March 10, 2020

The sustainable strategy of Ireland's investment fund

Sustainable Finance in Ireland

Climate change has emerged as a definitive factor in business development and long term prosperity. Sustainable investment options provide greater potential in delivering customers and stakeholders a better outcome. Sustainable finance incorporates green bonds, socially responsible investment (SRI), sustainable infrastructure investment, climate and performance bonds. These areas have been highlighted as a vital part of the ‘Ireland for Finance’ strategy for the development of the national financial services sector to 2025.


In the last year, Ireland’s Strategic Investment Fund shifted its strategy to enhance its focus in certain industries including housing and climate change. Based on annual reports by the National Treasury Management Agency (NTMA), the generation controls approximately 3% of ISIF’s global investment portfolio is valued at just over 200 million euros.


In a recent engagement meeting, the key focus of the agenda was exploring the progress of the ISIF Irish and global investment portfolio. It has been six years since the government allocated over 7 billion euros of taxpayers money from the national pension to create the ISIG. According to their own figures, the ISIF has increased in value by over 1 billion euros through its national and global investment portfolios. Eugene O’Callaghan, the director of ISIF stated that the fund experienced an investment return of over 5% in 2019 with the Irish portfolio securing a slightly higher return. The figures indicate that Ireland has gained a positive annualised return, higher than the global averages recorded.


O’Callaghan explains that ISIF has allocated over 4.5 billion euros to businesses and projects in Ireland in the form of debt and equity programs. In the last year, the fund made a significant shift in its investment strategy to focus on five core areas including housing, regional development and probably the most critical global issue of our time is climate change.


According to 2019 reports, ISIF has secured nearly 350 million euros to a number of renewable energy businesses and forestry projects over a five year period, with plans to invest an additional 5oo million euros in the next decade. This includes a major investment into four energy storage projects, including an investment into London-based Gore Street Capital which has current assets in both Wexford and Kildare.


In the engagement meeting O’Callaghan explained that the key concept concerning the approach to sustainability is focused on ensuring that environmental, social and governance factors are considered completed in the investment decision process. O’Callaghan highlights that the ISIF is continuously  looking and integrating these considerations into their wider investment strategy.