Dáil Éireann Debate, Wednesday - 7 December 2016
92. Deputy Róisín Shortall asked the Minister for Finance his plans regarding the issue of fossil fuel divestment; if this divestment will be included in the Irish Strategic Investment Fund strategy; and if he will make a statement on the matter. [39135/16]
View answerI refer the Deputy to my replies to recent Parliamentary Questions on this matter, specifically Question No. 3 of 12 October 2016 from Deputy Thomas Pringle, Question No. 49 of 10 November from Deputy Tommy Broughan, Question No. 184 of 18 October from Deputy Clare Daly, as well as Question No. 78 of 20 October from Deputy Shorthall. I am informed by the Ireland Strategic Investment Fund (ISIF) that its shareholdings with fossil fuel exposure includes certain investments inherited from its predecessor the National Pension Reserve Fund (NPRF).
These shareholdings are in companies based outside Ireland and, as such, are held in ISIF's global portfolio. The global portfolio has been restructured and is being sold over time to fund Irish investment commitments as they arise, in keeping with ISIF's mandate to invest, on a commercial basis to support economic activity and employment, in Ireland. Based on portfolio holdings as of 30th Sept 2016, ISIF's equity holding in the energy sector amounted to circa €11m (0.1% of ISIF's assets under management).
Such investments should be considered in the context of ISIF's Irish portfolio and its significant commitment to renewables. ISIF's investment strategy is aligned with Government policy and the State's commitment to make the transition to a low carbon, climate resilient and sustainable economy. ISIF published its Sustainability and Responsible Investment Policy in July 2016 and this emphasises climate change as part of the integration of Environmental, Social and Governance (ESG) into its investment decision making.
Many major funds internationally have made significant divestments from fossil fuels such as coal, while other such funds have adopted an approach of engagement with energy companies to establish their strategy and positioning for the transition to a low carbon economy. ISIF continually reviews its carbon exposure and the investment case for companies that may not be aligned with the long term transition to a low-carbon economy.
In that context, ISIF is currently considering the investment case for companies that may not be aligned with the long term transition to a low-carbon economy. ISIF's senior management and the NTMA Board's Investment Committee have committed to reviewing the current Prohibited Securities policy to examine the potential of adding to the list of excluded investment categories. This process is taking place in parallel with the ISIF Investment Strategy Review and is expected to be completed by end Q1 2017.
The National Treasury Management Agency (Amendment) Act 2014, which established ISIF on a statutory basis, provides that ISIF shall review its investment strategy after 18 months of operation. It also provides that in reviewing its investment strategy ISIF shall consult with the Minister for Finance and the Minister for Public Expenditure and Reform. I am advised by ISIF that this review will be completed in the near future.
