work of equal value. Equal pay for “like work” is a requirement under Irish law, whereas the Gender Pay Gap is a measure of gender representation across an organisation.

The most common driver behind the Gender Pay Gap is that females tend to be disproportionately represented in lower paid positions (lower pay quartiles), while more males occupy the higher paid positions (upper pay quartiles). The Gender Pay Gap can be significantly reduced or even eradicated when the ratio of males and females in each pay quartile matches the ratio within the organisation overall.

As well as it now being a legal requirement, studies consistently show that for companies that actively engage to eliminate any Gender Pay Gap, it improves productivity, drives innovation, aids attraction and retention of talent, and has a positive effect on bottom line.

Who does it apply to?

In 2024, organisations with 150 employees or more are being asked to report and will extend to those with 50 employees or more in 2025. The regulations are currently being revised to reflect the reporting obligations for organisations of this size.

What are the reporting requirements?

Currently, organisations are required to report on full-time, part-time, and fixed-term employees across:

  • The Mean and Median gap in hourly remuneration.
  • The Mean and Median gap in bonus remuneration.
  • The % of men and women receiving bonus remuneration.
  • The % of men and women receiving Benefit in Kind.

The regulation also requires the reporting of the respective percentage of employees who fall within 4 pay quartile bands across the organisation – low, lower middle, upper middle, and upper.

Organisations are asked to choose a snapshot date in June and calculations are to be completed based on remuneration data from the 12-months preceding this date. An organisation must report their Gender Pay Gap publicly on their website within 6 months of their snapshot date. For example, an employer who chooses a snapshot date of June 8th has a reporting deadline of December 8th.

An online Gender Pay Gap reporting system is currently being developed where companies will submit their Gender Pay Gap in future.

It is also a requirement for organisations to outline the steps they will take to reduce their Gender Pay Gap. To develop an effective action plan, further analysis on employee data can be completed to identify factors contributing to the pay gap and ensure problem areas are being tackled.

Some Helpful Tips to manage your Gender Pay Gap

The measurement and reporting of the Gender Pay Gap won’t solve the issue of gender balance alone, but it will enable your organisation to gain further insight into what is contributing to the pay gap and identify areas of opportunity for pay gap reduction.

Below are some helpful tips for your organisation relating to Gender Pay Gap measurement and management.

  • Data management system

Calculating your Gender Pay Gap requires the collection and collation of many types of employee’s pay data. Having a robust data management system in place that will collect the required data in a suitable format is fundamental for Gender Pay Gap calculation. When collecting remuneration data, it is important to also collect other measures apart from gender for each employee, such as job title, division or department, and seniority level. These other measures can be used to extract further insight into your organisational Gender Pay Gap later.

  • KPI Measurement

Aside from remuneration data we recommend tracking several KPI’s associated with the movement of people throughout the company. Completing analysis across these measures can give further insight into trends in recruitment, promotion, and employee retention to further support organisational decision making.

Examples of additional data you might measure are details of new joiners, leavers (including reason for leaving), hiring process information including the gender of those shortlisted and longlisted, details of those promoted during each year (including salary raises due to promotion), general salary raises, and % of those eligible taking maternity/paternity leave.

  • Trend analysis

Once your Gender Pay Gap calculations are complete, we recommend taking a deeper dive into the data to identify Gender Pay Gap contributing factors. Identifying these contributing factors can support decision making and a strategy in lowering your pay gap. It can be helpful to compare employee remuneration between males and females across several categories such as seniority level, age, department, and number of years employed at your organisation.

For example, you may find the % of males being promoted is higher than the % of females being promoted. Identifying the cause of this difference can support your action plan towards lowering your Gender Pay Gap.

  • Research & Awareness

Completing research on the causes of the Gender Pay Gap and solutions to reducing it, especially within your industry, can be a good starting point to understand the Gender Pay Gap context for your organisation. Benchmarking against peers can also indicate how you are performing on Gender Pay Gap within your industry. Communicating this information across your organisation from Board level to employees is important in driving your Gender Pay Gap reduction strategy forward.

