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INSIGHT

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Contents Page

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Ireland: Growing Green Assets 1

JUNE 2013

Transition to a low carbon world affords huge opportunities for Ireland - Enda Kenny, T.D, An Taoiseach (Irish Prime Minister). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-4

Leading the way on energy efficiency - Pat Rabbitte T.D. Minister of Communications, Energy and Natural Resources. . . . . . . . . . . 6-7

Céad míle fáilte to green investments - Daniel Brooksbank, Editor, Responsible Investor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9

Talent: Building expertise for tomorrow - Professor Brian MacCraith, President, Dublin City University. . . . . . . . . . . . . . . . . . . . . . 10-11

In-house sustainability is ‘business as usual’ for Ireland’s Citi . . . . . . . . . . . . . . . . . 12-14

Dublin City Council gets on its bike to deliver a greener economic future - Mark Bennett, Green Business Officer, Dublin City Council. . . . . . . . . . . . . . . . . . . . . . . 16-17

The home of Guinness is getting greener: Dublin’s sustainability landmarks . . . . . . . 18-19

A new breed of asset manager - Stephen Nolan, Executive Co-ordinator, Green International Financial Services Centre (GIFSC) . . . . . . . . . . . . . . . . . . . . . . . . . . 21-23

Case studies: BlackRock, BNRG Renewables, Gaelectric, Glen Dimplex, KBI, Mainstream Renewable Power, NTR, OpenHydro Group. . . . . . . . . . . 24-27

RI Interview - Steve Falci, Head of Strategy Development Sustainable Investment, KleinwortBenson Investors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28-29

€6bn cornerstone investment to bolster Irish economy - Emma Jane Joyce, National Treasury Management Agency. . . . . . . . . . . . . . . . . . . . . . 30-31

Ireland’s expertise in renewable energy asset management is spawning a new growth area for the Irish funds industry - Dara Harringon, Partner, Asset Management and Investment Funds Group, Arthur Cox and Chair of the Irish Funds Industry Association’s Alternative Investments Committee . . . . 32-33

Ireland’s improving competitiveness augurs well for the Green International Financial Services Centre - Christian McManus, Audit Partner, Deloitte. . . . . . . . . . . . 34-35

Top 10 impacts of regulation on asset managers - Enda Faughnan, Tax Partner and Ken Owens, Asset Management, PwC Ireland. . . . . . . . 36-37

Ireland, the natural choice for green asset management - Michael Hayes, Chairman, Global Green Asset Management Network and Head of Energy and Natural Resources, KPMG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38-39

Biodiversity and the preservation of Ireland’s natural beauty - Paul Harris, Head of Natural Resource Risk Management, Bank of Ireland Global Markets. . . . . . . . . 40-41

Ireland: A persuasive case for business investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42-43

RI Interview - Dr Brian Motherway, CEO, Sustainable Energy Authority of Ireland. . . . . . . . 44

Clean energy innovation - John McKiernan, Partner, Greencoat Capital. . . . . . . . . . . . 45-46

Sustainability, asset classes and Ireland’s end-to-end offering - Garrett Monaghan, Partner, Arthur Cox. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47-48

Stephen Nolan,Executive Co-ordinator, [email protected]

Angela Madden, Director of Communications, [email protected]

Mary Elizabeth Bruton, Communications and Research [email protected]

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INSIGHT

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Green International Financial Services Centre

Green International Financial Services Centre

Ireland is home to a world class fundscentre with $3 trillion in assets under

administration and 25 years experience.

Irish enterprise companies are developingand actively engaged in rolling out morethan 20 GW of renewable energy around

the world.

These two sectors combined is what sets

Ireland apart. Ireland offers an unparalleled

talent pool of people, professional services

and service providers to manage

environmental funds.

A new breed of asset manager is being born and Ireland

is the incubator.

We have everyresource you need to grow your business

Tel: +353 1 818 3301Email: [email protected]: www.gifsc.ie

Ireland: Growing Green Assets

RI INSIGHT JUNE 2013

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Our world is changing in profound ways. Theprevailing model of economic, social andenvironmental development is being

fundamentally challenged by the reality of climate change.Individually and collectively, we must think in new ways,placing sustainable development at the centre of our

decisions and thereby safeguarding thefuture for our children and forgenerations to come.

The global investment community,too, is recognising the importance ofsustainability. Global clean energyfinance and investment stood at $269bnin 2012, with projections that some$650 billion per annum will be spent inthis sector by 2030. Global investment

in renewable power generation alone is now running inexcess of US$200 billion annually. Investment in the GreenEconomy sector as a whole is predicted to grow fourfold to

over $1 trillion by 2020. Investors in the Green economyinclude pension funds, life assurance funds, largecorporations and high net-worth individuals.

Ireland’s opportunityIreland, which has extensive expertise in both therenewable energy and funds sectors, has a uniqueopportunity to become a major centre for green assetmanagement. Ireland is already home to $20 billion inassets held in renewable or environmental finance fundsand fast gaining a reputation as home to a cluster ofspecialist asset managers.

