Ireland Strategic Investment Fund divests interests in global fossil fuel companies
The Ireland Strategic Investment Fund (ISIF) has completed a divestment worth EUR 68 million from 38 companies involved in oil, gas and other fossil fuels following the signing into law of the Fossil Fuel Divestment Act 2018 on December 17, 2018.
According to a statement, the Ireland Strategic Investment Fund’s (ISIF) sale of interests in global fossil fuel companies puts Ireland among first in the world to divest investments in the fossil fuel industry sector.
The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, and Minister of State at the Department of Finance, Michael D’Arcy TD, have welcomed the Ireland Strategic Investment Fund (ISIF) announcement of its divestment from 38 global fossil fuel companies. The total value of the divestment is EUR 68 million.
Speaking following the announcement, Minister Donohoe said that the passing of this legislation marks Ireland out as “one of the first countries in the world to withdraw public money from investment in fossil fuels. It positions the ISIF as one of a handful of sovereign wealth funds globally to implement a fossil fuel divestment strategy”.
The divestment follows the enactment of the Fossil Fuel Divestment Act 2018 which was signed into law by the President of Ireland Michael D. Higgins on December 17, 2018. The passage of the Act through the Oireachtas (Irish parliament) was actively supported by both Ministers Donohoe and D’Arcy.
This is an important step on Ireland’s journey to making a successful transition to a low-carbon economy and signals the importance we attach to taking action on climate change. I commend all involved in bringing this initiative to fruition and for showing leadership on such an important issue, said Minister D’Arcy
The Act provides for the divestment of ISIF from fossil fuel undertakings – companies that derive more than 20 percent of their revenues from the exploration, extraction and/or refinement of fossil fuels – within a “practicable’’ timeframe. The announcement on January 4, 2019, means that ISIF has completely divested from all fossil fuel investments within the meaning of the Act.
Exiting our fossil fuel investments builds on ISIF’s existing investment exclusionary strategy in respect of coal production and processing, tobacco manufacturing, and cluster munitions and anti-personnel mines’. We were pleased to play a constructive role in assisting the Oireachtas during the legislative process and we have moved quickly to divest from fossil fuels following the enactment of the legislation. ISIF is a strong supporter of investments that will help Ireland’s transition to a low-carbon economy and we will continue to support renewable energy investments and low-carbon initiatives that are consistent with our mandate, said Eugene O’Callaghan, ISIF Director.
Transition to Irish climate change portfolio
In anticipation of the Fossil Fuel Divestment Act and in line with ISIF’s existing Sustainability and Responsible Investment Strategy, ISIF has developed an initial list of 148 fossil fuel companies in which ISIF will not invest.
The list, which been published on ISIF’s website, will be “actively monitored and reviewed. ISIF’s current portfolio included investments in 38 companies on this list and these have now been divested.
ISIF has also begun the process of measuring the carbon footprint of its investment portfolio as part of a wider approach to identify, manage and mitigate climate risk across its portfolio. ISIF’s global equity and corporate bond portfolio outperform the global benchmarks for carbon dioxide (CO2) emissions, and the carbon emissions associated with the ISIF’s investment portfolio are expected to decline substantially further following the announcement.
As part of his recent strategy review, Minister Donohoe has asked ISIF to focus its investments in Ireland on priority themes, one of which is investments or projects to address climate change.
Separately, as part of its transition from a predominately global portfolio into an Irish portfolio, ISIF is investing in Ireland to support the achievement of Ireland’s national carbon transition objectives and the implementation of the State’s climate change obligations. ISIF’s current Irish investments include a range of wind farms, solar power, and other renewable energy projects.
The Ireland Strategic Investment Fund (ISIF), managed and controlled by the National Treasury Management Agency (NTMA), is a sovereign development fund with a unique statutory mandate to invest on a commercial basis in a manner designed to support economic activity and employment in Ireland.
The fund’s predecessor was the National Pensions Reserve Fund (NPRF). It has a current fund size of EUR 8.9 billion.