Ireland seeks fossil fuel divestment for €8bn SWF
Ireland’s parliament has voted in favour of a bill forcing its sovereign wealth fund to divest from fossil fuel companies.
On 26 January, the Daíl Éireann voted 90 to 53 to reject an amendment to the Fossil Fuel Divestment Bill 2016 that would have negated its primary objective, to reduce the €8bn Irish Strategic Investment Fund’s (ISIF) exposure to carbon-heavy companies.
The bill instructs the National Treasury Management Agency (NTMA), which is responsible for the ISIF, to sell its holdings in fossil fuel companies “direct or indirect” within five years.
Thomas Pringle, an independent politician who tabled the Fossil Fuel Divestment Bill, introduced the debate earlier this month with a strongly worded condemnation of the new US government’s stance on climate change.
Speaking a day before US president Donald Trump’s inauguration, Pringle said: “We should not associate ourselves with Trump-era politics. His administration and its public display of affection for big oil is representative of the industry’s fading legacy and its last attempt to hold onto power.”
He accused the oil industry of “buying political influence and deliberately concealing and manipulating the science of climate change” for more than a century.
Divesting the ISIF from fossil fuels will help Ireland meet its emission reduction promises under last year’s Paris agreement on climate change, Pringle said.
“Today offers an opportunity for us not only to catch up with the pace of climate change, but also lead on mitigating its effects,” he added.
Earlier in discussions about the bill, Pringle claimed the ISIF lost €22m in 2015 due to the volatility of commodity prices, and “€100m in total over the past three years”.
The amendment to Pringle’s bill was tabled by Simon Coveney, minister of state for the Department of Housing, Planning, Community, and Local Government.
It argued that ISIF’s fossil fuel exposure was “limited”, and that it had already allocated €800m to energy – “the vast majority of which will be invested in renewables”.
The ISIF’s current portfolio includes investments in a “waste to energy” project, an onshore windfarm, and forestry.
Coveney further argued that, “because of its progressive record in these matters, ISIF’s investment options do not need to be underpinned in statute”.
However, following last week’s vote the bill will now be assessed by the Irish parliament’s committee on finance, public expenditure, and reform.
A spokesman for the ISIF said its holdings in fossil fuel companies included legacy assets purchased by its predecessor fund, the National Pensions Reserve Fund.
“Such legacy investments are being sold off on a phased basis in line with ISIF’s new mandate to invest on a commercial basis to support economic activity and employment in Ireland,” the spokesman said.
“The fund is committed to investing in the energy sector in a manner that is consistent with the state’s commitment to make the transition to a low carbon, climate resilient and sustainable economy,” he added.