Increased Fossil Fuel Divestment: Motion [Private Members]

Deputy Thomas Pringle

I move:

That Dáil Éireann:

acknowledges that:

— the Fossil Fuel Divestment Act 2018 is something that Ireland should remain proud of in its capacity of setting a global standard;

— the purpose of the Act was to mandate the movement of financial investments by the Ireland Strategic Investment Fund (ISIF) away from fossil fuels, thus encouraging continued future investment in renewable energy and infrastructure; and

— the United Nations (UN) reports that fossil fuels, namely coal, oil and gas, are by far the largest contributor to global climate change, accounting for over 75 per cent of global greenhouse gas emissions and nearly 90 per cent of all carbon dioxide emissions;

further acknowledges that:

— there is an urgent and necessary requirement to amend the Fossil Fuel Divestment Act 2018;

— the purpose and ethos of the Act is being undermined by the exploitation of legislative loopholes found within the wording of said Act;

— the Act is principally concerned with fossil fuel exploration only, as opposed to all fossil fuel use, with a limited exception, which essentially still allows for investment from the ISIF in fossil fuel use;

— section 49A (1) of the National Treasury Management Agency (Amendment) Act 2014 (as amended by the Fossil Fuel Divestment Act 2018) contains an exclusionary clause that permits indirect investment in fossil fuel undertakings to be made in financial derivative instruments, exchange traded funds or hedge funds;

— while the Act in its original form brought about significant change, reviewing it in practice over the last five years has afforded us insights into issues that must be addressed;

— on January 2023, Irish financial institutions held US$13.2 million in bonds and shares attributable to fossil fuels in the Global South, of this the ISIF held US$11.2 million, mostly in bonds issued by Chinese electric utility company State Grid Corporation of China;

— at the beginning of 2023, the ISIF also held US$12.5 million in bonds and shares attributable to agribusiness in the Global South, of this the ISIF held US$12.1 million and Waystone34 accounted for the majority of the remaining investments;

— these investments are contrary to the spirit of the 2018 Act and demonstrate that investments are still being made in the fossil fuel industry and therefore the Act must be amended to ensure that such loopholes cannot be availed of via indirect investment and financial vehicles;

— although falling outside the scope of the 2018 Act, reports show that investment managers registered in Ireland held US$6.2 billion in bonds and shares attributable to fossil fuels and agribusiness in the Global South alone, which indicates that the Fossil Fuel Divestment Act 2018 is an important step but a modest one;

— as outlined clearly in the 2023 ActionAid Report, How the Finance Flows: The banks fuelling the climate crisis, there is a significant need for the Government to consider the scope of the Act and the Act should extend beyond fossil fuel "undertakings" to include "fossil fuel utilisation", which should be defined in a manner that targets economic entities that fall within an agreed bracket so as to strike a balance that allows for meaningful climate policy while acknowledging any existing barriers within the renewable infrastructure;

— a limitation of the 2018 Act is that investments in companies that depend on fossil fuels, such as agribusiness and agrichemical companies, are not prohibited by the Act thereby allowing for the continued financing of environmentally damaging activities;

— industrial agriculture, and the unsustainable food system that it supplies, is also a major source of greenhouse gas emissions, with the Intergovernmental Panel on Climate Change reporting that the agriculture, forestry and other land use sector accounts for 13-21 per cent of greenhouse gas emissions globally from four main emissions sources: carbon dioxide emissions from land use change, including deforestation to make way for agriculture; the production and application of synthetic nitrogen fertilisers ("fossil fertilisers") and agrochemicals; livestock emissions from enteric fermentation and manure; and methane emissions from rice paddies;

— industrialised agriculture globally is typified by large-scale plantations; widespread application of agrochemical fertilisers, pesticides and herbicides; hybrid or genetically modified seeds sold by corporations which need to be purchased anew each year; mechanised farming; monocultures of single crop varieties covering hundreds of hectares; and commodity crops destined for export, with corporations known as "agribusinesses" controlling and profiting from almost every step of the process; and

— Ireland is ideally placed to start the process of getting the proposed Fossil Fuel Non-Proliferation Treaty initiative on the diplomatic and UN agenda given its commitment to climate action, rejection of further offshore exploration licences and its membership of the Beyond Oil and Gas Alliance diplomatic initiative;

calls on the Government to:

