Ireland to divest all Fossil Fuel Interests
In a move supported by all parties, Ireland’s lower house of parliament has ordered the Republic’s €8bn national investment fund to sell all interests in fossil fuel companies. Under the terms, stakes in companies active in the coal, oil, gas and peat sector must be divested “as soon as is practicable.” A timeframe of about five years is targeted.
The bill, which defines a fossil fuel company as one that derives 20% or more of its revenue from exploration, extraction or refinement of fossil fuels, is expected to pass the upper house without problem, so that it could become law before the end of the year.
Currently, the Irish state investment fund is believed to hold more than €300m in investments in 150 fossil fuel companies. The legislation permits investments in Irish fossil fuel companies to be retained if these fund their exit from the business.
Ireland’s decision will make it the first country in the world to divest from all fossil fuel investments. Norway made headlines with a similar but less radical move several years ago. But while its $1 trillion sovereign wealth fund has divested most of its interests in coal, it has not yet cut its ties to oil and gas, which are pillars of its economy.
Éamonn Meehan, executive director of international development charity Trócaire, said the Irish parliament has sent a powerful signal to the international community about the need to speed up the phase-out of fossil fuels. “Just last month,” Meehan noted, “Ireland was ranked the second worst European country for climate action, so the passing of this bill is good news. But it has to mark a significant change of pace on the issue.”
While Ireland’s divestment plans are unique on a national level, reports point out that the movement to move away from fossil fuel investments has grown rapidly on a number of other levels. Nearly 900 institutions, including large pension funds and insurers, as well as cities such as New York and churches and universities, are said to have committed to some degree of divestment.
According to Thomas Pringle, the independent member of the Irish parliament who introduced the bill, the movement “highlights the need to stop investing in the expansion of a global industry that must be brought into managed decline if catastrophic climate change is to be averted.”
Urging other countries to follow Ireland’s lead, the Global Legal Action Network – which reports said drafted the Irish legislation – commented that the parties to the Paris agreement on climate change will be unable to meet their commitments if they continue to financially sustain the fossil fuel industry.