Governance

We aim to deliver a safe, consistently excellent, efficient and cost-effective energy service that benefits all customers. We adhere to policies and practices which are sustainable, aligned with industry best practice, and promote economic growth.

Natural gas is of key strategic importance to the Irish economy, representing 32% of Ireland’s primary energy mix and generating 48% of Ireland’s electricity, peaking at 92% of electricity generation during 2022. Ireland’s gas network is a valuable national asset which will play a major role in achieving a clean energy future in a least cost, safe and secure manner.

Natural gas is the ideal partner for renewable energy sources such as wind and solar and the gas network will continue to play a critical role in Ireland’s energy sector. Renewable gas can ensure that Ireland has a robust, renewable and sustainable indigenous energy source as part of our energy mix well into the future. Coupled with the long-term potential of hydrogen gas, the gas network can play a crucial role in supporting Ireland’s delivery of climate change targets.

Investing in our future

With safety as a priority for our assets and operations, we invested €133m in our gas and telecoms network infrastructure with a strong focus on driving growth and on transitioning our gas supply to renewable technologies such as biomethane and hydrogen and delivering programmes to improve the safety and reliability of the network.

The Government has set an increased target of 5.7TWh/yr of biomethane on the national gas network by 2030. During 2022 there has been growth in renewable gas injected into our network, with circa 1% biomethane on our network. In late October we issued a Request for Information (RFI) from biomethane producers. This RFI will identify new and feasible biomethane production projects to supply biomethane to the Irish gas network. This information will be used to prepare plans for gas network developments to facilitate both the most economic delivery of biomethane to our customers and the most economic connections to producers.

Gas Networks Ireland is expected to begin construction of Ireland’s first large-scale renewable gas injection facility next summer. Planning permission for the Central Grid Injection (CGI) facility has already been granted by An Bord Pleanála and Cork County Council. This forms part of the €30 million Green Renewable Agricultural Zero Emissions (GRAZE) renewable gas project. Led by Gas Networks Ireland, the GRAZE project is supported by more than €8.4 million in funding from the Climate Action Fund, as part of the Government’s National Energy Security Framework.

With an increased focus on the need for renewable gases, such as biomethane and hydrogen, to replace natural gas in Ireland’s energy mix and enhance Ireland’s security and diversity of supply in light of recent climate reports and the invasion of Ukraine, the establishment of a national Renewable Gas Registry is both timely and critical to the industry’s success. In August 2022, Ireland took another significant step towards meeting its climate action targets, with a formal certification process now in place for renewable gases entering the national network.

Gas Networks Ireland has been appointed as the body responsible for issuing Guarantees of Origin for renewable gases in line with European Union (Renewable Energy) Regulations 2022, which has passed into Irish law. We will issue Guarantees of Origin in accordance with a supervisory framework to be established by the Commission for Regulation of Utilities, meaning that producers of renewable gas will be issued with a Guarantee of Origin for every megawatt hour of renewable gas injected into Ireland’s national gas network.

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Innovation

As well as keeping safety as our priority, we strive to improve our network and we actively promote and utilise our Innovation Fund which provides funding to promote and encourage innovative projects in the gas industry with the potential to:

  • Deliver significant carbon savings

  • Increase throughput in the gas system

  • Assist in the transition to a low carbon economy

  • Provide measurable value to all gas customers

Our network must be repurposed to transport renewable gases, biomethane and hydrogen, at scale and support Ireland’s climate change agenda. In December 2022, Gas Networks Ireland submitted its technical and safety feasibility study report on injecting green hydrogen blends into Irelands gas network which indicated that it will be both safe and feasible to utilise the existing gas network to transport blended hydrogen. However, before injecting hydrogen into the network, further detailed research will be required.

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Ethics and Integrity

Our reputation and the trust and confidence that our customers, stakeholders and the general public place in us is fundamental to our success. Integrity is key to building that trust. We have created a programme called “Doing the Right Thing” to help all employees understand and recognise the importance of the “Integrity” value.

Employees are trained to ensure that any business decision made is:

  1. Legal
  2. In line with company values
  3. In line with company policy
  4. The right thing to do


As part of the initiative, guidance booklets are issued to employees on key ethics related policies with annual training updates and quarterly team integrity conversations.

As a commercial state body, we are an open organisation which strives to be accountable and transparent to the public. We are committed to improving the public’s understanding of how the organisation operates and our role in delivering important national infrastructure and services to support the social and economic development of Ireland.

Controls are in place to ensure all our obligations are met, including detailed financial procedures, budgets, finance system automated workflows, external audit process, internal audit process and Audit and Risk Committee oversight of the financial statements.

We continue to be committed to meeting and exceeding our data protection obligations. All customer data is stored on encrypted systems that have appropriate segregation of duties. We have TLS (Transfer Layer Security) in place with customer facing vendors which encrypts all emails. We also have strong internal security controls around firewalls, patching, anti-virus protection etc, and align ourselves to ISO27001. All staff and contractors have undertaken online GDPR training.

The Gas Networks Ireland Data Protection Officer has not raised any areas of significant concern regarding noncompliance with regards to legislative requirements under GDPR during 2022.

