Alice-Mary Higgins (Independent) | Oireachtas source

I am looking at the two pages to which the Minister referred. There are approximately four lines that relate to any of the ethical issues I have outlined. There is a section in which we can choose to set out clear investment criteria and rules, which supposedly will apply. We are hearing a contradictory argument from the Minister. On the one hand, she is saying this is none of our business because it involves private money and that money does what it likes. On the other hand, she is saying there are loads of controls in the Bill. The Minister is making contradictory arguments.

If investment rules are being set out in this section, why will she not include provision for the ethical issues I have highlighted in this group of amendments? Most of what is set out in these two or three pages does not relate to ethics. There is reference to insurance policies and how to invest in them. There is provision for diversification and regarding the liquidity and profitability of portfolios. Then there is the reference to an obligation to "take into account the potential long-term impact of investment decisions on environmental, social and governance factors". That is it. We are missing the opportunity to set out, for example, that not investing in arms and fossil fuels is a key environmental, social and governance factor. The opportunity is there to set out some of the environmental, social and governance factors with which there should be compliance. We are not even asking for such compliance. There is simply a reference to environmental, social and governance factors, which can be interpreted however.

Section 75 goes a little further into environmental, social and governance factors. It requires an investment management provider to "make provision in its risk management system to take account of risks arising from" those factors. The section further states that providers shall, from time to time, produce statements describing how considerations of environmental, social and governance factors have affected their investment decisions. Subsection (3), which might be what the Minister referenced, requires that an investment manager shall make provision for "the obligations of the State under international agreements on environmental sustainability and climate change to be taken into account". That is weak language. It is not compliance language. It is not consistent with the Paris Agreement. Indeed, the Paris Agreement is not named. There is simply a reference to taking account of international agreements on environmental sustainability and climate change. If the Minister is able to include a provision that the obligations of the State in this regard must be taken into account by investment managers when carrying out a contract, why can she not include something that requires compliance with, or even just takes into account, the fossil fuel divestment legislation or the cluster munitions legislation?

The State's obligations in regard to environmental sustainability and climate change are referenced in this section but the Minister keeps saying the investments we are discussing are nothing to do with those obligations and the State's laws do not apply because this is private money. However, section 75 states that account must, in fact, be taken of the State's obligations. There is a contradiction here. On the one hand, we have very weak measures regarding international agreements on environmental, social and governance responsibilities, which are meant to reassure us. On the other hand, we are being told there are, in effect, no obligations in this regard on providers because the obligations on the State do not apply to them. That is a contradiction.

The regulation provided for is weak and we are hearing an argument for no regulation. If it is the case that we can insert investment rules and requirements - there are two and a half pages on that in the Bill, as the Minister said - why do those rules not include really basic requirements like there being no investment in arms manufacturing, which has been a policy of the State for years under the cluster munitions legislation? Such provision needs to be included and it must be clear. It should not just require no investment in cluster munitions but that we must not invest directly or indirectly in munitions. If that is the policy, why would it not be reflected in the Bill? We have very weak language on the climate aspect and there is nothing on the arms issue.

This is a cause of concern to me. One of the big growth areas for investments right now, across the world, is the arms industry. If people want to make a lot of money really quickly, they put it into arms. The industry is booming. This is not an abstract, ye-olde-style, peacenik measure. It is a matter of genuine jeopardy for the State. Arms manufacturers' profits are booming. Germany saw a tenfold increase in its arms sales last year, from €33 million to €330 million, to Israel alone. My concern is that there is potential under these provisions for investment in some of those companies. Will that be captured under the ESG measures? The current provision refers to taking into account environmental, social and governance measures. That is all it says. The requirement is left to be interpreted by the individual investment providers. We have the opportunity, if we so choose, to give stronger direction in sections 74 and 75. I would like the Minister to comment on that.