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A welcome for news that Ireland’s sovereign wealth fund is to integrate ESG across all domestic deals

 

Sustainable Nation Ireland, the body that promotes Ireland as a hub for sustainable investment and finance, has welcomed 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.

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

ISIF 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. Today, over 1,600 signatories representing $68tn AUM have signed up to the Principles.

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.”

The move comes a month after 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.

Commenting, CEO of Sustainable Nation Ireland Stephen Nolan welcomed news of the development and said that the framework could be in place by the end of the year.

“This is exciting news and a welcome development as it builds on recent announcements in this area, not least last week’s publication of the EU’s High-Level Expert Group on Sustainable Finance final report.

“And with an ever-increasing number of Irish located asset managers integrating ESG across their investments, this points to an upward tick in Irish capital markets embrace of the ESG agenda, which is mirroring international trends. Given that Sustainable Nation Ireland has a mandate under government’s IFS2020 Action Plan 2018 to raise awareness of this agenda and that it is also the Year of Sustainable Business 2018, we are delighted with this positive trend.”

*Notes:

In realising it’s IFS2020 Strategy mandate to raise awareness of the responsible investment agenda, in early 2017 Sustainable Nation along with leading Irish located asset managers co-founded the Sustainable & Responsible Investment Forum Ireland (SIF Ireland). The national platform for policy makers, capital providers and intermediaries to advance sustainable & responsible investing across all asset classes, co-founders include Amundi, the Ireland Strategic Investment Fund, KBI Global Investors, Cantor Fitzgerald, Mediolanum, BCP Asset Managers, the Irish Association of Pension Funds and KPMG with the Department of Finance as an Observer. Sustainable Nation is SIF Ireland’s secretariat. For further information on SIF Ireland please contact Che McGann at [email protected]

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