The challenges of tackling climate change requires actions from the whole community, businesses, households and policymakers.
The costs involved in the Climate Action Plan need to be shared. The Government has confirmed most of the €125bn cost of the Climate Action Plan will be borne by individuals, households and the private sector, and not by the State.
Government policies on taxation, expenditure, sustainable finance, spatial planning and research and development provide an important enabling framework for individual, household, community and company-level climate action.
There are a number of taxation incentives already in place such as:
Cartbon tax revenue
Carbon tax revenue of €412m has been allocated to the programmes for 2022:
The Network for Greening the Financial System (NGFS), created in 2017, is a network of central banks and financial supervisors that aims to accelerate the scaling up of green finance and develop central banks’ role for climate change. Irish banks currently offer a range of green products, such as green mortgages for more energy efficient homes, green loans for solar panels or renewable energy projects, or finance for electric cars at competitive pricing.
Central Bank of Ireland
The Central Bank of Ireland (CBI, part of the NGFS) has stated the financial system will play a pivotal role in serving the needs of consumers and the wider economy as the transition occurs to a carbon neutral future. Governor Gabriel Makhlouf, said: “In the Central Bank we will play our part and lead by example in our own actions, as well as delivering on our mandate to ensure that the financial system is resilient to climate-related risks and ready to support the transition to a more sustainable world.
“We have established a dedicated Climate Change Unit to bring additional focus to our work in this area.”
Bank of Ireland (BOI) aims to have €5bn of sustainable finance loans by 2024 to satisfy demand from both households and large corporations for often cheaper green loans. According to BOI’s chief strategy officer Mark Spain: “The fund of €5bn covers BOI’s suite of green loans designed to incentivise home owners and businesses to be more energy efficient.”
The bank is supporting its customers on their low-carbon journey in a range of sectors, such as carbon sequestration, (the planting of 600,000 native trees as recreational amenities for local communities while sequestering and storing carbon), house and property, (financing green mortgages, retrofits and energy-efficient upgrades), transport (finance for electric vehicles, battery electric vehicles and hybrids), energy (renewable energy projects), and everyday banking (such as bio-sourced debit cards).
AIB set a target in 2020 for green lending to account for 70% of new customer advances by 2030, including financing for energy-efficient homes, electric vehicles and renewable energy projects. According to the bank, in the first six months of 2021, over 20% of their new lending was green/transitional drawdowns. In October, the bank announced it was doubling its climate action fund to €10bn (from €5bn) to support individuals and businesses to make the transition. This is to support both personal products and corporate products such as funding renewables and energy efficient buildings. AIB CEO Colin Hunt said: “We are committed to playing a significant role in helping the Government and EU meet their carbon reduction targets. We are supporting the drive towards decarbonisation by accelerating the roll out of products and services that assist our customer’s transition to a low carbon future.”
An Post is one of 28 leading financial institutions (BOI is also one), worldwide to sign up to a first-of-its-kind commitment to promote universal financial inclusion and foster a banking sector that supports the financial health of customers. The Principles for Responsible Banking enable a financial institution to embed sustainability across all its business areas, and to identify where it has the potential to make the most impact in its contributions to a sustainable world. An Post state its core values as “being human about money” and is launching a range of digital money management tools, later this month, to help customers to better manage their day-to-day finances.
Green and Environmental, Social and Governance (ESG) investments concentrate on companies that pursue good ESG agendas. There have been high investment in these companies over the past few years. If interested in investing, it is good advice to choose a specialist fund manager as this can be a complex and technical area, involving renewable technologies in either solar, wind or nuclear. As with any investment you need to do your homework, to ensure you do not lose your money.