— signal its commitment to a sustainable, resilient, and zero-carbon future by endorsing the development of a Fossil Fuel Non-Proliferation Treaty and joining the bloc of states seeking a negotiating mandate;

— amend the Fossil Fuel Divestment Act 2018, in a manner that will widen its reach so that it is applicable to all funds within the ISIF, by removing the exclusionary clause within section 49A (1) of the National Treasury Management Agency (Amendment) Act 2014 (as amended by the Fossil Fuel Divestment Act 2018) regarding financial derivative instruments, exchange traded funds or hedge funds;

— ensure meaningful steps are taken to protect the climate and our children's future, while acknowledging the significant role of small and medium-sized enterprises and Ireland's agri-economy; and

— ensure that the investments made by the ISIF are not being made in a way that is contributing to the alarming damage that fossil fuels and agribusiness are proven to cause; and

further calls on the Government to:

— incorporate a provision to allow for a review of the Act every 3-4 years to ensure that the purpose and impact of this legislation is being carried through;

— ensure that it reviews and analyses relevant structures and processes to ensure that investment made through Foreign Direct Investment and international subsidiaries based in Ireland do not undermine our climate and development objectives;

— consider new regulations and policies to phase-out financing to fossil fuels and steer away from harmful industrial agriculture and other high-emitting activities, which should include a requirement that banks and other financial institutions operating in Ireland develop climate transition plans consistent with a 1.5° Celsius climate goal and which should cover all financed emissions with no offsets, and be subject to sanctions for non-compliance; and

— ensure a coherent and equitable approach to preventing emissions at source and a coordinated just transition globally.

I thank the Leas-Cheann Comhairle.

We’re at a tipping point, and if countries fail to commit to a full fossil fuel phase-out, the future is bleak ... It is not good enough to use weak language or to permit loopholes for the fossil fuel industry to continue to contribute to the very problem countries are meant to be committed to tackling.

These were the words of Mary Robinson last month in respect of COP28, which held its final negotiations yesterday and which, in my opinion, was a complete farce. We face a terrifying reality, not just because our world is changing and becoming increasingly volatile and unliveable but because many of those who are supposed to be leading the fight against climate change are at best watery on climate commitments and at worst verging dangerously towards climate denial.

The fact the president of COP28, Sultan Al Jaber, has claimed there is “no science” indicating a phase-out of fossil fuels is needed to restrict global heating to 1.5°C is incredibly worrying and just is not true, according to years of research. The argument we simply cannot live without fossil fuels is not true either. It will require major change, but that fact cannot escape the fact we have no other choice. Our world is changing, whether we like it or not, so we can either change with it or allow our children to face the consequences. The announcement yesterday of an agreement at COP is welcome and makes this motion more timely, but the wording remains very weak. Indeed, in the wake of COP28, this motion is very timely, and I would ask those who contribute today to consider its importance and the importance of their words and leadership as public representatives. We have a duty to inform our constituents about the future of this planet in the best and most honest way we can, without the spread of mistruths or unnecessary scaremongering.

I am delighted to introduce today’s motion on increased fossil fuel divestment. I was very proud to introduce the Fossil Fuel Divestment Act 2018, landmark legislation that was an important and notable step forward in ensuring our laws reflect the national commitments made in tackling global warming and climate change. It was a proud moment for Ireland and it made this country a global pioneer in divesting public money from fossil fuels. Let us be clear, however; it was a modest step towards our goal.

Unfortunately, the legislation was not successful in divesting completely from fossil fuels. Since the enactment of the Fossil Fuel Divestment Bill in 2018, investments are still being made. At the beginning of 2023, the Ireland Strategic Investment Fund, ISIF, held $12.5 million in bonds and shares attributable to agribusiness in the global south. Of this, the Ireland Strategic Investment Fund held $12.1 million dollars, with Waystone accounting for the majority of the remaining investments. This is largely due to the ability of investment managers and funds to take advantage of the exclusionary clause regarding indirect investment for certain financial vehicles such as hedge funds and pension funds. The main loophole in the 2018 Act is that the Act contains an exclusionary clause that permits indirect investment in fossil fuel undertakings to be made in financial derivative instruments, exchange traded funds or hedge funds. While an outright investment, therefore, in a particular fossil fuel undertaking is prohibited, an indirect holding through a hedge fund is permitted. This undermines the overall intention behind the 2018 Act and is completely against the spirit of it.

