The Republic of Ireland has passed a bill that will see the country divest from any investments held in fossil fuel companies, making it the very first country in the world to do so.
The bill made it through with cross-party support on Thursday and is now expected to fly through the country's upper house of parliament.
“The [divestment] movement is highlighting the need to stop investing in the expansion of a global industry which must be brought into managed decline if catastrophic climate change is to be averted,” said Thomas Pringle, an independent member of parliament who introduced the bill, reports The Guardian.
“Ireland by divesting is sending a clear message that the Irish public and the international community are ready to think and act beyond narrow short-term vested interests.”
So, what does this mean exactly? Quite simply, the Ireland Strategic Investment Fund (ISIF), currently worth €8.9 billion ($10.4 billion), Reuters reports, will be required to strip investments in oil, gas, coal, and peat. Or, as the bill explains in an amendment, those companies "whose business is engaged, for the time being, in the exploration for or extraction or refinement of a fossil fuel where such activity accounts for 20 percent or more of the turnover of that undertaking."
It is estimated that more than €300 million ($371 million) of the investment fund is currently tied up in fossil fuels. According to the bill, it will be required to divest "as soon as is practicable", which is suspiciously vague. According to Reuters, however, they are expected to do so in the next five years.
While several institutions, including the Church of England, New York City, the American Museum of Natural History, and the University of Edinburgh, have vowed to divest from fossil fuels, whole countries have been slower on the uptake.
Up until now, Norway has led the way, banning its sovereign wealth fund, the largest in the world with an estimated worth of $1 trillion, from investing in businesses that obtain more than 30 percent of their profit from coal. It is considering doing the same to those involved in oil and gas but Ireland is the first country to instate an all-out ban on fossil fuels.
The decision may, in part, be inspired by a report released last month that ranked Ireland as the second-worst European country for climate action, just above Poland and slipping down 10 places from the year before. Without "new, immediate and substantive efforts to cut emissions," the report warned, "Ireland faces annual non-compliance costs of around €500 million."
As Pringle reminded his fellow lawmakers, "With this bill we are leading the way at state level... but we are lagging seriously behind on our EU and international climate commitments."