Thank you for inviting me to speak at this very important and timely event.
The upheavals of the past year have most certainly given a renewed impetus to tackling climate change.
In particular, the response to COVID-19 has illustrated our ability to take urgent and decisive action, at international, national and regional level.
Indeed, the Covid response has exemplified the critically important role multilateralism has to play in effectively addressing existential challenges.
The pandemic has also given an additional impetus to the importance of sustainable living because the necessary public health restrictions have meant that many people are working from home and spending far more time in their localities and relying on active travel, such as walking and cycling.
Accelerating the transition to a low-carbon green, more sustainable, economy will become one of the key planks to our post-Covid recovery as we start re-opening life as the public health crisis abates in line with increased vaccine roll-out.
The pandemic has progressed our understanding of the delicate relationship between the natural environment and the resilience of our societies.
This has refocussed minds on the need to embed sustainability in policy design, and has underscored the imperative that our strategies for stimulating the economic recovery must be underpinned by the goal of ‘building back better’.
Climate action requires a response across every sector of our economy and society and involves all Ministers of our Government.
As Finance Minister, my priorities are to ensure that Ireland has the right economic, fiscal and financial services policies to support our climate ambition and, on the international stage, the right policies to support climate action, resilience and adaptation in the developing world.
Ireland’s Domestic Climate Action
I will begin by talking about Ireland’s domestic climate ambition.
Our Programme for Government sets out our ambitious commitment to lead as an exemplar in decarbonising our economy.
Specifically, we are committed to achieving seven percent emissions reductions on average per annum from 2021 to 2030 and to achieving net-zero emissions by 2050.
A new Climate Action Plan is being developed across all sectors of Government in order to give substance to this step up in ambition.
The Plan will set out actions to ensure we deliver on our commitments, including our 2030 targets, preparing for climate neutrality by 2050 at the latest, and making Ireland a leader in responding to climate change.
Related to this, landmark legislation in the form of the Climate Action Bill is currently progressing through our Parliament that significantly strengthens the governance structure for climate action in Ireland, especially by putting the 2050 net zero target into law and establishing a series of five year carbon budgets across the key sectors of our economy.
The new Climate Action plan will be supported by the economic strategies we are putting in place to secure a sustainable future for our country.
In this regard, we will soon announce our National Economic Recovery Plan, which has the objective of rebuilding the economy in the aftermath of the pandemic, helping people return to work and supporting sectors that have been disproportionately affected.
The Plan will set out the future direction for a sustainable and resilient Irish economy aligned with the Government’s green and digital ambitions.
At EU level, we have submitted our National Recovery and Resilience Plan for approval by the EU for support under the Recovery and Resilience Fund.
Our plan will set out an ambitious but targeted programme of impactful, mature investments and reforms up to 2026, with an important emphasis on advancing the green transition, which covers the bulk of our Plan.
Increased EU ambition
To succeed in tackling climate change it is imperative that we take collective action at all levels, from international cooperation to the levels of businesses and civic society.
Of course, to drive behavioural change at both individual and business level, it is important that there is policy certainty, and leadership at global, supranational and national level.
The EU has shown leadership in committing to climate neutrality by 2050 as the central objective of the European Green Deal, consistent with Ireland and the EU’s commitments under the Paris Agreement.
The Green Deal means:
- Investing in environmentally-friendly technologies;
- Supporting innovation and green industrial policy;
- Helping the development of cleaner forms of transport;
- Decarbonising the energy sector;
- Ensuring buildings become more energy efficient; and
- Working internationally to improve standards around the world.
Recognising the increasing urgency of climate action, the EU has also agreed to increase its emissions reduction target from 40 per cent to 55 per cent by 2030 in order to accelerate the transition to net zero by 2050.
Ireland is strongly supportive of this increased ambition, which will be turned into action through the comprehensive ‘Fit for 55 Package’ of policy measures due to be announced later this summer.
The package will provide the basis for the fundamental and radical transformation that we need to undertake to decarbonise our economies.
We have to acknowledge that this will be immensely challenging and that there will be winners and losers; however together, we have the capacity to make this happen in an equitable manner.
The first step is to make sure that the EU’s recovery is green and we have been strongly supportive of the emphasis on ensuring that the European Green Deal is central to defining the post-COVID-19 economic stimulus package.
Climate action is now a key priority across all areas of EU activity. As President of Eurogroup, I fully expect that the themes of sustainability and green transition will continue to feature ever more prominently in our discussions and our work programme where they are already a key focus.