Recently published research by ActionAid shows European banks have provided a staggering $327 billion of financing to fossil fuel and agribusiness activities in the global south in the seven years since the Paris Agreement, with $6.2 billion coming from financial institutions in Ireland. Ireland needs to address this as a matter of urgency, along with working with any EU regulation. Amending the 2018 Act would be a clear and meaningful action towards ensuring proper divestment, and that is what today’s motion calls for. Without closing these loopholes, investment in fossil fuels will continue and our apparent commitment to stopping environmental endangerment caused by fossil fuels will become little more than lip service.

I understand that some Members of this House would rather we moved tentatively when it comes to finding the balance between enterprise and the environment, but the cold, hard facts of the matter are that our climate is changing and fossil fuels are significantly responsible. For a long time the threat and reality of the situation was easy to dismiss in temperate, rainy Ireland. There is a deep injustice in this, given that those who have done the least to cause this climate crisis and who have the least capacity to absorb and recover from its impacts are suffering the most from them.

Even Ireland is now beginning to feel the effects of climate change. Heatwaves scorched the country this summer, not even reaching the highs our neighbours on the Continent are experiencing year on year, and as a result wildfires had devastating effects on places such as Greece and Hawaii. This was followed by weeks-long deluges. October saw Donegal and other parts of the country reach highs of 20°C. We may have joked about how nice it was, but our farmers felt the impact on their crops. Our countryside and ecosystem battled to recover. Climate legislation is not anti-farmer; it is pro-farmer due to the fact its main aim is to protect the land on which so many farmers rely to provide us all with food. Winter storms and floods are becoming more and more frequent. Homes and businesses are under water with such regularity that people cannot even get insured. Just a few days ago, a localised tornado caused significant damage in County Leitrim. Every year is more volatile and increasingly extreme, and this is just what we are experiencing in Ireland. All of it is, without a doubt, due to climate change.

The United Nations reports that fossil fuels, namely, coal, oil and gas, are by far the largest contributor to global climate change, accounting for more than 75% of global greenhouse gas emissions and nearly 90% of all carbon dioxide emissions. While the statistics on fossil fuels are shocking, they are also very well known and acknowledged. I am not saying anything controversial or unknown today. All the facts and statistics have been widely published and accepted. Many organisations have done much of the heavy work by producing such fantastic and thorough research, and I would like to take this opportunity to thank Trócaire and ActionAid, whose research constitutes most of this motion and which provided me with great assistance in its drafting. Their support and that of the public show just how important it is that Ireland continues to be a world leader in fossil fuel divestment.

After fossil fuels, agribusiness is the largest contributor to climate change. The EPA reports that in 2022, in Ireland alone, the agriculture sector was directly responsible for 38.4% of national greenhouse gas emissions. Giant agribusiness corporations, which have an industrialised approach, are responsible for the bulk of emissions in the sector. Industrialised agriculture drives deforestation and expands factory farming. To do so, companies aggressively market agrochemicals, which leads to high volumes of greenhouse gas emissions. The industrialised agribusiness sector uses fossil fuels to produce these agrochemicals. This is just one example of the interdependence of fossil fuel and agribusiness industries.

I am aware that any discussion on agriculture here is of great interest, and rightly so. That is why this conversation is so important and of particular relevance to Ireland, a farming nation. The farming industry needs to recognise that the giant agribusiness sector undermines smallholder farmers. Farms that implement agro-ecological farming systems are having their efforts thwarted by the giant industrialised farming mechanisms that undo their good work a hundredfold. The financing of fossil fuels and industrial agriculture actively contributes to and causes catastrophic environmental damage. It exacerbates the impacts of climate change that are already devastating communities and risks locking countries into building expensive and debt-dependent infrastructure rather than developing alternatives.

Perhaps the increasingly rapid threat and demise of our environment is still not a sufficient motive to vote in favour of further environmental protections, in which case let us consider the money. Research shows moving slowly on policy and environmental implementations may be of detriment to financial investments as well as the climate.