  • Strategy

Once you have completed appropriate analysis on your Gender Pay Gap data and identified problem areas, it is important to select initiatives and targets that relate to your identified problem areas. Examples of focal areas may include:

  • Promoting pay transparency during the hiring process and ensuring employees understand how their pay is determined.
  • Developing transparent, structured pay tiers with clear criteria for progression and pay increases.
  • Investing in Education and Training to support progression of females through seniority levels.
  • Addressing unconscious bias that may arise during hiring, promotion, and evaluation processes.
  • Engaging with school and university students to educate females on their career opportunities, helping increase female representation in your organisation. This point is especially important if your industry is known to be male dominated.

How Can Clearstream Help?

Clearstream are currently working with several companies to help them calculate their Gender Pay Gap and prepare the supporting action plan. We also offer insight services to inform the development of the action plan.

If you would like more information on these services, please contact info@clearstreamsolutions.ie

Other Information Sources

The Irish government provide clear guidance on reporting requirements and calculation methodologies at gov.ie.

January 17, 2024
3

B Corp Certification with Goodbody Clearstream

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Goodbody Clearstream are delighted to share that Fran McNulty, Director Responsible Business is now a trained B Leader on the Irish B Leaders Database and can guide companies who are interested in B Corp certification.

Certified B Corporations, or B Corps, are companies that have been verified to meet high standards of social and environmental performance, transparency, and accountability.  The vision of the B Corp movement is an inclusive, equitable, and regenerative economic system for all people and the planet.

Fran can support companies through the B Impact Assessment, which evaluates and verifies performance across five impact areas: governance, workers, community, environment, and customers. B Corp Certification not only measures where a company excels now but also commits it to consider stakeholder impact for the long term by integrating it into the company’s legal structure.

More information can be found via B Lab Europe, or B Lab Ireland, whose mission is to oversee the growth of the B Corp movement in Ireland. B Lab is the nonprofit, global network that creates economic systems change through standards, policies, tools, and programs, and certifies B Corps, while also mobilising the B Corp community to tackle the social and environmental challenges we face.

For further information on how Fran can support company through the B Impact Assessment, contact is fran@clearstreamsolutions.ie 

August 3, 2023
4

Unlocking Sustainability: A Deep Dive into EcoVadis

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What is EcoVadis?

EcoVadis is a leading sustainability ratings platform that assesses and rates the environmental and social performance of companies across various industries.

It provides companies with a comprehensive evaluation of their sustainability practices under four main themes: Environment, Labor & Human Rights, Ethics, and Sustainable Procurement, and offers a standardized rating system that enables benchmarking and comparison with industry peers. Under these broad themes it assesses companies progress on topics such as carbon emissions, waste management, labour conditions, diversity and inclusion, anti-corruption measures, and supply chain responsibility.

 

Who uses it?

While EcoVadis is applicable to a wide range of sectors, it is particularly popular for companies operating in the Construction, Retail, Pharmaceutical, IT Services, Financial Services, Transportation & Logistics and Utilities & Energy sectors. It is being used by many multi-national and large corporates to evaluate sustainability progress within their company and within their supply chain.

How does it score companies?

Ratings are provided on a scale of 1 to 100 and is categorized into different levels: Bronze, Silver, Gold, and Platinum.

Bronze: Indicates that a company has made initial efforts toward sustainability and has implemented some basic sustainability practices.

Silver: Indicates that a company has made progress in implementing sustainability practices and has achieved a moderate level of sustainability performance.

Gold: Signifies that a company has achieved a high level of sustainability performance and has implemented comprehensive sustainability practices.

Platinum: Represents the highest level of sustainability performance.

Rating scores are relative, meaning they are based on a company’s performance compared to its peers within the assessed industry.