We actively promote a culture where acts of bribery and corruption are never acceptable. This culture is promoted and led by the Ervia and Gas Networks Ireland boards, executive and extended senior leadership team. Nobody within Ervia or Gas Networks Ireland or acting on behalf of either company, may give or accept, directly or indirectly, a bribe or inducement in any form or solicit a bribe, directly or indirectly. An example of behaviours prohibited in this context is the giving or receiving of excessive gifts or hospitality or receiving gifts or hospitality in exchange for information.

The Gas Networks Ireland Chief Legal Officer is responsible within Ervia and Gas Networks Ireland for overseeing all anti-bribery actions and the Gas Networks Ireland Director of People is responsible for communicating our anti-bribery policy to all new staff during induction. As well as providing quarterly and annual refreshers on relevant anti-bribery and corruption topics for existing staff in accordance with Ervia / Gas Networks Ireland’s “Doing The Right Thing” policy.

Ervia and Gas Networks Ireland’s policies encourage staff to report any concerns relating to activities that may constitute an act of bribery or corruption to their line manager without delay – or if that is inappropriate in the circumstances to Gas Networks Ireland’s Chief Legal Officer, or anonymously to a confidential email address or voicemail. Staff are routinely reminded of their ability to discuss concerns relating to bribery or corruption without fear of victimisation, knowing that the strictest confidence will be maintained – this process is outlined in Ervia / Gas Networks Ireland’s Protected Disclosures Policy.

The mechanism whereby Ervia and Gas Networks Ireland employees and management may raise concerns, or make disclosures in the public interest, in accordance with the Protected Disclosures Act 2014 (as amended), is outlined in the Ervia / Gas Networks Ireland Protected Disclosures Policy. Guidance on raising concerns for management and employees is outlined in the Code of Business Conduct, the Anti-Fraud Policy and the Anti-Bribery and Anti-Corruption Policy. Section 22 of the Protected Disclosures Act 2014 (as amended) requires Ervia to publish an Annual Report providing details of protected disclosures made under the Act during the preceding calendar year. Per this requirement, Ervia confirmed that, in the year ending 31 December 2022, no protected disclosures was made to either Ervia or Gas Ethics and Integrity Gas Networks Ireland - Sustainability in action 2022 Overview Environment Social Governance Appendices 68 Networks Ireland under the Act. Accordingly, no breach was reported and no investigation or proceeding was commenced in 2022.

Ervia and its subsidiary (Gas Networks Ireland) are registered on the lobbying register maintained by the Standards in Public Office Commission and have made the required submissions for the return periods in 2022 in accordance with the requirements of the Regulation of Lobbying Act 2015.

Appropriate internal financial controls are in place within Ervia and Gas Networks Ireland to ensure compliance with the provisions of the European Communities (Late Payments in Commercial Transactions) Regulations 2012-2016. Ervia is a signatory to the Prompt Payment Code as launched by the Government in 2015 and, pursuant to its provisions, undertakes to pay suppliers on time, to give clear guidance to suppliers on payment procedures and to encourage the adoption of the code by suppliers within their own supply chains.

We have a zero-tolerance approach to modern slavery. We are committed to acting ethically and with integrity in all our business dealings and relationships and to implementing and enforcing effective systems and controls to ensure modern slavery is not taking place anywhere in our own business or in any of our supply chains. We are committed to ensuring that there is transparency in our business and in our approach to tackling modern slavery throughout our supply chain and we expect the same high standards from all our contractors, suppliers and other business partners.

Steps taken to prevent acts of slavery and human trafficking from occurring within our business and supply chains:

  • We always seek to comply with employment law applicable to the jurisdictions in which we operate and put in place contractual arrangements with providers of agency staff requiring that they achieve the same level of compliance.
  • The principles of the UK Modern Slavery Act 2015 have been enshrined in the Code of Business Conduct which is reviewed on an annual basis. This is also highlighted and supported by a group-wide programme called Doing the Right Thing which aims to ensure that everyone carrying out business on behalf of Ervia or Gas Networks Ireland does so with integrity and in an ethical manner.
  • We have developed anti-slavery and human trafficking requirements for incorporation into our procurement processes and contractual arrangements with contractors, suppliers and other third parties.
  • We have completed a modern slavery assessment of third party contractors and suppliers to assess any high risk of acts of slavery / human trafficking. The assessment included workshops with high priority suppliers and review of their modern slavery policies and procedures.
  • We provide training to relevant employees, particularly those involved in procurement processes, on the risks of slavery and human trafficking occurring.
  • We provide a mechanism for employees, and others, to report suspected incidents of unlawful behaviour, including slavery and human trafficking.
  • We have also conducted an initial assessment of suppliers with an annual spend of greater than €500,000 who source elements of their materials or labour from outside of Europe.

Financial performance

We delivered a satisfactory financial performance during 2022, particularly in the context of significant inflationary cost pressures mainly as a result of energy uncertainty linked to the ongoing invasion of Ukraine. We recorded a Profit before Tax of €68m and had undrawn committed facilities of €312m and €149m of cash and cash equivalents at December 31st 2022.