Due to the global transition toward a more sustainable economic and environmental model, fossil fuel investments are becoming increasingly less attractive. While Ireland helped to lead the way with the enactment of the Fossil Fuel Divestment Act in 2018, international governments and the global financial world are actively pursuing greener and more environmentally conscious enterprises. Fossil fuel investments are now being consistently outperformed by renewables. According to Forbes magazine, investment in renewable power continues to outperform fossil fuel investment across the globe. This is based on statistics showing that investment in renewables has a return seven times higher than investment in fossil fuels. This trend has been corroborated by numerous studies, including by Imperial College London and the International Energy Agency, which have found that investment in renewable energy technology significantly outpaces investment in fossil fuels. The reason for this is largely due to affordability and security concerns triggered by the global energy crisis. What this tells us today is that our decision is essentially a simple one. Removing the indirect investment exclusion clause will mean that investment funds and managers will no longer be able to utilise financial vehicles to indirectly invest in fossil fuels.

However, the data shows that the trend is pointing squarely towards renewable energy investment outpacing fossil fuels. Furthermore, it is important to remember that the proposed amendment is not curtailing all investment, merely that which circumvents the spirit of the original Act. We do not exist in a vacuum, and nor do our policies. The decisions we make here affect millions of people across the world. In amending the Fossil Fuel Divestment Act, we would ensure that its intended purpose is achieved and our approach to climate policies is cohesive. If we wish to keep the target of 1.5°C as realistically achievable, we need to phase out fossil fuels. The amendments needed in the Fossil Fuel Divestment Act are merely one step that we can take as legislators to do our part, but mark my words, this is the bare minimum we can do. What is required is a workable, considered roadmap on how governments can achieve this on a larger scale. The fossil fuel non-proliferation treaty provides a global plan for what is required to achieve an equitable phase-out of fossil fuels. The treaty will provide a working guide for governments to stop the expansion of fossil fuels, while also achieving true transition to renewable energy.

Deputy Michael McNamara

I thank my colleague Deputy Pringle for bringing forward this motion which I support, but with certain caveats or clarifications which I might seek. I very much support the spirit of the motion. There has been a lot of talk in Ireland about developing renewables. There has been a lot less action from the Government in actually developing renewables. We see that there has been an increase in onshore wind farms, but can the Government point to a single wind farm in this State where there is a community dividend other than paying for jerseys for the local GAA club? Paying for jerseys for the local GAA club is important but it tends to be a one-off measure. When there is a pledge to give a certain amount of money to a GAA club, it is a set amount. With inflation, etc., it will amount to very little in 20 years time. It is certainly a minuscule amount of money compared to what these wind farms can hope to generate. I say "generate" in terms of money and not in terms of energy because that is slightly less predictable.

If we are serious about moving forward, why has a framework not been put in place for an actual dividend for communities from community wind farms as opposed to sponsorship of a festival or stuff that is minuscule? The Minister of State might well argue that there is a dividend for the entire State. That may be the case, but there is a particular burden for a particular community that has had its environment degraded by the construction of a wind farm. There is an inevitable degradation of the environment if a wind farm is built in a blanket bog, for example, with the amount of concrete that will have to be used to stabilise the bog for the bases. Even if some places experience less environmental impact than others when wind farms are being built, there is no particular dividend for the community.

I have heard the Taoiseach describe offshore as the great "moonshot" of our generation, but our progress towards developing offshore wind generation has been painfully slow. Even now, OREDP II was initially expected to announce plans for floating offshore wind but it has not done so. There is now to be a phase 2 of the plan, although there is speculation in the industry that this might not even include floating offshore wind and we might have to move to phase 3 of the plan. In no way could the Government's actions be seen to match its hyperbole and talk about developing this.

We know that investors have come here and have gone to find support. They are very excited at the prospect of floating offshore wind generation in Ireland until they look at what is actually happening in the State towards developing that. When they look at where we are and how close we are to being able to act on that, they see that we are nowhere near it. When it comes to the mapping that will be required, MARA has been established but we do not know concretely who will carry out the mapping. That needs to be determined quickly. Some local authorities have some additional capacity and expertise that could be brought to bear on this. Everything needs to be utilised but I am not convinced the Government is doing this. I am convinced the investors who want to invest in clean renewable energy are shaking their heads, just as the Minister of State might yawn at my next point.

