Investment companies with subsidiaries in Ireland have invested €5.7 billion in fossil fuels since the Paris climate agreement of 2015, a new report has revealed.
The research by charity ActionAid claimed Ireland was a “significant channel” for global investment in fossil fuels and industrial agriculture with funds registered here holding billions of euros in bonds and shares in climate-harming activities in the global south, which comprises large parts of Africa, Latin America, the Caribbean and most of Asia.
“This unsustainable financing is provided by many of the world’s biggest banks — and Ireland enables billions of this money to flow,” the report said, noting the top six investments held here were all oil and gas companies.
‘Global south’
“It is completely by design that Ireland acts as a channel for global institutional investors to profit from their fossil fuel investments in the Global South,” it said.
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The report also revealed that as of January this year, Irish financial institutions here held €12.1 million of investments in fossil fuels. Of this figure, the State-backed Ireland Strategic Investment Fund held €10.4 million, mostly in bonds issued by Chinese electric utility company State Grid Corporation of China.
The details about Ireland’s role in financing fossil fuels were released as part of the wider report, which indicated bank financing to the fossil fuel industry in the global south reached an estimated $3.2 trillion in the seven years since the Paris climate accord.
Bank financing provided to the largest industrial agriculture companies operating in the southern hemisphere countries, many of which were on the frontline of the climate crisis, amounted to $370 billion over the same period, it said.
The report also highlighted that since the Paris climate accord, banks globally have provided 20 times more financing to fossil fuels and agriculture activities in the global south than northern governments as climate finance to countries on the front lines of the climate crisis.
“At a time of unprecedented climate crisis, the world’s banks and investments funds continue to invest staggering amounts into fossil fuels and environmentally harmful large-scale agribusiness in the Global South,” said ActionAid Ireland chief executive Karol Balfe.
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“This is destructive practice and truly shocking. Our research shows that Ireland plays a role in this through our corporation tax regime which depends on foreign direct investment,” she said.
“More than 1,200 multinational companies have established themselves in Ireland, drawn by its access to the European single market, an English-speaking workforce, and a very attractive corporation tax regime. But this comes at a cost for the world’s poor, particularly women, who are disproportionately affected by the climate crisis,” she said.
“The negative impact of Ireland’s corporation tax regime on the human rights and poverty levels of citizens of the global south, and its lack of coherence with Irish Aid priorities, needs to be questioned,” Ms Balfe said.
“The fact is that Irish investment managers over the last five years held billions in bonds and shares attributable to fossil fuels and agribusiness in the global south. This reveals huge flaws in regulation,” she said, noting that as the world faces a devastating climate crisis, businesses, banks and private pension funds have no legal obligation to divest from practices that are harmful to the environment.”