Pros:

  • EcoVadis provides an evaluation of your company’s current sustainability performance across environmental, social, and ethical dimensions.
  • By assessing supplier sustainability practices and accessing supply chain data, EcoVadis helps mitigate risks associated with environmental, social, and ethical issues.
  • EcoVadis offers a standardized rating system that allows companies to benchmark their sustainability performance against industry peers and understand sector average scores.
  • The assessment helps identify strengths, weaknesses, and improvement areas, enabling companies to make informed decisions and drive sustainability improvements.
  • It facilitates supply chain transparency by assessing and monitoring the sustainability practices of ones suppliers. This transparency helps identify and mitigate sustainability risks and can be a driver of change.
  • Achieving a favourable EcoVadis score can enhance a company’s reputation and build stakeholder trust.
  • EcoVadis helps streamline sustainability reporting by providing a framework for assessing and reporting on environmental, social, and governance (ESG) factors.
  • Globally, it is the most widely used sustainability ratings platform with 100,000+ submissions in 2022.

Cons:

  • Using EcoVadis requires an investment of financial and time based resources. There are costs associated with the assessment process, platform access, and ongoing engagement.
  • While EcoVadis covers a wide range of sustainability criteria, the assessment does not capture the full complexity and context of a company’s sustainability performance. The standardized rating system used by EcoVadis simplifies the complexity of sustainability into a single score.
  • EcoVadis relies on the active participation and cooperation of suppliers for accurate assessment and monitoring.
  • There is a risk of companies focusing on achieving a favorable EcoVadis rating without implementing substantial and meaningful sustainability practices and strategy.

It’s essential for companies to carefully consider these pros and cons in relation to their specific needs, resources, and sustainability goals when deciding whether to use EcoVadis or any other sustainability ratings platform.

Clearstream Solutions Advisory Services – EcoVadis

Clearstream Solutions can play a role in helping clients improve their EcoVadis score by providing guidance, expertise, and support in implementing sustainability practices. Here are several ways we can assist in achieving a better EcoVadis score:

  • Assessment preparation and submission
  • Performance gap analysis
  • Assist in development and execution of robust action plan
  • Policy and procedure review and development
  • Data collection and reporting
  • Training and capacity building
  • Supply chain engagement
  • Continuous improvement support
April 24, 2023
3

Support for businesses going green!

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Ireland aims to decrease its carbon emissions by 51% by 2030 and attain a climate-neutral economy by 2050. To accomplish this, companies are being urged to invest in eco-friendly initiatives, such as sustainable goods, services, and business approaches.

Regardless of your company’s size, it is critical to cut emissions and promote environmentally-friendly practices.

This webpage offers a range of resources, including training, mentoring, and financial support, to help companies reduce their total carbon emissions.

Read full details here

January 18, 2023
0

Webinar Series Delivered by Clearstream Solutions and SustHUB

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Our webinar series aim is to focus on the key topics that are driving value at scale for organisations.  We will share key perspectives and insights and discuss those with key practitioners across business.
The first in our webinar series in on Friday, 27th January: Scaling up the Circular Economy.  Followed by Demystifying Sustainability & ESG Reporting on 24th February and finally, Return on Sustainability Investment on the 31st March.
All webinars are now open for registration and links are available below.  We look forward to seeing you virtually soon.

Scaling up the Circular Economy
27th January 2023 at 12pm

Register here

Circular at scale requires new thinking, new strategies, new tactics, new propositions. Business models and customer-supplier relationships need be reimagined.  Our webinar will focus on developing your ‘circular mindset at scale’. We will hear from circular champions that are embracing the circular economy at scale.  The webinar is ideal for those, across leadership and boards, trying to figure out how to create value in their business through circular thinking. Ensure you design a secure circular value chain to future proof your organisation.  This webinar will be presented by Dr. Declan Bogan, sustHub co-founder and Learning Director at SustHUB and moderated by Brian O’Kennedy, Managing Director @Clearstream Solutions.

Demystifying Sustainability & ESG Reporting
24th February at 12pm

Register here

Are you tasked with managing your way through the ESG and sustainability reporting landscape?  Awash with an alphabet soup of acronyms? Formal external engagement and communications is no longer a nice to have but a must have. CSRD, SFDR, CSDD, TCFD, CDP, GRI…. Do you know what they all are? Are they relevant to you? How to respond?  Are you audit ready?

We plan to demystify some of the new and evolving regulations, disclosure and reporting requirements both here in Europe, the UK and the US.  Hear from those that advise and those that respond. The webinar is ideal for those, across leadership and boards, who wish to build their skills in the practical realities of reporting.