I understand that 40% of Denmark's gas requirements are met from biomethane through anaerobic digestion systems. The European Commission has pointed out that Ireland and Denmark are perhaps the countries with the greatest capacity to replace natural gas usage with biomethane. Denmark is now at 40%. Is Ireland at 0%? Perhaps the Minister of State might give me the exact figure. I would say it is an awful lot closer to 0% than to 40%. I would even say it is closer to 0% than it is to 1%. That is inexplicable. It is equally inexplicable that the Government failed to apply to a European Union fund to support this, notwithstanding the large numbers of potential investors, farmers' groups and co-operatives, etc., who want to move on this. There is no support from the Government, or the permanent government, for this. Instead we are burning fracked gas. A certain amount of gas that comes into Ireland and is distributed is fracked gas. How does that in any way match the Government's rhetoric? Can we say there has been progression? Next year, as those of us who wish to face the electorate do so, will we have made any progress on that? It is not clear to me that we will.

I completely support the transition from a climate, environmental and social justice perspective. Equally, from a geopolitical perspective, it makes sense that if we can generate energy ourselves we should do so but we do not seem to be moving in that direction.

The fossil fuel non-proliferation treaty is not something I know a lot about. It was brought about by Pacific island nations, having initially been proposed by them. We have some things in common with them. Like Pacific island nations, Ireland uses natural gas. They import large amounts of natural gas, primarily LPG. Ireland does the same. To announce a complete ban on the exploration and extraction of fossil fuels in Ireland, natural gas included, in circumstances where we are importing large quantities of natural gas as LPG with a far greater carbon footprint seems to make little sense because it is creating a greater carbon footprint. I also think that many people would be concerned about the amount of fracked gas which is advertently or inadvertently consumed in Ireland.

The Government's ban on any further exploration in Irish waters is fanciful in circumstances where we are importing LPG. The states that have endorsed the fossil fuel non-proliferation treaty include Colombia and Timor-Leste. Both are countries with substantial gas reserves. When I did some quick research this morning, I saw that both of their state gas companies have hailed recent discoveries of gas and have called for investment to exploit that. It seems that has not prevented Colombia and Timor-Leste from endorsing the treaty. Therefore, I am not clear what exactly the treaty calls for. I know the countries that have endorsed it continue to explore and extract natural gas in their own territorial waters. It is ultimately less harmful to the environment than importing it in large tankers because of the carbon footprint that entails.

However, that is the way we choose to go, perhaps because it matches the rhetoric. Perhaps it helps leaders of parties to get positions, to chair a COP meeting for a few hours and to get their ten minutes of fame. I do not know. I am sorry if that sounds cynical and jaded, but it is where our policies are and where investors are. They listen to the rhetoric of the Government and then discover that it is utterly unmatched by any actions.

The motion talks about "mechanised farming". I am not entirely sure what is meant by that. If it means every farmer with a tractor, I would have a problem with it, but I do not think that is what the motion means. I think it means the tendency towards ever-increasing farms and reductions in biodiversity. If farms are getting bigger and bigger and producing only one crop to the detriment of biodiversity, farmers are not choosing to do that; they are being forced to do so by an industry that is entirely unregulated. The Government's policy is for farms to increase rather than decrease. I thank the Chair for the time. I support the motion.

Minister of State at the Department of Finance (Deputy Jennifer Carroll MacNeill)

I thank Deputies Pringle, Connolly and Joan Collins for putting forward this motion and giving us an opportunity to talk about this matter.

I disagree with Deputy Pringle's comments that COP was a farce. I do not agree that it was. The progress overnight was really important. Eamon Ryan was one of the EU's lead negotiators and he has put enormous effort into two things in the past two weeks, the first of which was the early achievement of the loss and damage fund and the scale it was achieved at. It was one of Ireland's priorities for COP to try to support small island nations. The Deputy correctly identified those countries as not having contributed to the climate damage we are experiencing, but which face the burden. Ireland's contribution to the fund was €25 million straight away, which made us the second highest per capita contributor globally, with the UAE ahead of us. Events may have overtaken and bigger contributions may have been made on a per capita basis, but it is a strong statement by the Irish Government to be the second highest per capita contributor to something so significant, on which Ireland and Germany led the negotiations and which Eamon Ryan and the Government pushed in a really important way. It is a real delivery and it is not unique to the loss and damage fund.