A number of Irish companies are to the forefront indeveloping innovative cleantech products. They have metwith notable success in exporting their offerings to majorinternational markets such as the US and the Middle East.Allied to this Ireland is at the leading edge in relation toresearch in a number of areas which complement theGreen Economy including agri-food, ocean energy, smartgrids and smart city technologies.

Transition to a lowcarbon worldaffords hugeopportunitiesfor Ireland

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Investment in theGreen Economysector as a whole is predicted to grow fourfold toover $1 trillion by 2020

by An Taoiseach, Enda Kenny T.D.


4 Ireland: Growing Green Assets

Ireland’s Policy FrameworkMy Government is creating a policy framework which willenable Ireland develop its potential as a leader insustainable development. The Government’s Action Planfor Jobs 2013 highlights that Ireland’s natural environment,coupled with its strong research base and a number ofleading-edge companies, “provides us with extensiveopportunities for development of the Green Economy inareas as diverse as renewable energy, sustainable foodproduction, tourism, environmental resource management,‘Green’ financial services, and resource and energy-efficientproducts and services”.

In 2012, we published OurSustainable Future, Ireland’s Frameworkfor Sustainable Development. ThisFramework highlights measures forsustainable development in areas asdiverse as economic resilience, publicfinances, natural resources, agriculture,climate change, transport, public health,education, innovation and research,education, skills and training and globalpoverty. Our Sustainable Future looksbeyond the current economic challengesto forge a vision of how Ireland cantransition to a resource efficient, low-carbon and climate resilient future.

In 2012, we also publishedDelivering our Green Potential - a policy statement onGrowth and Employment in the Green Economy. This policystatement sets out how the Government is supporting theGreen Economy in Ireland and affirms the Governmentcommitment to further developing the area in the yearsahead in accordance with the principles of sustainableeconomic development.

Ireland’s Green International Financial Services initiativeThe Government’s Strategy for Ireland’s InternationalFinancial Services Centre 2011-2016 commits to

developing Ireland as a centre of excellence in greenfinance, creating an industry-led “Green IFSC”. The GreenIFSC initiative has been set up to position Ireland as aleading player in financing the global green economy. Theinitiative targets environmentally-related financial services,with the goal of creating new jobs and generating revenuegrowth in and for Ireland. The Green IFSC initiativeenvisages that Ireland can grow the green assetmanagement business from $20 billion at the moment to $200 billion by 2017, creating up to 900 new jobs in theprocess.

The initiative has already succeeded inlaying strong foundations for growth inthe sector: facilitating a number ofmeasures to optimise the businessenvironment; investing close to $1 millionin new third-level educational courseware,and launching the ‘Greening the IFSC’initiative to ensure that the InternationalFinancial Services Centre is one of the most resourceefficient centres anywhere in the world. Green IFSC is nowfocusing on the significant challenge – and opportunity - ofgrowing green assets in Ireland.

In conjunction with initiatives like the Green IFSC, thisGovernment has been working hard to foster meaningfulengagement between policy-makers, international financialservices, our world-leading greentech enterprise leadersand our research and innovation system. This is a powerfulpartnership which we believe will drive the creation ofinnovative products and services, and support the globaltransition to a low-carbon economy.

Ireland can show true leadership in our approach tosustainable social, economic and environmentaldevelopment. The collective efforts of government, NGOs,academia and industry will be vital in helping Ireland toposition itself as a leader in the emerging Green Economy,helping to address global concerns about issues like energysecurity and climate change, and helping to buildprosperity for future generations.

“ Ireland can showtrue leadership inour approach tosustainable social,economic andenvironmentaldevelopment

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Our SustainableFuture looks beyondthe currenteconomic challengesto forge a vision ofhow Ireland cantransition to aresource efficient,low-carbon andclimate resilientfuture

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Ireland is proposing innovative financing solutions inenergy efficiency to save money and create jobs, saysPat Rabbitte T.D., Minister for Communications, Energy

and Natural Resources.Sometimes out of adversity comes opportunity. It could

be said that Ireland’s economic downturn helped copperfasten Government’s commitment to energy efficiency andto create innovative ways of delivering tangible resultsquickly in challenging circumstances.

And that commitment and planning is paying off withIreland leading the way on energy efficiency.

This leadership is, in part, evidenced by the recentpublication of Ireland’s second National Energy EfficiencyAction Plan, which reaffirms Ireland’s commitment to a20% energy savings target in 2020. This plan containssome 97 actions, each of which will help secure a moresustainable energy future for Ireland.

This 20% energy savings target is equivalent to nearly32,000 Gigawatt hours (GWh) or a reduction in annualIrish CO2 emissions of around 7.7 Mega tonnes (Mt). Thismeans a potential reduction in annual energy spend ofapproximately €2.4 billion across all sectors of

Ireland: leading the way on energy efficiency

Pat Rabbitte T.D.,Minister for Communications,Energy & Natural Resources



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the Irish economy. It has been estimated that multiples ofthis amount will need to be spent in Ireland to deliver therequired energy efficiency measures, and this presents asubstantial investment opportunity.

