This is a briefing following the distribution of the Summer 2023 edition of the Matheson Horizon Tracker. Matheson LLP distributes this Horizon Tracker to its client and contact list. As usual the Tracker describes key Irish and EU legislative and regulatory developments within the framework of the publication of the Irish Government legislative programme for that particular Oireachtas session. For this Summer 2023 session, we have continued to take an approach which reviews progress of the programme through the Oireachtas session, rather than previewing what might happen at the start of the session. Similarly, during this period, we have tracked progress of key developments from Europe and from national regulators, in particular the Central Bank.
The influence of developments at EU level continue to have a significant impact on legislative and regulatory developments. This is particularly evident in the ESG space. In this Summer Horizon Tracker one of our commentary sections is Environmental, Social and Governance, giving ESG its full name, reminding ourselves and clients, that in addition to environmental matters, there will also be a focus on 'social' issues in the short to medium term. As policy supporting environmental regulation has changed in direction and emphasis to outputs addressing climate change more broadly, so will the focus of ESG turn increasingly to social aspects. Whilst this emphasis will develop over the coming years, what is currently obvious is that all across our practice areas ESG is a dominant motif. From funds, through finance, to commercial real estate and on to corporate sustainability reporting, the momentum of change has picked up considerably.
Green Funds and Sustainable Finance
When the European Commission published its responses to the European Supervisory Authorities' questions on the implementation of the Sustainable Finance Disclosure Regulation ("SFDR") in April this year, many welcomed the fact that the Commission did not introduce new restrictions on what can be defined as a "sustainable investment", stating that it is for financial market participants to make this assessment and to disclose their methodology.
See further the commentary in the Tracker from our Asset Management and Investment Funds practice area.
This development is reflective of a voluntarist approach underpinning the EU Green Bonds initiative discussed in our Finance and Capital Markets section. Here we describe how, in July 2021, the European Commission proposed a voluntary EU green bond standard ("GBS") under a proposed regulation on European green bonds (the "GB Regulation"). Following this initiative a provisional agreement was announced between the Council and the Parliament on 28 February 2023 after the fourth round of trilogue negotiations and most recently, following these negotiations between the EU institutions, a provisionally agreed text was made available on 10 May 2023. The provisionally agreed text has now been sent for formal ratification by both the Council of the European Union and the European Parliament.
More details on the provisional text of the EU Green Bonds initiative are available in the Horizon Tracker and in additional Matheson Insight pieces.
Corporate Social Responsibility Reporting
In an area that is related to investment and funds the Horizon Tracker keeps our clients up to date on developments in corporate sustainability reporting with a consideration of the Corporate Sustainability Reporting Directive (CSRD) which has now been passed by the EU, and awaiting transposition, and the more recently proposed, and as yet to be passed, Corporate Sustainability Due Diligence Directive (CSDDD).
The Horizon Tracker reflects themes which we have covered in our Knowledge Insights Series over the past six months. Most recently, at the end of May we held an event on the CSR in collaboration with PWC which can be accessed on our Knowledge Hub.
For more see our Corporate commentary on the CSRD and the CSDDD
Similarly, the introduction of a consumer representative action framework which we mentioned in the last Tracker, and which is described in more detail in our commentary for the Summer Tracker, will change the litigation landscape, if not immediately, certainly in the medium term. This was the subject of another Knowledge Insight Series event in May. Potential changes in litigation will be accelerated, particularly if and when this development is coupled with recommendations from the Kelly Report and the Company Law Review Group supporting the availability of third party funding for actions in limited areas. In a related area we continue to monitor developments in reporting obligations.
You can access both webinars on the Matheson Knowledge Hub
Commercial Real Estate
In the specialised area of commercial real estate the description of changes in relation to monitoring carbon emissions of buildings and the potential effect of the Performance of Buildings Directive makes for compelling reading. We describe EU developments in detail together with potential knock on effects in relation to Stranded Real Estate.
Tax Disputes and International Tax developments.
Reflecting the importance of our Tax practice at Matheson there are two significant developments covered in the Horizon Tracker. The first, the continued impressive performance of the Tax Appeals Commission as a forum for resolving Irish tax disputes, with TAC closing its highest number of appeals to date in 2022. We note the significant increase from 2021 on the number of hearings and also the significance of corporation tax appeals in terms of value. In a related area, and given what we know to be the increasingly complex international tax landscape, including the proliferation of disputes, we discuss the use of Advance Pricing Agreements ("APAs") and Mutual Agreement Procedures ("MAPs") as effective mechanisms to prevent and resolve disputes. Both descriptions reflect our expertise in this area as evidenced by further Matheson Insights on APAs and MAPs and related OECD developments detailed below.
OECD MAP Statistics for 2021 – Irish Competent Authority is top of the class in MAP
InDisputes: Irish Tax Appeals Commission continues to impress
InDisputes: Better Together? The Future of Multilateral Tax Controversy
For further information please consult the Summer 2023 Edition of the Matheson Horizon Tracker
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
