Dáil Éireann Debate, Tuesday - 16 December 2025
362. Deputy Ciarán Ahern asked the Tánaiste and Minister for Finance his Departments plans to address the scale of fossil-fuel investment routed through Irish-based financial entities in view of recent EU-level deregulation proposals and the evidence that existing regulatory measures have not prevented such investments; and if he will make a statement on the matter. [71500/25]
View answerFirstly, it is important to understand that the Irish economy at present remains reliant on fossil fuels for the majority of its energy inputs – so economic activity in Ireland at present involves fossil fuel consumption for over 80% of its energy needs.
In regard to financial services firms’ involvement in supporting fossil fuel investments in Ireland, I would respond by saying that addressing climate risks and supporting the transition to a carbon-neutral economy is a key part of financial regulation: the Central Bank of Ireland’s Strategy for 2025-27 sets this out clearly.
Governor Makhlouf has re-affirmed the Central Bank’s commitment to addressing the macro-financial risks arising from climate change and enabling finance for sustainable and transitioning activities.
As a major funds jurisdiction, Central Bank figures for end September 2025 show that approximately €2 trillion of funds authorised in Ireland are made up of investments promoting a sustainable objective (Article 8 SFDR) or with a sustainable objective (Article 9 SFDR) - and this is approximately 35% of the total authorised Irish funds.
The Central Bank has also considered the importance of transition planning for the financial sector and published an Information Note on this important issue earlier this year.
It is important to note that while the EU and Ireland are on a path to net zero emission by 2050, at present our economies are still dependent on carbon emitting fuels. Investment is needed in high emission sectors in order for them to decarbonise.
The development of the Sustainable Finance Disclosures Regulation (SFDR) has brought sustainability and Environmental, Social and Governance (ESG) features into the disclosures space. This month, the European Commission has undertaken a significant review of the Sustainable Finance Disclosures Regulation framework. The aim is to simplify the regime, while supporting and incentivising investment towards credible transition and sustainable products.
The European Commission has published a proposal centred on the development of product categories which will have specific contribution requirements; more than 70% of assets are aligned with that category and there are to be certain standardised exclusions for certain fossil fuel activities. The new proposal aims to significantly restrict the use of sustainability terminology in names and marketing materials, reserving them for those who meet the strict criteria of the mandated categories. This change seeks to improve clarity and transparency, combating the misuse and misleading claims, ensuring that these labels more accurately reflect genuine sustainability commitments.
Finally, with respect to State investments, the Fossil Fuel Divestment Act 2018 has been in place since December 2018. Pursuant to the terms of the Act, the National Treasury Management Agency must, inter alia, endeavour to ensure that the assets of the Ireland Strategic Investment Fund (ISIF) are not directly invested in any undertaking that generates 20% or more of its turnover from the exploration for or extraction or refinement of a fossil fuel (coal, oil, natural gas, peat or any derivative thereof intended for use in the production of energy by combustion).
ISIF has developed a list of fossil fuel companies in which it will not invest, as determined by criteria within the Act. This list is updated on a semi-annual basis in line with methodology which is aligned to the Act and is available on ISIF’s website. ISIF’s Climate Investment Strategy seeks to fund climate positive initiatives which support Ireland’s transition to a Net Zero low-carbon economy.
Section 31 of the Future Ireland Fund and Infrastructure, Climate and Nature Fund Act 2024, builds upon the Fossil Fuel Divestment Act 2018, requiring the NTMA to endeavour to ensure that the assets of either the Future Ireland Fund (FIF) or Infrastructure, Climate and Nature Fund (ICNF), are not directly invested in a fossil fuel undertaking.