Return on Sustainability Investment
31st March at 12pm

Register here

What is the business case for sustainability?  How do you measure your return on sustainability investment? What are those hard and soft metrics you can use?  Surely it’s just a cost centre – distracting from the real work – delivering on our business value proposition – generating revenues, cutting costs, managing budgets, keeping the lights on?  What sustainability lens might you add? Channel budgets into reimagining and redesigning established processes, legacy products and services, developing initiatives, crafting strategies and bringing new products to market?  What would be the return on sustainability investment?
Let us explore the holistic value that can be created – monetary, human, social, environmental, employer brand, stakeholder value, natural world, professional value.

The webinar is ideal for those, across leadership, looking for and justifying their investment in sustainability – and driving new forms of business value.
Learn about crafting a business case – identifying and justifying the value equation and hear from those that see their return on sustainability investment already paying off.

November 28, 2022
0

COP 27 outcomes and what does it mean for business

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While the U.N. climate negotiations have finished with some minor developments, experts, NGOs and scientists are trying to finalise the progress made and what it means. At Clearstream Solutions, we attempted to summarise COP27 results and what it means for business companies.

U.N. climate negotiations in Egypt (COP27) came up with an agreement to set up a Loss and Damage Fund. The Fund is the first step to addressing injustice to billions of people in developing countries who are the least responsible but suffer the most due to climate impacts: floods, droughts, hurricanes, and rising sea levels.

“The decision on loss and damage finance offers hope to the vulnerable people that they will get adequate help to recover from climate disasters and rebuild their lives,” said Harjeet Singh, head of the global political strategy for Climate Action Network.

The tricky part of the decision on the Lost and Damage Fund is who, how and when will fill it with cash. The agreement on these questions is postponed till COP28 next year in the United Arab Emirates.

While countries’ delegations tried to agree on addressing the consequences of the climate crisis – they failed to focus on the root cause of the crisis: fossil fuels. At the COP in Egypt, fossil fuel lobbyists were presented in high numbers and didn’t save money on side events and champagne.

In the final COP27 text, activists noticed the inclusion of “low-emission” energy as part of the solution. Some experts worry this broad definition may be a loophole for the growth of natural gas and nuclear power.

Countries such as UAE and Saudi Arabia, whose economies rely heavily on fossil fuels, have said they plan to supply the world with gas and oil. With an energy crisis in Europe due to the Russian invasion of Ukraine, some African countries plan to increase their export of fossil fuels to Europe.

With all these controversial talks in the halls and corridors, civil society and scientists keep saying that staying within the 1.5C limit would require even more dramatic and expensive emissions cuts. For now, average global temperatures have risen more than 1.2C since preindustrial times. The latest IPCC report also shows that today’s commitments will increase emissions by 10.6% by 2030 compared to 2010. Meanwhile, the IPCC AR6 report (2022) indicated that CO2 emissions needed to be reduced by 45% by 2030 compared to 2010.

U.N. Secretary-General Antonio Guterres warning our current trajectory places us “on a highway to climate hell with our foot still on the accelerator.”

What about business? 

U.N. climate negotiations get together a wide variety of people: politicians, official delegations, civil society, scientists and, of course, businesses. Last year, COP26 in Glasgow boosted countries’ pledges of emission reductions. It was a good push for many big and small companies to take their more ambitious climate targets towards net zero.

With almost no outcomes on mitigation at COP27, business companies become the essential moving force to address the climate crisis.

A strong focus on net-zero pledges, ESG disclosures, and best practices available for emission reduction will help to compensate poor results of COPs.

“We urgently need every business,  investor, city, state and region to walk the talk on their net zero promises. We cannot afford slow movers, fake  movers or any form of greenwashing.” António Guterres,  UN Secretary General

For some, 1.5°C is very much alive. The companies at COP spoke loudly about the need for governments to make progress on regulations and standards to facilitate the global transition of the private sector. There was also news that the number of companies setting science-based targets (SBTi) has doubled since COP26, with over 1,800 companies having validated targets and 4,000 having committed to setting them.

