Erin Go Bragh: Ireland Makes a Bid to Be Global Leader in Sustainable Finance

2613987274_d73817ba0f_o"Ireland will be developed as a centre of excellence in green finance and carbon management." -- Strategy for the International Financial Services Industry in Ireland 2011-2016

The Irish could use a little bit of their famous luck these days. The standardized unemployment rate for July, recently released by the Central Statistics Office (CSO) is a staggering 14.3 percent, worse than nations accustomed to chronic joblessness, like Tunisia (13 percent), Kenya (12.7 percent), Slovenia (11.6 percent) and Colombia (10.9 percent). Struggling mightily from its first recession since the 1980s, which grew out of the global financial crisis of 2008, Ireland is now facing a GDP growth that is 25 percent less than its pre-crisis trend. The CSO also said that between April 2009 to April 2010, an estimated 34,500 people left Europe's third-largest island, marking the highest outward migration since 1989. Statistically speaking, that's like the entire population of Philadelphia leaving the United States, and then some.

THE SILVER LINING OF AIRLANN'S CLOUD

One of the few bright spots is the nation's International Financial Services Center (IFSC), a leading global financial services center set up with the imprimatur of the European Union in 1987. According to their website, the IFSC handles "a range of internationally traded financial services, including banking, asset financing, fund management, corporate treasury management, investment management, custody and administration and specialised insurance operations." Over the past decade, the IFSC has witnessed rapid growth, expanding by almost 400% to now employ almost 33,000 people, representing 7.4 percent of GDP and contributing €1.4 billion in corporate tax and €700 million in payroll tax.

Last month, the Irish taoiseach (prime minister) Enda Kenny launched the "Strategy for the International Financial Services Industry in Ireland 2011-2016," a document that outlines his vision for the development of the IFSC. In his foreword to the document, Kenny wrote that the objective of the new plan is "to create more than 10,000 net new jobs, to protect existing employment and business and to consolidate the sector as a key driver of the Irish economy over the next five years...It is a strategy which recognises and fully supports the critical importance of a credible, responsible and proportionate regulatory system whose own capacity and reputation provides, in itself, a source of competitive advantage for this jurisdiction, attracting reputable, responsible and sustainable financial services activity."

"The IFSC has shown extraordinary resilience through the global financial crisis," said Kenny in an official press release, adding that the center  is "a testament to the value of focused cooperation between industry and the public sector."

GREEN BUSINESS FOR THE EMERALD ISLE

According to the policy document, "Ireland will be developed as a centre of excellence in green finance and carbon management, through the creation of an enabling, coordinated and supportive environment. This will be achieved through the Green IFSC initiative built on an enabling tax, legislative, regulatory and compliance framework. This will result in the expansion of many of the existing IFSC sectors and the creation of new areas of opportunity including carbon management, IP commercialisation, private equity investment and 'Green Tech' fund management."

The Green IFSC was launched earlier this year with the aim to transform the IFSC into "a green hub for green businesses to set up shop in Ireland," according to the IFSC website.. KPMG's Mike Hayes, who sits on the Green IFSC steering committee, said that the initiative has the potential to make Ireland a main support center for the renewable and cleantech sectors on a global scale. "We not only have the industry expertise, we have the regulatory framework in terms of a good legal environment, we're very good on intellectual property, and also we have the tax and fiscal environment," he said.

The country's tax framework will also be enhanced to help give Ireland "first-mover advantage in developing sustainable business lines." In addition to job creation and sustainable business, the strategy also focuses on moving Ireland into a leadership position in the arena of "green finance."

SCOIL IS IN SESSION

Considering the nation's new focus on green finance, next month's launch of a new postgraduate course in sustainable finance at Dublin City University Business School couldn't be better timed. After the successful completion of the one-year, part-time course, participants receive a Graduate Certificate in Sustainable Finance.

DCU says that the course offers a "broad and comprehensive overview of sustainability finance to support new business streams within investment banks, professional firms working in the broader green economy and companies which are developing renewable products and technologies" and will give finance professionals "an understanding of climate change principles and policy responses, risk management and regulations, technologies and emerging markets, finance, carbon accounting and tax."

The Irish writer and poet Oscar Wilde famously called education a process "which makes one rogue cleverer than another." As far as rogues go, that may be so. But with the DCU's green finance certification program, finance professionals -- roguish or otherwise -- may also be better equipped to navigate sustainable financing strategies in Ireland and beyond. And if some of those postgrads decide to use their newfound skills to help meet the Taoiseach’s 5-year IFSC goals, perhaps Ireland won't even need any of that famous luck.

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NOTES

http://taxpolicy.gov.ie/wp-content/uploads/2011/07/IFSC-Strategy-2011.pdf
http://www.cso.ie/releasespublications/documents/labour_market/2011/lreg_july2011.pdf
http://www.tradingeconomics.com/unemployment-rates-list-by-country
http://www.economist.com/blogs/dailychart/2011/08/gdp-recovery-recession
http://www.cso.ie/releasespublications/documents/population/current/popmig.pdf
http://www.ifsc.ie/page.aspx?idpage=6
http://www.taoiseach.gov.ie/eng/Government_Press_Office/Taoiseach's_Press_Releases_20111/Taoiseach_launches_the_Strategy_for_the_International_Financial_Services_Industry_in_Ireland_2011-_2016Thursday,_14th_July_2011.html
Ibid., 1.
Ibid., 7.
Ibid., 1.
http://www.ifsc.ie/article.aspx?idnews=73968&newsletter=58
http://www.businessandleadership.com/sustainability/item/30495-towards-a-green-ifsc
Ibid., 1.
http://www.dcu.ie/prospective/deginfo.php?classname=GCSTF°ree_description=Graduate+Certificate+in+Sustainable+Finance

image: Wind turbines in Wexford, Ireland (credit: Michael Foley Photography, Wikimedia Commons)

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