The State-backed Ireland Strategic Investment Fund (ISIF)would have made around €22m more than it did at the end of last year had it sold off its fossil fuel stocks and invested in clean energy, a report has claimed.
The paper, commissioned by Trocaire, argues retaining fossil fuel investments cost ISIF around €100m in the past three years.
Trocaire is due to present the report, which was carried out by Canadian-based research firm Corporate Knights, to TDs in the coming days.
The report claims ISIF is investing in more carbon efficient stocks relative to peers, but also tends to invest more overall in high carbon sectors.
“The ISIF had investments in about 50pc more ‘green’ companies than the MSCI ACWI (Morgan Stanley Capital International All Country World Index) benchmark,” the report states. “It also appears to tend to pick more carbon efficient stocks particularly in the utility sector, demonstrating awareness around climate change.
“However, the ISIF has higher than average exposure to high carbon sectors.
“It has investments in 50pc more fossil fuel companies and has a 50pc higher carbon footprint than the MSCI ACWI benchmark.”
The paper claims that had ISIF sold its fossil fuel stocks at the start of last year in favour of clean energy shares, it is estimated ISIF would have accumulated €22m more at the end of 2015, while lowering the portfolio’s carbon footprint by 48pc.
“It is estimated that retaining fossil fuel investments cost the ISIF €100m over the past three years,” the report notes.
“Unwinding existing fossil fuel investments in favour of increasing investments in green companies would further align the ISIF with Ireland’s sustainability objectives.”
In a submission to the Public Accounts Committee in September, ISIF, the successor to the National Pension Reserve Fund (NPRF), said it commits to a review of its carbon exposure .
“As a sovereign fund the ISIF aims to invest in a manner that is aligned with government policy and as a responsible investor the fund is focused on Ireland’s commitments across a variety of policy initiatives.”
An ISIF spokesman told the Irish Independent its holdings in fossil fuel companies are legacy investments from the NPRF and are being reduced on a phased basis.
“The ISIF’s energy allocation of €800m includes a significant element of renewables investment as the fund is committed to investing in the energy sector in a manner that is consistent with the State’s commitment to make the transition to a low carbon, climate resilient and sustainable economy,” he said.
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