Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

I thank the Chair and Deputies. I also acknowledge and thank Deputy Pringle for the Act in 2018 and the work done on this, and for tabling this motion to discuss how we can further improve on it.

I also think today is a historic day. We have news this morning about work done by a group of Irish officials - civil servants who worked night and day in Dubai - to reach a deal to limit climate change. Our Minister for energy, Deputy Ryan, was appointed an EU lead negotiator and so Ireland was represented on a global stage in Dubai. We should acknowledge that. Last year, Deputy Ryan was in a similar position. He was lead negotiator for the EU on climate finance. That was when we agreed the loss and damage provisions, which were significant. This year the focus changed towards fossil fuels. It is incredible that this is the first of the climate agreements over 30 years to point to fossil fuels as the cause of the problem, and to mandate that the world should move towards transitioning away from or phasing out fossil fuels. Ireland did not just work with the EU. It also negotiated closely with small island states to push for the double ambition of reducing emissions as well as obtaining and securing climate justice. I say today that the Paris Agreement is stronger today than it was yesterday.

It is easy to be cynical and look at these global agreements, to ask why bother, and to say it is just people talking and coming together. There is no way we can do this without coming together. There is no way we can achieve any progress on climate change without all of the countries working together. They are coming from 190 different positions and it is difficult to get agreement, but it is working. We know it is working because if you look at investments in the global electricity system over the past year, 90% of money now being invested around the world is going into clean energy. That means investment of $2 billion per day. The whole financial system has moved away and identified that investing in fossil fuels is a risk. Progress is being made. It is easy to be cynical and say this is all pointless. A turning point was reached in 2014 when climate finance went mainstream. In 2014 the then governor of the Bank of England, Mark Carney, gave a famous speech in which he said that the majority of fossil fuel reserves on the books of the global energy companies were unburnable if we were going to avoid catastrophic climate change. He said that the assets on the books of these large energy companies were effectively stranded assets, and that the companies were mispriced. This led to a huge change in the financial markets, reorienting investment away from fossil fuels. I want people to know that these negotiations, COPs and climate change conferences have an effect. They are significant and worth doing, even though it is dispiriting dealing with countries that have no interest in achieving progress.

I have listened carefully to the contributions of different TDs. In her opening remarks, the Minister of State, Deputy Carroll MacNeill, highlighted that the Government understands and supports the motivation behind this motion. As might have been expected, this motion has prompted a wide range of discussion about fossil fuel divestment. ISIF has a proven record as a responsible investor. It has been highlighted that ISIF has already divested voluntarily from investing in tobacco companies and in companies that manufacture nuclear armaments. Under legislation, it has also divested from companies involved in the production of cluster munitions and anti-personnel mines. These form part of its sustainable and responsible investment strategy. ISIF is a responsible investor. Its S&RIS document on its overarching approach to sustainability and responsible investment states:

The S&RIS is focused on ensuring that the whole portfolio ... third party managers, and investee companies are considering potential [climate] risks and opportunities ... as appropriate and that [such risks are] appropriately captured as a part of ISIF’s decision-making and portfolio management ... ISIF seeks to engage with [like-minded] investors and organisations that share the Fund’s ambition to deliver on ESG priorities.

With regard to future investments by ISIF, the enactment of the proposed amendment could have the effect of significantly restricting ISIF's investment universe, in particular with regard to globally focused funds in which ISIF may wish to make an investment. It is additionally important to stress that the removal of the derivative ETF hedge fund exclusion would significantly and negatively impact on the ability of ISIF, and perhaps more so other envisaged funds, to deliver on the relevant mandate. The NTMA, in particular, would not have sight through to many of the underlying investments in collective pooled investments and derivatives. There is a restriction that only up to 15% of its assets can be invested in fossil fuel activities, and 20% in respect of companies or holding companies. These restrictions ensure there is a limited engagement in fossil fuel. However, it also allows ISIF some room to perform its commercial mandate. ISIF has developed a list of 243 fossil fuel undertakings in which it will not invest, having regard to the criteria in the Act. This list is updated on a semi-annual basis and is available on ISIF's website.

The Government's commitment to taking action on climate change is well established and demonstrated through legislation such as the Climate Action and Low Carbon Development (Amendment) Act, which was enacted in July 2021 and significantly strengthened the statutory framework for climate governance in Ireland. The 2021 Act binds Ireland to reducing its greenhouse gas emissions by 51% by 2030, relative to 2018 levels, and to achieving net zero emissions by 2050. The new framework, set out in the 2021 Act, requires the delivery of successive climate action plans and long-term climate strategies supported by a system of carbon budgeting and sectoral emissions ceilings to meet our 2030 and 2050 targets.

Ireland has committed to an early and complete phasing out of coal- and peat-fired electricity generation and has ceased issuing new licences for oil and gas exploration. In fact, we also ceased issuing new licences for coal exploration since the House passed the Circular Economy and Miscellaneous Provisions Act last summer. Ireland recognises that its energy future lies with broad deployment of renewable energy and has committed to increasing the share of renewable electricity in Ireland up to 80% by 2030 and to allocating 15.5 GW of wind and solar capacity from renewables by 2030. To that end, Ireland has been an active member of the Global Offshore Wind Alliance since COP27. International collaboration is key to achieving the widespread transformative change needed to tackle climate change, rather than specific domestic measures as suggested by this motion.

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