CIEL Statement on Ireland’s Strategic Investment Fund (ISIF) Divestment from Fossil Fuels

July 13, 2018

Yesterday, Ireland achieved a major victory in taking the first step towards becoming the first country in the world to fully divest its public money from fossil fuels. The Fossil Fuel Divestment bill passed in the Dail (lower house) directs the Ireland Strategic Investment Fund to sell off all of its approximately € 318 million of coal, oil, gas, and peat assets as soon as practical, or approximately in the next five years. By virtue of political support by both parties, the bill is expected to pass the Seand and is on track to become law by the end of the year.

Lisa Anne Hamilton, Director of Climate and Energy at the Center for International Environmental Law (CIEL), released the following statement:

We applaud Ireland’s landmark commitment to become the first country to divest from fossil fuels. Today’s announcement marks a significant achievement in state responsibility to both fulfil commitments under the Paris Agreement to reduce carbon emissions and to protect the financial interests of fund beneficiaries as the world rapidly transitions to a low-carbon economy.

The window of time for governments to effectively respond to the climate crisis is rapidly closing. Governments must take action now to phase out investment in fossil fuel assets that contribute to the increased severity and intensity of climate change-aggravated weather events that are becoming a global human rights crisis.

Ireland’s announcement is also an act of fiduciary responsibility to protect the interests of beneficiaries under the fund. By divesting from fossil fuels, Ireland’s fund will be actively addressing the legal, regulatory, and financial responses to climate change that will impact portfolios with long-term time horizons. By engaging in a divestment process now, Ireland is protecting the investment interests of its beneficiaries by monitoring and managing the risks of significant losses and forecasted declining rates of return as the global transition away from fossil fuels accelerates.

For a country that was ranked 49 of 59 countries in the 2018 Climate Change Performance Index, Ireland’s divestment plans should also be interpreted as yet another market signal about the shift in financial flows away from fossil fuels. Earlier this year, New York City and New York state announced their plans to divest public funds from fossil fuels. The question that remains is not whether but when and how quickly other governments will move to divest from fossil fuels as well.