Loss and Damage fund and business

Although there is no clarity on the Loss and Damage Fund, many experts commented that businesses could capitalise on the subsequent sustainability opportunities in previously underfunded countries. This agreement could open novel markets for companies in infrastructure, manufacturing, capital goods, and more for expansion and business development.

No greenwashing towards NetZero

At COP27, a U.N High Level Expert group release a report about greenwashing and its widespread impacts on successful climate action. The report aims to build on the Race to Zero and Science Based Targets initiative by providing corporates and investors with time-based frameworks to deliver net zero based on short, medium and long-term targets. The U.N. experts provide a list of recommendations to ensure developed net zero pledges do not fall for greenwashing pitfalls.

In the report, experts stress that companies should no longer claim to be net zero if they are still involved in building or investing in new fossil fuel supply or support deforestation and other environmentally destructive activities. Firms should focus on cutting emissions before purchasing carbon credits, which should only be used as a last resort to offset hard-to-abate emissions.

International Organization for Standardization (ISO) presented a NetZeroGuidelines, and  Christoph Winterhalter, ISO Vice-President, explained: “We have the foundation, resources and industry experts to take global action. There are already numerous policy tools and standards available that help to address climate change. It is increasingly clear that we don’t need to reinvent the wheel, just realign it.”

Inflation in carbon prices

We all know inflation is on the rise. The International Monetary Fund (IMF) says that the carbon price must go up to at least $75/ton by 2030 for global climate goals to succeed. This discussion also shows a clear path towards emission reduction as soon as possible because it’ll become more expensive.

Carbon offsets are back. What business should be aware of?

Experts noted a significant increase in offset conversations throughout COP27. Offset and renewable energy projects can help offset a company’s internal emissions or be sold to other organisations falling short. At the same time, business companies should be aware of junk offsets. Purchasing credits to support solar or wind projects sounds good for the climate. However, Bloomberg experts consider these offsets largely bogus. Barbara Haya, the director of the Berkeley Carbon Trading Project, views empty offsets as “paying for business as usual” behind a facade of decarbonisation.

Biodiversity is on the rise

Although COP27 wrapped up past weekend, in December, Montreal is hosting COP15, the U.N. Biodiversity Conference.

Nature can’t be viewed as a secondary, less-important challenge to climate; action in one area impacts the other. Companies and governments need to respond and report to relevant frameworks. For example, in 2021, the Taskforce on Climate-related Financial Disclosures (TCFD) announced a new initiative called the Taskforce on Nature-related Financial Disclosures (TNFD). The framework was tested this year and is scheduled to officially launch in 2023. TNFD mimics the structure of TCFD, intending to help companies and local governments report on the risks associated with biodiversity loss and ecosystem degradation.

At Clearstream Solutions, we strongly believe small and big business companies play a dramatic role in preventing irreversible consequences of climate crisis. That’s why we assist organisations in measuring and implementing best-in-class environmental and sustainable practices in their businesses, products and supply chains to prevent a global climate crisis.

Khrystyna Rudnytska

Sustainability Program Associate

Clearstream Solutions

Sources:

September 12, 2022
0

What does Life Cycle Analysis (LCA) mean?

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Are you unclear about the environmental impact of your product, packaging or service?  Is it harmful to the environment or to your customers?  Or has your product environmental benefits over your competition?

With almost 50% of all emissions embodied in materials, it is important to gain transparency of the environmental impact associated with your products. Your customers are increasingly likely to want to measure the impact of the products and services they procure from you as they will appear in their Scope 3 GHG emissions.

Improving the sustainability of products and services will likely be different for every business.  The approach requires holistic overview & analytical accuracy of the end to end process… from ‘Cradle to Grave’.  Implementing a life cycle assessment (LCA), will systematically record the entire life cycle of a product of service.  This is done by capturing and analysing its impact on the environment typically in terms of GHG emissions. However, other environmental impacts may also be measured.

With almost 50% of all emissions are embodied in materials, it is important to gain transparency of your environmental impacts associated with your products and services.

With over 25 years industry experience in the LCA, Clearstream Solutions and its team of expert assessors manage and conduct LCA’s, to identify the right actions and approach for your business by measuring the environmental impact assessments of your products and services.  As a result, this process can be used to assess alternatives and identify the appropriate actions required to reduce your carbon footprint.

