I’ve said before how proud I am that this island, despite its small size, manages to set such a good example in terms of meeting international standards on a range of issues.
Financial services is the example with which I’m personally most familiar, having worked in this sector for the past 30 years or so – but there are many others.
However, there’s one key area – and it’s not over-stating the case to say that it may be the most important set of issues mankind has faced for many thousands of years – where we fall shockingly short.
This is in the area of sustainability and, specifically, anthropogenic (manmade) climate change. Whilst most major economies, including our near neighbours over the water, are taking concrete action despite the troubled economic times, our local leaders show very little sign of even being alive to these issues.
I’ve yet to see much, other than passing references to climate change in local legislation and strategy, and nothing implying that our government is determined to stand shoulder-to-shoulder with other countries, large and small, on this matter.
Nor has there been any real engagement with the public on the issue, despite the likelihood that it’ll affect your life and mine, and those of our children, more than almost anything else on the horizon.
It’s hard to see this lack of acknowledgement as indicative of anything but either a) a pitiful level of awareness and understanding or b) a blatantly selfish determination to pursue antiquated measures of economic welfare at the expense of, well, just about everything and everyone else, really.
Neither option’s very cheering, so let’s hope I’m wrong and that there’s a third option. Perhaps the Tynwald astrologer has told LegCo that it’s all going to turn out fine, uh....y’know......somehow?.
At the very least, we could ensure that the sector which has historically underpinned so much of the island’s growth doesn’t contribute to further problems.
I’m referring, of course, to the finance sector – including the company management and incorporation services which form a substantial part of this.
At international level, we’re seeing increasing concerns about the contribution of ‘offshore financial centres’ to a number of environmental problems, climate change amongst them.
The perception is, rightly or wrongly, that companies incorporated and managed from lower-tax locations such as the island are outside the direct purview of rules being introduced to protect Earth’s fragile ecosystem.
Notably, many worthwhile pieces of environmentally-helpful law have come out of UN and EU initiatives, and as far as climate change is concerned, these aren’t being reflected locally.
So whilst many companies operating in (say) the UK have to meet laws on reporting and reducing their carbon emmissions, the rafts of companies domiciled here often fall outside the net.
On December 18, 2012, the UK’s Department for Environment, Food and Rural Affairs (Defra) held a major ‘workshop’ session in London. Its aim was to thrash out draft guidance on what will be new mandatory reporting requirements for UK quoted companies, about their Carbon Dioxide (CO2) and other ‘greenhouse gas’ (GHG) emissions.
These cover a total of six GHGs, including the best known, CO2. There’s a possibility that a seventh, nitrogen trifluoride, will also be added.
This new legal obligation will be introduced under the (now draft) Greenhouse Gas Emissions (Directors’ Reports) Regulations 2013, and it’s a mark of how seriously the UK Government takes the manmade element of climate change, and its duty to play a part in the global effort to deal with this.
It’s an obligation that Defra has been given under Section 85 of the Climate Change Act 2008.
This required the UK government, by 6 April 2012, either to make regulations requiring directors’ reports to cover their companies’ GHG emissions, or to lay a report before Parliament explaining why it wasn’t doing so.
In the event, the government opted to make industry take on this extra work, despite the additional effort and cost that would be involved; it was seen as a worthwhile step despite any impact on Britain’s international competitiveness.
In the next few years, a decision will be taken as to whether to include all large companies and not just quoted ones – but for the time being, focusing on quoted companies makes the new requirements applicable to many major contributors to GHGs, and it’s reasonably policeable and enforceable.
International centres such as the Isle of Man come under fire for all sorts of things: harmful tax practices, potential for abuse by money launderers, terrorist financiers and fraudsters.
We do well in meeting these challenges, and making changes to our regimes where need be. We should be considering the introduction of a regime, perhaps implemented through the existing regulatory framework for fiduciary services providers, whereby locally incorporated or managed structures also have to account for their contribution (where it’s proportionate) to the biggest challenge we’ll see to the global economy and wellbeing in our lifetimes.
For all sorts of reasons, let’s not be the bad guys!