Dáil Éireann Debate, Tuesday - 17 May 2016
173. Deputy Róisín Shortall asked the Minister for Finance the companies that the Ireland Strategic Investment Fund has invested in which are involved in fossil fuel extraction or burning; the amount the fund has invested; and the return on this investment by year. [9398/16]
View answerThe Ireland Strategic Investment Fund's investment holdings in fossil fuel companies are among the legacy global investments inherited from its predecessor fund, the National Pensions Reserve Fund (NPRF). In keeping with the Fund's mandate to hold or invest its assets (other than directed investments) on a commercial basis in a manner to support economic activity and employment in Ireland, these legacy investments are being sold by the Ireland Strategic Investment Fund over time to fund Irish investment commitments as they arise.
The Fund has reduced its overall equity exposure from approximately 25% at end 2014 to approximately 11% at end 2015. Furthermore, this allocation is expected to be continuously reduced as the Fund deploys its capital.
The Fund's divestment approach is phased with a view to protecting the taxpayer from unnecessary losses. This is in alignment with the Fund's double bottom line mandate of investment (i) on a commercial basis and (ii) in a manner to support economic activity and employment in Ireland.
In the absence of a globally accepted definition and list of companies "involved in fossil fuel extraction or burning", a company by company analysis of the Fund's 2,500 listed equity holdings would be necessary to determine the full exposure. However, a preliminary and unaudited value of the Fund's investment in the Oil, Gas and Consumable Fuels industry group, as defined by the leading equity index provided by MSCI Inc, is €79m, representing 1% of the Fund's investments as of 31 December 2015.
The Oil, Gas and Consumable Fuels industry group represents approximately 6% of the overall equity market and has generated a return of approximately 13% in the first 4 months of 2016 and an annualised return of -3% since December 2010.
|
|
MSCI world oil, gas and consumable fuels index performance |
MSCI world index performance |
|
2016 Jan - April |
+13% |
+0% |
|
2015 |
-25% |
-3% |
|
2014 |
-12% |
+3% |
|
2013 |
+15% |
+24% |
|
2012 |
-1% |
+13% |
|
2011 |
+0% |
-8% |
|
Annualised since 31/12/2010 |
-3% |
+5% |
The first investment strategy of the Ireland Strategic Investment Fund, which was published in July 2015, is publicly available. It sets out the long-term strategic direction for the fund, and outlines that the "Energy (allocation) will include a significant element of renewable energy investments". Importantly, the Fund commits to operating to the highest global standards, investing in line with both the Principles for Responsible Investment (PRI), of which it was a founding signatory, incorporating environmental, social and governance factors into its investment decision making, and the Santiago Principles, which are the globally accepted best practice principles for sovereign funds.
The most recently available full breakdown of investments is available in the 2014 NTMA annual report.
A full list of investments will be available in the 2015 annual report which is expected to be published in July.
