Developing a Responsible Business Compass for Ireland

Markets and regulators are increasingly requiring businesses to act more responsibly in their own activities and along global value chains (GVCs). Following the European Green Deal announcement that ambitions to make the EU climate-neutral by 2050, the European Commission (EC) has set a package of measures, with more than 100 associated pieces of legislation concluded or in negotiation.

The new EU legislation sets out obligations for businesses, affecting operations and supply chains within and outside the EU. Business compliance can affect integration in GVCs and competitiveness, while not all firms are on an even field for coping with regulatory complexity.

The Government of Ireland has noted that Irish businesses are struggling to understand their obligations and prepare for different requirements. They also face difficulties in identifying where to find national support. This is particularly acute for smaller businesses that may lack internal capacity to navigate complexity and uncertainty, while larger, well-resourced businesses have also signalled need for clarification and simplification. At the same time, Ireland’s policymakers need clarity on how national policy initiatives interact, and where there are synergies or risks of duplication, in order to avoid confusion, reduce administrative burdens for business and promote effective compliance.

In this context, Ireland’s Department of Enterprise, Tourism and Employment (DETE) has requested support from the European Commission through the Technical Support Instrument (TSI) to develop a Responsible Business Compass. The future Compass, to be built by DETE, will help policy makers and businesses navigate the EU legislation and the identify relevant national policy support.

The Project on “Developing a Responsible Business Compass for Ireland” aims to support Ireland in developing a tool that will identify synergies and risks of duplication across Departments and levels of government, e.g. in reporting and requirements, and support Ireland in coordinating policy action. The future Compass will also help businesses understand their obligations and find relevant government support.

To prepare its recommendations on the features of the future Compass, the OECD has mapped and analysed selected EU sustainability legislation and Ireland’s business support system, and developed a pilot visualisation tool to navigate content and visualise key interactions between EU legislation, national institutions and support measures. 

• Nine pieces of EU legislation have been identified of particular relevance for Ireland. These broadly address: (1) human rights, environmental and labour due diligence expectations, as well as targeted measures on forced labour and deforestation, (2) transformative changes for the circular economy, and (3) carbon leakage. 
• 13 Irish Departments and agencies are engaged in a system-wide policy dialogue, at national and subnational levels, covering a broad range of policy areas, from enterprise, trade and investment, employment, education and welfare, climate and energy, regional development or consumer policy. A mapping of Ireland’ business support system identifies key institutional players and track interactions and synergies in the policy mix.
• To inform the policy dialogue and engage the business community and civil society into the co-design of the future Compass, a pilot tool was developed that explores mappings and linkages and tests functionalities.
• Policy makers, large and small businesses, and citizens were invited to comment on the testing tool and share feedback on user experience during a public consultation.

OECD recommendations for Ireland’s future Compass will be published, together with 1) an analytical report that presents the key findings of the mappings, and methodological and technical information, and 2) the interactive report that enables a dynamic exploration.