Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

The NPRF's objective is to get the maximum return. The ISIF fund is different. It has different criteria to meet. The funds coming from those external global funds and shares or stocks or wherever they are invested will be divested over a period as required, and there is a requirement in the State for a commercial return to have an economic impact. It is equally important that areas in the State that current market structures are not prepared to fund are funded. When the ISIF was established, I was on the committee with other members and we were not sure whether it would be as good as what we hoped, but it has proven to be. It has made much significant investment in Ireland at a time when funding was not otherwise available. The point is there is €131 million to come in. There is €288 million in funds in indirect investment. The term indirect investment creates a real concern. ISIF has invested in BlueBay and Carlyle, which fund Irish companies. By any reading of the Bill, these companies would be excluded if they had any direct or indirect attachment to the fossil fuels industry.

The €35 million that ISIF has in the SBCI, which provides funding to small and medium enterprises, could also, by the reading of the Bill, exclude those small and medium enterprises from receiving funding because of the legislation. It could be the consequence. As I said earlier, we just do not think this is the correct method to deal with it. An enormous quantity of work would have to be done to try to see exactly where is the €1 billion in indirect investment. It is a calculation. There is also the impact it could have on plastics. I am sure there are other areas in which companies could be under pressure.

Earlier I spoke to a geophysical surveying company. It has 12 high-end high-value staff in rural Ireland. These are the types of jobs we are trying to keep throughout the country. The managing director told me very clearly he does not have anything to do with the fossil fuel industry, but a geophysical surveying company could be caught under the Bill. The SBCI does not offer cheap loans. It offers loans at market rates. A company needing this support could be excluded, and it could cost, for example, 12 jobs at a point when we do not think it is quite necessary.

The ISIF and NPRF are divesting from companies not making an attempt to go down a low carbon route. It would be better if they are allowed to do this in a more co-ordinated way over a five year period. The ISIF is clearly one of the more capable funds. I am not sure whether the actions the ISIF takes to address climate change risk have been discussed. It is a long-time signatory of the principles for responsible investment. It is the only Irish asset owner which has been a signatory for more than ten years. The fund is a long-time carbon disclosure project supporter, and has actively supported the global and Irish network asking companies to disclose their carbon footprint. The fund operates a sustainable and responsible investment policy, which was published in July 2016. It is specifically focused on climate change and the steps being taken to address risk in the portfolio. At present, it is tendering for additional services in this respect. The fund is aware of risks posed by stranded assets as the world transitions to low-carbon solutions, and is committed to doing a case by case analysis of all its energy holdings to assess the sustainability and, ultimately, the investment case for these companies on an individual basis. This process is under way in those companies, and a long-term solution will need long-term financing. Divestment on a very limited basis may be appropriate. The ISIF is already doing a lot. The structure is in place to do this over a five year period. I do not believe the Bill is the best method by which to continue. We believe there could be unintended consequences that would have a cost for the small and medium enterprise sector.