Dáil Éireann Debate, Wednesday - 20 July 2016
107. Deputy Thomas P. Broughan asked the Minister for Finance to report to Dáil Éireann on the investments of the Ireland Strategic Investment Fund in fossil fuels; the consideration he has given to divestment in this regard; and if he will make a statement on the matter. [23257/16]
Amharc ar fhreagraThe Ireland Strategic Investment Fund (ISIF) informs me that its current investment holdings in fossil fuel companies are among legacy global investments from its predecessor the National Pensions Reserve Fund. In the absence of a globally accepted definition and list of fossil fuel companies, a company-by-company analysis of the Fund's entire holdings would be necessary to determine the full exposure. 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, indicates exposure currently of approximately €50 million via both equity and fixed income investments. This figure has reduced substantially over 2014 and 2015 as global investments are being gradually sold to finance investments in Ireland, as they materialise.
These legacy investments in fossil fuel companies should be considered in the context of ISIF's Irish portfolio and its significant commitment to renewables. The ISIF investment strategy states that the Fund's energy allocation of €800 million will include a significant element of renewables investment, and in that light the Fund is committed to investing in the energy sector is a manner that is consistent with the State's commitment to make the transition to a low carbon, climate resilient and sustainable economy.
To date the Fund's investment commitments in this regard include:
- €44 million for the €500 million Dublin Waste to Energy project.
- €35 million commitment to NTR's onshore wind fund.
- Investment in the Bluebay SME credit fund which has made loans to Gaelectric and Mainstream, Irish headquartered renewable energy developers.
- Being a cornerstone investor in the Irish Infrastructure Fund (IIF) which holds a number of Irish onshore wind assets, forestry, and a designer/manufacturer of high power density high efficiency power supplies.
As part of its on-going commitment to operating to high international standards the ISIF has recently published its Sustainability and Responsible Investment Policy which is available online: http://www.isif.ie/wp-content/uploads/2016/07/SustainabilityandResponsibleInvestingPolicyJuly2016.pdf.
The Policy emphasises climate change as part of the integration of Environmental, Social and Governance (ESG) into its investment decision making.
As a responsible investor the ISIF monitors the issue of fossil fuel divestment across both its Global and Irish portfolios and is focussed on both Ireland's commitments under COP21 and national decarbonisation and energy security objectives for the Irish economy, which currently remains very highly reliant on imported fossil fuel.
The National Treasury Management Agency (Amendment) Act 2014, which established the ISIF on a statutory basis provides that the ISIF shall review its investment strategy after 18 months of operation and that in reviewing its investment strategy shall consult with the Minister for Finance and the Minister for Public Expenditure and Reform, and that the Minister for Finance may consult with other Government Ministers, as appropriate. This review will be conducted in the second half of 2016 and the issue of Fossil Fuel divestment may be considered as part of this process. However, to date, any exclusions from the ISIF on the basis of non-financial considerations are those mandated by legislation. In this regard the only relevant legislation impacting on the ISIF's investments is the Cluster Munitions and Anti-Personnel Mines Act 2008.
