Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank Senator Higgins for tabling this amendment relating to the investment policy of the infrastructure, climate and nature fund. As was discussed on Committee Stage, it is important that there is a clear investment objective for the fund. This view is based on the experience of the Ireland Strategic Investment Fund , ISIF, and taking account of the approaches taken by other funds in other jurisdictions. The investment policy for both funds will be to hold or invest the assets of the funds on a commercial basis for the benefit of the funds so as to seek the optimal total financial return as both capital and income. The policy intention is to establish a financial asset for the State to deal with future liabilities. Thus, the agency's mandate is to achieve a commercial return. The intention here is to build up the maximum financial return from the fund so that this fund is the maximum amount available to deal with climate change and the designated water and nature restoration issues.For the infrastructure, climate and nature fund, the investment horizon is to be shorter, as the fund will disburse €3.15 billion over the period 2026 to 2030 in respect of climate and nature projects.

As regards the detail of the proposed amendments, a reference to "commercially, socially and environmentally sustainable" would make it difficult for the NTMA to determine the types of investments for both funds. In any event, both of the funds, and ISIF, will be subject to environmental, social and governance, ESG, requirements as part of the investment policy and strategy for each fund. The requirement to consider ESG risks as part of the whole investment process of the NTMA is an effective way to ensure those factors receive due prominence, building on the work done to date by the NTMA to be a responsible investor when it comes to ESG matters.

Given the importance of the funds being able to operate effectively and to align with the existing ISIF fund, I do not propose to accept this amendment.