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Green Public Financial Management: an accelerating agenda

IASeminars has launched an insightful and informative virtual classroom training event on the topic of Green Public Financial Management

In this useful blog post, course facilitators Iolo Llewelyn CPFA MA BSc (Econ) and Dr Tim Thorogood MA (Cantab) MA Ed MBA PhD, provide some background to the Green PFM landscape, and explain the benefits of this new two session event.

As governments and other public sector entities sign up to challenging green objectives such as climate change targets the role of public finance in achieving the agenda is increasingly scrutinised: for example PEFA* have just published an evaluatory Public Financial Management Framework, PEFA Climate.

This follows the spirit of the 2016 UN Paris Agreement made under the United Nations Framework Convention on Climate Change which stressed the need to make ‘finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.’ 

All aspects of public financial management make critical contributions to achieving a green agenda:  budgeting, fiscal policy, subsidies, project funding, fund management, procurement, and financial and non-financial reporting. But as academics and practitioners develop best practice on the role of finance in the green agenda a myriad of ideas, methods and standards are rapidly developing. For example in financial reporting there are several alternative standards such as GRI, SASB and IIRC initially developed in the private sector and being adapted for the public sector.

Charting a clear path through the challenging, confusing and rapidly changing agenda in a time-effective manner is critical to public finance professionals and others involved in public policy who want to understand the potential role of finance. IA Seminars’ launch of an introductory seminar, Green Public Financial Management, responds to this need.

The seminar will give participants a broad understanding of the range of current issues and the roles of public finance in the green agenda. After summarising the current state of play the seminar will outline how the latest thinking in green public finance can be applied to budget formulation, budget execution and budget reporting. Budget formulation will include strategic budgeting for sustainability (including techniques such as BACLIAT, sSWOT and  PESTEL), Climate Change Fiscal Risk Assessments, approaches to sustainable budgeting (Green Budget Baseline Analysis; Green balance sheet; Green Budget Fiscal Sustainability Reporting) and Environmental Cost Benefit Analysis.

Budget execution will include the use of fiscal rules, Fiscal Policies for Climate Action (including Tax decarbonisation, Carbon budgets, Carbon taxes, Resource rents/non- renewables and emissions trading), Green Public Procurement, Green finance (including examples of green bonds and green funds),  use of green subsidies and green fund management. Negative impacts such as push-back from business and public, fraud/waste risks and market distortions, will be considered.

Finally, external financial and non-financial reporting will address sustainability reporting in general purpose financial reports,  the various sustainability reporting frameworks (the UNFCCC, GRI, SASB, IIRC, national and entity specific frameworks) and consider which framework best meets the needs of individual public entities. The need for independent assurance over reporting will also be considered together with the possible audit approaches (AA1000AS, ISAE 3000, INTOSAI etc), concentrating on the needs of reporting entities and users of sustainability reports.

Bringing together both current research and extensive financial management, accounting and audit experience the introductory Green Public Financial Management seminar will equip finance professionals and others interested in how to achieve green policy with an introduction to this highly current but complex topic in a way which is both up to date and informed by extensive practical experience.

The seminar will be provided by Iolo Llewelyn CPFA MA BSc (Econ) and Dr Tim Thorogood MA (Cantab) MA Ed MBA PhD who combine both considerable senior practical experience with current research at Cardiff Busines School.

Tim ThorogoodDr Tim Thorogood is a former Swansea Council chief executive, chief executive of the respected think tank the Local Government Information Unit and chief executive of the Falkland Islands. After gaining a History degree at Cambridge he later completed a Masters in Education, an MBA and then a PhD in strategic management and now works as a Visiting Fellow at Cardiff Business School and lecturer/trainer in public finance to senior international delegations and UK civil servants. After founding the “outstandingly successful” South Atlantic Environmental Research Institute in the Falklands Tim has deepened his interest in governments’ roles in the green agenda, and has now combined his interests in environmental issues and financial management to develop courses in green financial management using the latest thinking in both green finance and management.

Iolo LlewelynIolo Llewelyn CPFA, MA, BSc (Econ)  has worked in public sector audit in various roles for 30 years. Prior to October 2016, Iolo had a long and varied career with the Wales Audit Office (WAO) - a UK regional public sector audit body. As the Head of the WAO’s Technical Unit, Iolo was responsible for developing and maintaining the WAO’s audit methodologies and for providing guidance and training to auditors and audited bodies on developments in financial reporting. Iolo was for many years a member of the Chartered Institute of Public Finance and Accountancy (CIPFA)’s Accounting and Auditing Standards Panel and had input into  CIPFA’s development of integrated reporting for the public sector and also the Wales Audit Office’s methodology for auditing  arrangements established under Wales’ Well-being of Future Generations Act.

* The Public Expenditure and Financial Accountability (PEFA) program was initiated in 2001 by seven international development partners: The European Commission, International Monetary Fund, World Bank, and the governments of France, Norway, Switzerland, and the United Kingdom.

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