An LCA is broken down into four main steps: goal and scope, inventory analysis, impact assessment and interpretation.  By doing a LCA, this process will assist in purposefully locating and then implementing sustainable processes optimisations.

Goal and scope: this is the step where the aim and boundaries of the project and defined. Here the focus area is decided, and how in depth of an analysis done is chosen.

Inventory analysis: the data collection for all inputs and outputs.

Impact assessment: converting the data into impacts

Interpretation: arguably the most important step, this is where the impacts are quantified, evaluated and checked against the aim.

Coca Cola  is widely considered the first to ever complete a life cycle assessment.  Back in 1969. They wanted an all-inclusive study of their packaging, accounting for energy, waste and resources. The large majority of LCAs from the early days focused on packaging. For instance, LCA was used for its ability to assess emissions, energy usage, waste and resources.

Why use LCA?

Life cycle assessment helps guide you to the best solution. Firstly, It allows you to review the overall picture before making a decision. Up to 80% of a product’s environmental impact can be determined during the design phase. Secondly, Using LCA, it can highlight areas with high impacts in the current process, and areas the design could be optimised. Moreover, LCA as a tool during design can lead to less prototyping and secure resources to the ideal places. In conclusion encouraging more creative and innovative solutions. It can be linked to increases in circularity and help not only reduce waste but allow comparisons between sourcing. The process can cover raw material extraction, transportation, all manufacturing processes and stages, use-phase, and the end-of-life possibilities. All inputs are broken into the various single components for the product and shows the outputs that happen from this. An LCA not only accounts for the carbon footprint but other environmental impacts like water acidification or human health impacts.

LCA is a reporting tool, with benchmarking and analysis the bases for the process. It can however be used to alter designs and encourage broader thinking during this stage. Having a visual representation of the impacts, with ease for comparing different sources, allows the design teams to pick the best option for their product for both people and the planet.

How does LCA tie in with the circular economy?

LCA can help strengthen the circular economy. It is a robust tool that measures the environmental impact and can model how utilising the circular economy will improve the impacts of life extension, reuse, harvesting, repair, and disposal.

In addition, removing the disposal section will show the limitations and highlight the alternatives. Using Life Cycle Analysis and Circular Economy thinking will help implement circularity throughout the business. Using and embracing LCA can lead to innovative steps and continued growth.

LCA is a way of thinking that includes the economic, social and environmental consequences of a product or process over its entire life cycle – UENP Life Cycle Initiative.

Using Life Cycle Analysis during the design process an aid in decision making. Some advantages to LCA:

  • Shows the consequences of each stage of the products life
  • Update and innovate without prototyping
  • Shows how small changes can affect the overall impact
  • Can gather information on not only land impacts, but water, air and human affects too
  • Aid carbon foot printing
  • Make more informed decisions
  • Compare different products to find best solution
  • Can help identify improvement areas
  • Can include material extraction, manufacturing processes, use, end of life solutions
  • CE & LCA – interconnected
    • How recovery of waste will remove emissions
    • Planning strategies for future projects
    • Design out pollution

Aoife Green is a Product Sustainability Associate at Clearstream Solutions. Aoife graduated from Dublin City University with a MEng in Sustainable Energy & Systems and a bachelor’s in Mechanical & Manufacturing Engineering.

February 28, 2022
3

What does the EU Taxonomy mean for large companies?

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EU Taxonomy mean for large companiesNon-financial and sustainability reporting has become an integral part of business operations over the last number of years. However, understanding climate risk and opportunity continues to prove a significant challenge for investors and corporates alike. The EU Taxonomy is part of the broader EU Action Plan on Sustainable Finance which seeks to offer clarity to investors and large companies in relation to the sustainability of their business operations. In doing so, it is anticipated that the taxonomy will create security for investors, prevent greenwashing, help companies to become more climate-friendly and help shift investments to more sustainable initiatives.

What is the EU Taxonomy?