As a Minister of State at the Department of Finance, when I was at COP for finance day on behalf of the Government, I was able to announce €12 million for the centre for emergency response flooding, which is led by the UN. That put us in the top ten contributors, not just on a per capita basis, but on an absolute basis, which is just another example of how much Ireland is committed to making sure this works. Eamon Ryan's work on behalf of the EU in the past two weeks has been really important. It is important that this agreement, which has been welcomed by environmentalist groups, genuinely links science and climate change for the first time - it should have happened years ago, but it happened this time - and genuinely names fossil fuels as the source of the difficulty. This is a big achievement by Eamon Ryan, not only on behalf of Ireland, but on behalf of the EU. It is a step change, so I do not agree it is a farce. We all want it to go further, but it is important, this morning of all mornings, to recognise the significant change.

It is important to recognise how the mobilisation of Irish capital and Irish taxpayers' money is being used to support the transition, especially by ISIF. At COP I highlighted this work internationally. For example, in 2017, ISIF took a 28% stake in a renewables company for €76 million of Irish taxpayers' money. In 2020, when we divested our stake down to 4%, that company was generating 528 MW of power through renewable sources. In 2023, three years later, that output was trebled, with 1,450 MW of renewable power being delivered across Denmark, the Netherlands, Finland, France, Germany, Spain, Portugal and Sweden, with €10.5 billion of assets that all originally came from seed capital of ISIF funding delivered across Europe. The company says it will be generating 400 GW of renewable energy across Europe by 2030, and I believe it. That shows the extraordinary multiplier effect of Irish capital being invested correctly by ISIF in projects that will really land, work and deliver.

The Government is not opposing the motion. I compliment Deputy Pringle and his colleagues on their earlier work on this in 2018. I was proud at COP to be able to say that Ireland was the first State to move away from investment of any kind in fossil fuels. The Fossil Fuel Divestment Act achieved that. At the time, we reached a compromise which enabled us to be the first country to do so while still enabling the type of investment by ISIF I described, which enables the fund to grow significantly to be able to mobilise Irish capital in significant ways.

There are a few difficulties with the motion on which we would like to find a compromise. We would like to make sure we can achieve something further where possible, without compromising the ability of ISIF to do the kind of work I described or to continue to grow Irish funds. Crucially, we must not compromise the ability of the Future Ireland Fund and the climate action fund to be able to invest in the ways we need them to.

I will not outline the Government's position on Climate Action and Low Carbon Development Act and our carbon budgets because Deputies are already more than familiar with it. We have a significant climate action plan. The update of that plan was published on 21 December 2022, setting out how we can accelerate the actions required to respond to the climate crisis.

I will focus on the motion. As Deputies will be aware, the 2018 Act requires ISIF to divest from companies engaged in exploration, extraction or refinement of fossil fuels, which includes coal, oil, peat, natural gas or any equivalents. A fossil fuel undertaking is defined as being in the business of "exploration for or extraction or refinement of a fossil fuel where such activity accounts for 20 per cent or more of the turnover of that undertaking...". In the case of a group, the 20% is defined by reference to the aggregate turnover of the group, based on the most recently published audited financial statements. The Act defines indirect investment as meaning:

... an investment of the assets of the Fund in an investment product or in a collective investment undertaking but does not include financial derivative instruments, exchange traded funds or hedge funds.

The NTMA, is required to:

... endeavour to ensure that the assets of the Fund are not directly invested in a fossil fuel undertaking ... unless it is satisfied on reasonable grounds that such indirect investment is unlikely to have in excess of 15 per cent of its assets, or such lower percentage as the Minister may prescribe ... invested in a fossil fuel undertaking.

If the Act was amended as proposed in the motion, to avoid being in breach of the relevant statutory provisions, ISIF would have to divest from and may be prevented from investing in substantial investments that may have minimal or no exposure to fossil fuel undertakings, and where exclusions would have no consequence to the issue of fossil fuel use. Deputies should be aware that the call to amend the Act by removing the exclusionary clause in section 49A(1) regarding financial derivative instruments, exchange traded funds or hedge funds would also significantly limit ISIF's investment universe and its ability to deliver on its commercial mandate, which is important. As I said, crucially it would have the potential to reduce the investment horizon for the proposed Future Ireland Fund and the Infrastructure, Climate and Nature Fund.

ISIF has developed a list of 243 fossil fuel undertakings in which it will not invest, having regard to the criteria in the 2018 Act. The list is updated on a semi-annual basis and is available on the ISIF website. There is no need for regular review of the legislation. It is already happening and is available for Deputies to see.

The motion suggests going beyond the current definition of fossil fuel undertakings to include fossil fuel utilisation, which according to the motion:

... should be defined in a manner that targets economic entities that fall within an agreed bracket so as to strike a balance that allows for meaningful climate policy while acknowledging any existing barriers within the renewable infrastructure ...