Beyond the EU level, international cooperation is a prerequisite for the achievement of our climate goals. While the Paris Agreement is delivering on raising global climate ambition, further effort is required if we are to make a meaningful timely impact to address the climate challenge.
A positive outcome at COP26 in Glasgow this year is critical to secure increased emissions reductions to avoid and prevent irreversible climate change.
In this regard, I welcome the fact that the USA will work closely with the EU as we prepare for COP26 and that the U.S. Treasury will co-chair the G20 sustainable finance group.
As President of the Eurogroup, I look forward to working with the USA on this important initiative.
International institutions, such as the World Bank, the IMF and regional multilateral development banks have been at the vanguard of the global Covid-19 responses and they have a central role to play in climate action.
As efforts begin to refocus beyond this emergency response, these multilateral institutions are ambitious to secure a green, resilient and inclusive recovery to provide a longer term framework for enabling the needed economic and social transformations.
Finance Ministers are also active at international level and Ireland, as a founding member, is an active member of the Coalition of Finance Ministers for Climate Action which currently has 61 member countries.
This Coalition recognises the challenges posed by climate change, the unique capacity of the world's finance ministers to address these challenges, and the ways in which these efforts can be strengthened through collective engagement. I am very happy to be involved in this important work as Ireland’s Finance Minister.
Sustainable Finance Activities
A key focus for Finance Ministers at national, EU and international level is financing the transition to low carbon and decarbonised economies and putting in place mechanisms to ensure that the financial sector can support the transition, in particular through assisting companies in realigning business models towards net-zero goals and funding transformative technology and innovations.
Ireland has been and continues to be a strong supporter of integrating sustainability into the financial system in tangible, coherent and transparent ways.
Progress on such EU-level frameworks as the EU Taxonomy for sustainable activities, the Disclosures regulation and the Corporate Sustainability Reporting Directive have established a strong regulatory foundation.
The implementation of these major initiatives will become instrumental in increasing transparency and thereby mobilising capital towards our common sustainability goals.
The Taxonomy Regulation itself establishes a harmonised classification system for environmentally sustainable economic activities, and will have a significant role in supporting the mobilisation of capital towards sustainable investments.
Through providing common definitions to companies, investors and policymakers on what constitutes an environmentally sustainable economic activity, it creates security for investors and protects private investors from greenwashing.
Additionally, it can assist companies in reliably planning for the low-carbon and environmental transition. It should also increase access to finance by including more economic activities and providing more environmental goals than previously.
This enhances the value of the Taxonomy for both investors and businesses, the classic ‘win-win’, which also helps environmental concerns.
As we now work on the country’s post-COVID-19 recovery, which aims to base our recovery on fairness, accessibility and on a just transition to a green, low-carbon, sustainable economy, both public and private sector investments must have a commonly held understanding of sustainability at their core, and these important standard-setting initiatives will play a major role.
In the financial services sphere, Ireland was among the first countries to make Green Finance a strategic priority and since 2012 the Government has been steadily supporting the build-up of expertise in this area.
Substantial green and sustainable funds are under management in Ireland as sustainability and Environmental, Social and Governance (ESG) objectives move from niche to the broad mainstream.
We are committed to building up this progress and I am glad to mention that as part of the Government’s Ireland for Finance Action Plan 2021, an Irish Road to COP26 campaign targeted at the Irish-located financial services sector is now underway.
One of the highlights of the ‘Road to COP26’ campaign is Ireland’s fourth Climate Finance Week to be held this October.
As in other years, this will highlight the critical role that finance and financial services have in enabling the transition to a low-carbon economy by facilitating the funding of climate mitigation and adaptation.
It also ensures that climate and environmental concerns are included as an essential component of finance and financing. Part of the essential DNA in a manner similar to risk and returns.
This event is taking place at a very important juncture as we prepare for COP 26 in a reality that we could not have foreseen even two years ago.
The ongoing response to COVID19 has shown what can be achieved when we work together for the common good.
We now need to harness this same energy and commitment to meet the even greater challenge of climate change but this is a change which can bring many new opportunities and improved quality of life for our citizens.
I hope I have given you some sense today of my commitment as Irish Finance Minister and as President of the Eurogroup to playing my role in contributing to meeting this challenge.
Thank you for your attention and I Iook forward to today’s panel discussion, and, in particular, the insights from the panel of experts. I also look forward to the rest of the events over the next two days and hope that all participants have very fruitful and productive engagement.