Jack Chambers (Dublin West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

111. To ask the Minister for Finance to outline his views on the fact that taxpayer funds are currently invested in three separate tobacco companies as part of the Ireland Strategic Investment Fund, managed through the National Treasury Management Agency; his views on the appropriateness of this investment; if he has expressed any views regarding this matter directly to the NTMA; his views on calls to add tobacco companies to the list of prohibited investment categories; and if he will make a statement on the matter. [33377/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am informed by the Ireland Strategic Investment Fund (ISIF) that as at 31st October 2016 ISIF had equity holdings in three tobacco companies with a value of €1.5 m or 0.02 per cent of its total assets.

Such investments should be considered in the context of ISIF's broader portfolio and the Fund's commitment to responsible investment. ISIF has recently published its Sustainability and Responsible Investment Policy which is available on its website. In addition, the Fund operates to high international standards and invests in line with both the UN-sponsored Principles for Responsible Investment (PRI) and the Santiago Principles, which are the globally accepted best practice principles for sovereign investment funds such as ISIF.

ISIF commits to reviewing all of its investments for exposures to sectors and/or companies with potentially controversial business exposures and associated reputational risks. Exclusion has not been part of ISIF's Responsible Investment strategy with the only exclusions from the Fund being mandated by legislation. To-date, the Cluster Munitions and Anti-Personnel Mines Act (2008) is the only relevant legislation and the ISIF operates a prohibited securities list of 19 companies on this basis.  There is currently no basis for tobacco exclusions in legislation. I am informed by ISIF that its senior management and the NTMA Board's Investment Committee agreed to review their current policy on exclusions. This review is underway and is expected to be completed by the end of the first quarter of 2017.

Separately, a review of ISIF's investment strategy, due to take place 18 months after the establishment of the ISIF, is also underway. The review will include an appraisal of the success of ISIF's mandate to date. I am informed by ISIF that preparatory work in respect of this review has commenced and is due to be completed by end-2016.

The NTMA (Amendment) Act 2014 provides that ownership of the Fund vests with the Minister for Finance. It also provides that the Fund shall, in reviewing its investment strategy, consult the Minister for Finance and the Minister for Public Expenditure and Reform. The review of the ISIF will be conducted in accordance with these provisions. In addition, the legislation provides that the Minister for Finance may consult with other Government Ministers as appropriate.

In light of all of the foregoing I am satisfied with the approach adopted by ISIF to date in implementing its agreed investment strategy while taking into account international best practice. Both the NTMA and Government are mindful of the fact that public attitudes and policy are not fixed and can evolve. The ongoing review of exclusions by the NTMA and the wider review of ISIF's investment strategy are opportunities to fine tune in the light of relevant developments both nationally and internationally.