It is unclear what that means in a legislative context.

As I said, this is a matter on which we are aligned in principle. We would like to find workable compromises that continue Ireland's leadership on this point, while not hamstringing the very investment vehicles that enable us to deliver projects such as the renewables one I mentioned and to develop the Irish sovereign wealth position to be able to invest in a range of different projects, crucially including climate infrastructure. It should be appreciated that ISIF is a responsible investor and its overarching approach to sustainability and responsible investment includes ensuring the whole portfolio, third-party managers and investee companies consider potential climate risks and opportunities, as appropriate, as part of ISIF's decision-making and portfolio management. ISIF seeks to engage with like-minded investors and organisations that share its ambition to deliver on ESG priorities. ISIF is a founding signatory of the principles of responsible investment; a supporter of CDP, formerly the carbon disclosure project, and Climate Action 100+; and an endorser of the One Planet Sovereign Wealth Funds initiative and the Santiago principles.

We would argue that the ISIF is already a responsible investor, investing in the sorts of projects we want to see delivered in respect of renewables not just for Ireland but also for Europe.

More broadly, on the Government's position on developing onshore and offshore wind and solar projects, I would say in response to Deputy McNamara that we are already a leader in onshore renewables. The strategy was to deliver quickly for the consumer and to deliver renewables as quickly as possible. Obviously, from a commercial perspective, it was easier to develop onshore than offshore. I assure the House that my commitment, as a Deputy in Dún Laoghaire and as a member of the Government for whatever period I am, is definitely to deliver on offshore opportunities. There is a windfarm proposal near my constituency and that of the Minister of State, Deputy Ossian Smyth. I will speak for him when I say we are firmly behind that project, as we are behind other projects that will deliver on the opportunity to make Ireland a genuinely energy-independent and sustainable state. It will put us in a completely different position not only in terms of our output in energy and fossil fuels but also in terms of our macroeconomic security and independence. There is a considerable opportunity here and one of the basic reasons to be in and to remain in politics is to deliver on that opportunity alone. I assure the House of my commitment and that of the Government.

Deputy Joan Collins

I welcome the fact that the Government is accepting this motion in principle. I would like to hear a reply from the Minister of State on whether the Government will amend the Fossil Fuel (Amendment) Act 2018 in a manner that will widen its reach so it is applicable to all funds within the ISIF by means of the removal of the exclusionary clause within section 49A(1) regarding financial derivatives and instruments, exchange traded funds or hedge funds. That is an important part of this motion and I want clarification on that point from the Minister of State, if possible.

I disagree with the Minister of State. The COP28 summit disintegrated into farce. It is clear that the world's response to climate breakdown has so far involved more fossil fuel executives than common sense. We are facing an existential crisis while world leaders shake hands with the people who have made billions from destroying our planet.

The Minister of State made the point that Ireland has given €25 million to the loss and damage fund but that contribution was taken from moneys already allocated to climate aid. According to the IMF, fossil fuel companies globally received $7 trillion in subsidies and state aid in 2022 alone. We are not fighting climate change; we are funding it.

The deal agreed today is a failure to tackle the real issues behind climate change, one of which is an economic model that is wedded to fossil fuels and run, top to bottom, by those with a vested interest in squeezing as much profit out of our carbon-based economy as they can, no matter the cost. Ms Anne Rasmussen, head negotiator for the Alliance of Small Island States, summed it up when she said:

We have made an incremental advancement over business as usual when what we really needed is an exponential step change in our actions and support.

Weak language on contributing to a transition from fossil fuels will not end climate breakdown. What we have seen in recent days is the surrender of our hopes of achieving the 1.5°C limit by 2030 to billionaires and giant fossil fuel companies. It has shown one thing more than anything else, which is that the people with the real power on this planet are the same people who are destroying it. This is a climate crisis but more than that, it is a crisis of capitalism. We are eating ourselves as our economic system demands more growth and profit in the face of a planet that has already reached its limits. Capitalism cannot function without destroying the planet and we cannot save the planet with capitalism.

