OECD Presentation "Financial reporting, sustainability information and assurance" by Peter Welch during the 5th Session during the 9th Meeting of the OECD Paris Collaborative on Green Budgeting held on 17 and 18 of April 2023 in Paris

1. Financial reporting,
sustainability information and
assurance
Paris Collaborative on Green Budgeting
Peter Welch
Senior Advisor, OECD
Paris,18 April 2023 Photo by Kelly:
https://www.pexels.com/photo/to
p-view-photo-of-solar-panels-

2. Are we on track? According to the European Environment Agency
Greenhouse gas emissions Member State targets
2
The EU met its 2020 targets on greenhouse gas emissions…

3. 3
The EU added a fourth 20 % target: using 20 % of the budget for climate action
Most of the discrepancy related to agriculture
To a significant extent, this involved tagging existing spending programmes with a potential climate impact
There is a political decision that 30 % of the EU
agricultural budget is to be used for “Greening”.
This does not lead to a commensurate change in
behaviour…
Areas of natural constraint v wetlands
Contributions of MSs
Spending v commitments v budgets

4. 4
Different approaches
The ECA benchmarked EU
approaches to tagging against
some national systems – notably
France.
It found areas where France
performed its assessment of climate
impact better.
These differences explain a small
part of the overall discrepancy
between the EC and ECA
quantification of the climate share of
the EU budget.

5. 5
The EEA gives a great deal of the credit to the ETS…
> Achievements in GHG emissions reductions since 2005 vary
at the sectoral level. Emissions in the EU-27 covered by the
EU Emissions Trading System (ETS), which mainly covers
the energy supply and industry sectors, were 37% below
2005 levels in 2021.
This is not a spending
measure – tagging will not
cover it…

6. 6
IPCC estimates
If Parliamentary
time is the metric,
there is really no
debate…
According to the IPCC

7. 7
IPCC extract: cost-efficiency
Are we financing the right activities?

8. Challenges and conclusions
> Would it be helpful to have more transparency on
Green taxes?
> Can we afford to tag spending as green where it
has a small impact on carbon emissions?
> How will climate change affect public sector
assets?
> How do we coordinate the roles of account
preparers, environmental agencies and
statisticians?
Challenges Conclusions
8
There are lessons to be learned in terms of
measuring the buck…
…but we really need to measure the bang
…and answer the question “are we on
track?”