Pat Rabbitte (Dublin South West, Labour)
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Question 91: To ask the Tánaiste and Minister for Finance the ethical investment guidelines being adopted in respect of investments and investment vehicles such as the National Pension Reserve Fund under the remit of his Department; if such investments are made in accordance with United Nations Guidelines on Ethical Investments; if the Government has advised the NPR Fund in respect of investments in companies involved in products such as arms, weapons and tobacco production, promotion and marketing; and if he will make a statement on the matter. [29587/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Under the National Pensions Reserve Fund Act 2000, the National Pensions Reserve Fund Commission controls and manages the National Pensions Reserve Fund. The Commission has discretionary authority to determine the Fund's investment strategy in accordance with the Fund's statutory investment policy of securing the optimal total financial return provided the level of risk to the moneys held or invested is acceptable to the Commission.

The Commission joined a group of the world's largest institutional investment funds in signing the UN-sponsored Principles for Responsible Investment when they were launched in April 2006. The aim of the Principles is to integrate consideration of environmental, social and governance (ESG) issues into investment decision-making and ownership practices and, thereby, to improve long-term returns.

As set out in its Annual Report 2006, the Commission's initial focus in its implementation of the Principles is on the development and implementation of a comprehensive proxy voting policy and development of the capacity to engage on ESG issues with the companies in which Fund moneys are invested. As implementing a comprehensive voting and engagement policy has considerable resource implications, the Commission has decided to contract a third-party service provider to deliver these services. The service was put in place in July of this year when the Commission announced the appointment of Hermes Equity Ownership Services to execute proxy votes on the Fund's behalf and to engage with companies on ESG issues across its worldwide equity portfolio.