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Ireland discussing bill to require fossil-fuel divestment by sovereign wealth fund

Coal plant

Ireland is close to introducing a fossil-fuel divestment obligation into law that would compel Ireland Strategic Investment Fund to sell off its investments in fossil-fuel companies.

After the Irish government voted in favor of the draft bill on Jan. 26 in a second stage reading, the bill was referred to the select committee on finance, public expenditure and reform within the lower house of the Irish government and the taoiseach.

It may not be further scrutinized before going to the upper house, according to a spokeswoman of the Irish government

“Once the bill completes all stages in both houses, the bill will be sent to the president and when signed becomes the law,” she said.

A spokesman for the Dublin-based €8 billion ($8.5 billion) sovereign wealth fund said, “any impact of the new legislation on Ireland Strategic Investment Fund portfolio in relation to fossil-fuel investment would depend on the final wording of the legislation.”

Ireland’s sovereign wealth fund remains committed to a 2014 mandate given by the government when it was established to take over from its predecessor, National Pensions Reserve Fund.

As part of the mandate, the fund was already compelled to divest from holdings in fossil-fuel companies by 2019 in order to contribute to the transition to a low-carbon economy, according to spokesman.

“Legacy investments are being sold off in line with ISIF’s mandate to invest on a commercial basis to support economic activity and employment in Ireland,” the spokesman said.

ISIF’s allocation made under the mandate includes renewables investments, forestry investments, a €44 million commitment to the €500 million Dublin waste project and €35 million commitment to an onshore wind fund.