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THE IRISH STATE’S sovereign wealth fund has just sold all of its shares in tobacco companies in a move to offload some of its ‘legacy investments’.
Finance Minister Michael Noonan announced today that the Ireland Strategic Investment Fund (Isif) “has completed the sale of its remaining investments in tobacco manufacturing”.
Isif said its decision to sell off its legacy investments in tobacco manufacturing companies “is part of a wider review of the exclusion of categories of investment from the fund as a whole, which is due to be completed in early 2017″.
Isif recently told TheJournal.ie that, as of 30 September 2016, it had equity holdings in three tobacco companies with a value of €1.5 million. A spokesman for the NTMA said that the company also held €16.7 million in tobacco-related corporate bonds.
This is relatively small relative to Isif’s total investments. The organisation, which was established with remaining funds from the National Pension Reserve Fund (NPRF), has a total fund of €7.9 billion and expects to have about €3 billion of that by the end of 2016.
The NTMA’s investments in the companies are made through fund managers, rather than the organisation actively selecting the firms or industries.
Ethical investment
Isif’s ethical investment policy for armaments is mainly influenced by its commitment to the UN Principles for Responsible Investment, but this policy does not stop its funds going into the sector altogether.
Under the UN guidelines, Isif is required to carry out investments on an ‘active-ownership basis’, which means it does not have to rule out any companies as long as it works to improve their environmental, social and governance policies.
A law that would have banned Isif from investing in tobacco companies was recently floated in the Seanad by Fianna Fáil Seanad health spokesperson Dr Keith Swanick, who said that the state’s investments in tobacco companies “makes a complete mockery of the stated objectives of a tobacco free Ireland by 2025″.
The Department of Finance said that all of Isif’s investments since its establishment in December 2014, “comply with the fund’s sustainability and responsible investment policy, which sets out key principles for responsible investment”.
Tobacco control
Minister Noonan welcomed Isif’s decision, saying: “Ireland has earned a significant reputation as a leader in tobacco control and, as we know, tobacco use is a leading cause of preventable death in Ireland and throughout the world.
The legislation that established the Ireland Strategic Investment Fund, provides that the fund’s investment strategy will be carried out in accordance with government policy. Today’s decision reinforces the government’s policy on tobacco.
He added: “Public policy is not fixed and can evolve, and the ongoing reviews by the Isif are opportunities to fine tune its investment approach in the light of relevant developments both nationally and internationally.”
This story was updated to include more information on the value of ISIF’s tobacco holding
Written by Paul O’Donoghue and posted on Fora.ie
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They could have done this earlier instead of selling Bord Gais and the National Lottery to name but a few worthy keepsakes.
They should invest in pot and legalize it
@Jake Orb: the booze industry would suffer, fg couldn’t have that.
The big tobacco companies have retained the big law firms in Dublin to sue the State for inhibiting the sales of lethal tobacco products by plain packaging and other measures. TTIP, if adopted, will also be used.
Smoking tobacco causes morbidity and mortality.
In Submissions to the Jount Oireachtas Committee on Health, the President of the Law Society of Ireland and the Director General of the Law Siciety made a strong and impassioned plea on behalf of its entire membership objecting to plain packaging.
It was a strong lobbying measure by the Law Siciety of Ireland which contended that intellectual property rights must decisively prevail over public health.
I watched a close relative die of a smoking related cancer. It was horrific.
AA Gill recent,y died from a metastised lung cancer, the full English, diagnosed as due to his smoking 15 years prior to his death.
Smkimg related morbidity is a major drain on the Irish health service.
That’s the pension fund gone up in smoke so.
Any chance they might reinvest in Digicel?
I would buy natural tobacco if it was sold instead…
Tobacco company stock is actually a great hedge against a large recession/downturn in the stock market.
To say tobacco stock is probably in the toilet just shows ignorance, frankly it’s a great performer and while tech or finance stocks have bubbled and burst, devastated many an investor, those with holdings in tobacco have seen steady rises in their holdings and also great dividends. They have to be more generous in their dividends to compensate for it being thought of as a risky stock by Joe Soap scared that the next big anti-smoking lobby will sink them.
E100 million in investments in the last year alone. I wonder what was the return, expected or actual, for all of these investments and do they stand up to independent scrutiny. Clever investment or Brown Envelope Department?
Which tobacco companies did they invest in? BAT is good
Was just wondering the same thing, who decides where the money is invested and how much a a return have we had since it’s setup?
The Irish financial sector isn’t a sector to be trusted with the states money.
As proven by the crash.
Tobacco stock is probably in the toilet these days, they sold too late.
@Tom: Anything but, tobacco stock remains the best return on investment. Thanks to agreeing terms with governments it now enjoys a monopoly on consumer nicotine and a stable regulatory environment. This smacks of virtue signaling, I wonder if they will also drop investments in arms industry etc?
Proper order to dispose of the investment.
Reconsider only when the plant is used in alternative ethical applications, or replaced by other agri production.
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