This motion on the amendment of the Fossil Fuel Divestment Act 2018 is a good step towards a goal. Our State's investment should not be driven by profit but by what is good for our people and our planet. Investing in fossil fuels when they cause 75% of greenhouse gas emissions is not good for anyone. We must move our State's function away from engaging in a market that is destroying the planet and shift the focus from profit to sustainability and development. If initiatives such as COP28 cannot move fast enough, we must move faster. Measures such as this motion help to end the financing of the use and extraction of fossil fuels. We need to take such steps now to ensure the future of the planet. Why are we putting resources into climate mitigation only to be financing the cause of climate breakdown at the same time? This motion tightens the loopholes in investment, most notably on derivatives, to ensure we are not doing that.

We need an immediate commitment to the phasing out of fossil fuels with concrete plans for how to do it. UN Secretary General António Guterres said last week that the 1.5°C limit is only possible if we ultimately stop burning all fossil fuels - not reduce or abate the use of fossil fuels, but phase out their use over a clear timeframe aligned with the 1.5°C limit. We need to support the fossil fuel non-proliferation treaty, which will provide the roadmap needed to manage an equitable transition from fossil fuels to clean and abundant renewable energy. This is a global crisis and we need a global response. A treaty would provide that in the most fair and equitable way. The Government should be leading on this issue and not running from it.

This is a crisis, but it is also a chance to build a better society that looks after all and a humane economy that respects the planet's boundaries and the needs of every person. We need climate justice to ensure we build a world which respects the boundaries of the planet and the need to have a decent standard of living for all. We must also ensure that those who have made billions from destroying the planet pay to save it.

Deputy Marian Harkin

I thank Deputy Pringle for bringing forward this motion. The principle on which this motion is based, which is increased fossil fuel divestment, is certainly one I fully support. While, unfortunately, the final document from COP28 falls far short of calling for the phasing out of fossil fuels, it does call for an irreversible and accelerated transition from fossil fuels. At a global level, that is positive.

This motion is not just worthy but is also timely. It is a follow-on from a Private Members' motion put forward by Deputy Pringle in 2016, which became the 2018 Act. That Act had the impact of Ireland becoming a global leader in the context of divesting public money from fossil fuel resources and assets. Deputy Pringle is to be congratulated for his work in this area. However, the motion proposes that we need to move further and to close some of the loopholes that still allow investment in fossil fuel use.

The 2018 Act was principally concerned with fossil fuel exploration, and its impact has been positive. We can see that because, according to the motion, in January 2023 "Irish financial institutions held US$13.2 million in bonds and shares attributable to fossil fuels in the Global South, of this the ISIF held US$11.2 million, mostly in bonds issued by Chinese electric utility company State Grid Corporation of China", as well as over $12 million "in bonds and shares attributable to agribusiness in the Global South". We can see that despite the good intent of the Bill, there were certainly loopholes that were being exploited.

The 2023 Action Aid report proposed that the Government would consider the scope of the 2018 Act and that the Act would be amended to go beyond divestment in fossil fuel undertakings and include divestment in fossil fuel use. This, of course, is the more difficult part because we all use fossil fuels. The question is how far we go. Many businesses and companies depend, to different degrees, on the use of fossil fuels. Sectors such as transport, industry, agriculture, international tourism and food imports and exports have such a dependence so we must be careful as to what we include in the scope of this proposal. Deputy Pringle is including agribusiness and agrichemical companies. "Agribusiness" is a general term and a paragraph in the motion fully describes "industrial agriculture".

Included in this definition are the phrases "mechanised farming" and "commodity crops destined for export". This is open to some interpretation and would need to be refined. I would also note that corporations that control and profit from almost every step of the process are called agribusinesses. I have no issue with that at all but equally, there are small and large corporations. Are they all included? Could that, for example, include Tirlán, the Kerry Group or Lakeland Dairies? Is the definition driven by who makes the profit, by the negative impacts of the industry in terms of fossil fuel usage or by the greenhouse gas emissions from the business or agribusiness? This is an important distinction. The issue of who makes the real profits in the agrifood chain is a massively important one but this is not the place to deal with it. It certainly does need to be dealt with but not here. We need to concentrate on the negative impacts of the industry in terms of fossil fuel usage and also in the context of the greenhouse gas emissions from whatever business is concerned.

All of these matters have to be teased out and the scope of any proposed Bill has to be made clearer. However, as I said at the beginning, the principle on which this proposal is based is a sound one and I am happy to support it.

Debate adjourned.

Dáil Éireann debate - Wednesday, 13 Dec 2023