The EU Taxonomy is a list of economic activities with performance criteria for their contribution to six environmental objectives. It is part of a wider EU sustainable finance action plan to reorient capital flows towards a more sustainable economy. To begin with, large companies that fall under the scope of the Non-Financial Reporting Directive (NFRD) i.e. with greater than 500 employees, are obligated to comply with the EU Taxonomy. Those that fall under the incoming Corporate Sustainability Reporting Directive (CSRD) i.e. greater than 250 employees, will also be required to disclose their alignment to the Taxonomy.

What areas of sustainable development does the EU Taxonomy address?

The EU Taxonomy targets six key environmental objectives:

The EU Taxonomy targets six key environmental objectives

Each of the above objectives contains a list of business activities with screening criteria, to identify whether the activity makes a substantial contribution to the objective. So far screening criteria has been issued for the first two climate change objectives of mitigation and adaptation, resulting in the identification of nearly 70 activities for each. It is anticipated that further criteria will be released for the remaining objectives, ahead of full compliance requirements in 2023.

Assessing the organisations economic activities.

As part of the initial process the company will undertake an evaluation process to identify if any of their current business activities makes a substantial contribution to one of the six environmental objectives as set forth under the remit of the Taxonomy. Once the company is satisfied that one or more of their current trading activities make a substantial contribution to one of the objectives, they must ensure, that the activity Does No Significant Harm (DNSH) to the remaining objectives.

Considering the environmental impact of a business activity is the main priority of the Taxonomy, however, companies must also consider the social impact by meeting the minimum social safeguards. Once an activity has met the above criteria, it can be considered Taxonomy-aligned and included as part of a disclosure. The Taxonomy seeks to address high emitting areas so in practice may have multiple Taxonomy-aligned economic activities or alternatively have very few. It will eventually expand to include a broader range of economic activities, which in turn may increase an entities level of alignment.

How does a company disclose its Taxonomy-alignment?

The Technical Expert Group (TEG) established by the European Commission have identified three Key Performance Indicators (KPIs) that companies must disclose in order to quantify their Taxonomy-alignment [1] the percentage of Turnover deriving from Taxonomy-aligned activities [2] the percentage of Capital Expenditure (CapEx) spent on Taxonomy-aligned activities and [3] the percentage of Operating Expenditure (OpEx) deriving from Taxonomy-aligned economic activities. Alongside these numeric KPIs, companies must disclose qualitative information including the companies accounting policy and any assumptions made during the calculation of each KPI.

When does the Taxonomy apply to Public Interest Entities (PIEs)?

The EU Taxonomy has adopted a phased approach to its introduction. Initially, companies will be required to report the percentage of their Turnover, CapEx and OpEx that is considered Taxonomy-eligible. In future years companies will be required to use the Technical Screening Criteria to assess if their activities are Taxonomy-aligned.

How can Clearstream Solutions help?

As a leading ESG corporate reporting advisory firm, Clearstream Solutions is well positioned to help companies seeking assistance with the EU Taxonomy and non-financial reporting related requirements. We can help you to identify how and to what extent the EU Taxonomy effects your business by performing a full analysis of your companies activities, assisting you in drafting the required disclosures, and by developing a reporting roadmap for future alignment. Please feel free to contact our ESG reporting team to discuss your needs.

April 20, 2021
0

New Climate Fund launched to Help Businesses Adapt

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As an approved Green Service provider, Clearstream Solutions can get you ready for a Green Future.
Last week the Climate Enterprise Action Fund with an initial allocation of €10m was launched. This Climate Enterprise Action Fund is now available to help companies reduce emissions & embed sustainability in how they work.
The Fund, which will be administered by Enterprise Ireland, through approved Green Service providers, will help businesses take action to drive down their emissions and embed sustainability in how they work.
This new fund supports Irish companies to build the capabilities required to deliver sustainable products, services and business models.

The grant funds companies to engage Clearstream Solutions to identify opportunities for your business and develop plans in areas like resource efficiency, renewable energy and the circular economy.

As an approved Green Service provider, financial supports available which reflect the needs of companies at different stages of their decarbonisation and sustainability journey also include the GreenStart and GreenPlus grants.

Contact brian@clearstreamsolutions.ie to discuss your Green Future journey.