Story 3 pic ISIF invests

Sovereign wealth fund embraces ESG

Ireland’s Strategic Investment Fund to integrate ESG across all domestic deals

News that Ireland’s €19.7bn sovereign wealth fund is to integrate Environmental, Social and Governance (ESG) factors of investment across all its Irish transactions, has been welcomed.

The Ireland Strategic Investment Fund (ISIF) intends doing so with the development of a bespoke ESG framework for investments in Ireland’s domestic market.

The move builds on already very positive Irish leadership in this area – in January the Central Bank awarded its first ever outsourced mandate, hiring Amundi as part of a tender process which required investment managers to demonstrate commitment to responsible investment.

ISIF comprises both an €8.7bn “discretionary portfolio”, focusing on equity investments in Ireland and elsewhere, and an €11.2bn “directed portfolio” which is dedicated to investing in Irish banks.

The fund identified a need for specialist services to assist in further developing its considerations of ESG in its Irish portfolio, which currently stands at €3.4bn invested into Irish located projects.

The new framework will apply to ISIF’s discretionary portfolio and is being developed with environmental consulting firm ERM, which was appointed in September. ISIF is managed and controlled by the National Treasury Management Agency (NTMA).

The Fund’s predecessor, the National Pensions Reserve Fund (NPRF) was a founding signatory to the UN Principles of Responsible Investment (UNPRI) and has been committed to responsible investment for over a decade.

A spokesperson for the Fund told Responsible Investor: “The ESG framework is a specific project focused on the bottom-up systematic integration of ESG factors across all Irish transactions on both pre-investment and post-investment basis. ISIF is also aiming to establish systematic ESG monitoring for the Irish portfolio as part of the framework.”

Sustainable Nation Ireland’s Director of Sustainable Finance, Laura Heuston welcomed news of the development and said that the framework could be in place by the end of the year.

 

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