This will allow us to continue funding future investment in the gas network. Additionally, when working with debt holders and credit rating agencies, we continue to commit to the climate change agenda and the targets we have set ourselves to 2050.

We maintained our investment grade credit ratings with Moody’s and S&P in 2022. This strong credit rating enables Gas Networks Ireland to access a wide range of funding sources and ensures its continued access to competitively priced funding.

  • Return to the Shareholder:

    In 2022 we supported Ireland’s economy by making a dividend payment of €30m to the Exchequer

    1 — 4

  • Investors:

    We paid out €15.7m to investors in interest payments

    2 — 4

  • State support:

    We paid €11.7m to the Irish & UK governments and regulators in tax, rates and levies

    3 — 4

  • Employees:

    We paid €61.5m to employees in 2022

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Taxation policies

We are committed to complying fully with all applicable laws, rules and regulations in meeting our tax compliance and reporting responsibilities. We fulfil our corporate social responsibility obligations by paying appropriate taxes in compliance with both the letter and the spirit of the laws and regulations in both Ireland and the UK. Ireland and the UK are the primary locations where we operate and further detail on our subsidiaries, primary activities and the taxes paid by our business are included in the Gas Networks Ireland financial statements available on our website.

Our Board has overall responsibility for risk management and the systems of internal control. The Group Chief Financial Officer is the executive responsible for ensuring that we comply with all applicable laws, rules and regulations associated with tax compliance.

We have a quarterly risk governance process in place which identifies the nature, extent and financial implication of risks we face including tax risks and also assessing our ability to manage and mitigate risks that may occur through putting appropriate controls and actions in place and also reports the risk profile to the Risk Management Committee and onwards to our Board and the Audit and Risk Committee of the Ervia Board.

Across the Ervia Group, fraud, bribery and corruption are not tolerated and it is each employee’s responsibility to report any suspected acts of fraud, bribery or corruption or suspicious behaviour they encounter, this would include any tax concerns that are identified.

The internal control environment includes internal policies requiring all employees to act with integrity and maintain the highest ethical standards. These polices include the Code of Business Conduct, Anti- Fraud, Anti-Bribery and Anti-Corruption, Lobbying and Protected Disclosures policies. It also includes a comprehensive anti-fraud programme including anti-fraud policy, training and communication and a fraud response plan.

The following principles are applied to maintain and improve tax compliance:

  • Hiring of tax and accounting qualified personnel to manage the tax obligations of the company
  • Paying the right amount of tax and filing all necessary tax returns based on the tax laws, rules and regulations. These returns and payments will be made in full and on time
  • Maintaining segregation of duties to ensure the preparation and review steps in filing all tax returns are completed independently
  • Training and support provided to all non-tax qualified personnel with responsibilities for tax required information to ensure that they have the skills, technical expertise and knowledge to effectively and accurately fulfil their tax responsibilities and perform to the best of their abilities
  • Ensuring key risk areas are monitored and material risks minimised by adhering to strict controls to ensure material compliance with all applicable tax laws, rules and regulations
  • Engaging with the tax authorities and / or procuring the support of tax accounting firms where legislation is unclear or is subject to interpretation

Following the review of the Group’s annual corporation and deferred tax workings the auditor issues a letter of compliance confirming the tax charges are materially correct and that statutory obligations of timely filing of corporation tax returns have been fulfilled.

The financial note detailing our tax expense for 2022 can be found in Note 8 of the overall Gas Networks Ireland Annual Report.

We have an open and transparent relationship with all tax authorities, working to maintain and improve good tax corporate governance. We have signed up to the Co-operative Compliance Framework (CCF) with Irish Revenue.

The CCF is designed to promote open communication between Irish Revenue and larger taxpayers, reflecting the mutual interest in being accurate about tax liabilities. This provides for a relationship based on trust and cooperation between Irish Revenue and large businesses where both parties work together to achieve the highest possible level of tax compliance.

Supply chain

Gas Networks Ireland ensures environmental and sustainability requirements are embedded in the procurement processes right through to delivery stage of the contract. For example, since 2011, our main/larger contractors are required to provide us with monthly reports on their sustainability performance against a range of sustainability KPIs which include, waste management, carbon management and energy use.

Our main third-party contracts have been designed to deliver sustainability and environmental best practice throughout project lifecycle. Where contractors outperform set KPIs, the financial terms of the contract contain provisions to allow for additional performance awards to be made. Similarly, KPI underperformance can result in the imposition of financial performance adjustments. As part of the tendering process in 2020/2021 when procuring our two new main contractors, we ensured our enhanced Sustainability Strategy objectives were key to the tender and contract requirements. In addition to waste data management, energy and carbon performance KPIs we have now also included new more challenging requirements around waste reduction targets, Biodiversity Enhancement Planning, Green Sustainable Procurement Planning, Sustainability Planning, Community Programmes, Carbon Emissions Management as part of our new contracts.

There are no significant variations in the above disclosures and all data was compiled using internal data management systems.

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