A key challenge we face is to ensure that the necessaryfunding is available to finance the projects that will deliverour 2020 energy and climate goals. This is particularlyimportant given the potential for jobs and growth that asustained campaign of energy efficiency in buildings wouldrealise. By facilitating the development of the market in linewith the direction of European policy, energy efficiencyactivity will have multiplier effects to drive economicrecovery, restore competitiveness and create sustainablebusiness opportunities.

We are therefore introducing appropriate financingmodels for Ireland to replace existing exchequer supports

for domestic and non-domestic energyefficiency upgrade measures. Thedelivery of a new financing model forthe non-domestic sector is already welladvanced with the announcement ofthe intention to create a National EnergyEfficiency Fund.

How will the fund work?Over the last number of years,Government has invested €250 millionin Exchequer funding in energyefficiency programmes in the domesticand non-domestic sectors. This

investment itself has leveraged an additional spend in theIrish economy of more than €250 million.

It is now time for, and Ireland’s Programme forGovernment commits to, a move from Exchequer-fundedgrants to the introduction of sustainable financinginitiatives.

The Fund will provide finance to energy efficiencyinitiatives in the public and private sectors. The IrishGovernment has already committed €35 million as seedcapital. Matching funding, of a similar amount, is currentlybeing sought from private investors, such that the overallamount available for investment is greater than €70 million.

The National Treasury Management Agency (NTMA)’sNewERA Unit is playing a central role in advisingGovernment on the establishment of the Fund and hasbeen actively meeting with market participants, potentialinvestors and fund managers over the past few months aspart of this process.

The Fund is being supported by the creation of aNational Energy Services Policy Framework, which will helpstandardise energy performance contracting in Ireland. TheFramework is key, as it will provide a robust process forestablishing investment-ready projects. Work on theFramework is well advanced and the first version of theFramework will be published shortly.

Fund InvestmentsInvestments by the Fund have the potentialto create significant employment across abroad range of construction-relatedsectors. Experience from the existing grantbased schemes suggests that, substantialnumbers of jobs are created and sustainedby activity in the energy efficiency sector.

The Fund will complement theexisting financing that already takes placein the energy efficiency market (providedby both market participants and banks)but will have a dedicated focus on energy efficiency,bringing sector specific experience (in the form of the FundManager) to the market. This will lead to increased dealflow and, combined with the EPC Policy Framework, amore efficient financing process.

While many energy efficiency projects have shortpayback periods, they still need up-front investment, whichthe public or private sector body may not be in a positionto finance. The Fund will lend to and invest in projects on acommercial basis and may operate alongside banks whereappropriate in funding projects.

Exemplar ProjectsTo kick start this process we have called for exemplarprojects that will test the Framework this year and ensurethat we bring forward a pipeline of projects through thedevelopment phase. We want to prove the concept at scaleutilising about 20 pilot projects in 2013. These projects willbe provided with technical assistance to help them becomeprocurement/investment ready. By introducing thisdiscipline to the market we hope to instil confidence inproject promoters, energy service companies and of courseproviders of finance.

So, if you are seeking a medium to long-terminvestment in a high growth area, managed by a best inclass Fund manager, co-investing with Government,Ireland’s National Energy Efficiency Fund may just be theopportunity you are looking for.

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A key challenge weface is to ensurethat the necessaryfunding is availableto finance theprojects that willdeliver our 2020energy and climategoals

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The Fund will lendto and invest inprojects on acommercial basisand may operatealongside bankswhere appropriate infunding projects

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Ardnacrusha power station on the River Shannon

It’s perhaps fitting that Ireland has not onlyidentified but is acting on the strategicimperative of establishing itself as a hub for

green investment, asset management, privateequity, venture capital and asset servicing, underthe Green International Financial Services Centre(GIFSC) banner.

The Irish, of course, are famous for being hospitableand they are putting out the welcomemat for environmental investment. It’senvisaged that Ireland-based assetsserviced or managed in ‘green’ fundscould explode from $20bn today to$200bn by 2017 and with a fundsindustry, which today services $3 trillion

from a standing start 24 years ago, anything is possible.With the excesses of the ‘Celtic Tiger’ era and the

associated domestic financial crisis now increasingly in therear-view mirror, the Irish authorities are putting togethera far-sighted and coherent plan to not only attract, butalso, importantly, to service green investments.

GIFSC is a public/private initiative - an output of theClearing House Group of the Department of An Taoiseach.Its mission is to position and promote Ireland as theworld’s leading centre for environmental finance;essentially ensure the optimum business environment andthen market that offering with the goal of growinginvestment and funds and ultimately create jobs.

An example of this work is the launch last year of theGlobal Green Asset Management Network to boost thecountry’s green investment “cluster” and build on itsexisting $2.6trn (€2trn) investment funds market. Theinitiative straddles capital markets, investment bankingand related advisory services which support thedevelopment, finance and promotion of a low-carbon

economy. It includes funding of renewable energygeneration, energy efficiency measures, and trading andmanagement of carbon and cleantech/sustainable funds.

In practice, the network acts as a forum for marketpractitioners to reach a consensus on regulatory,legislative and educational needs for green investmentand then address them through engagement withgovernment, state bodies and other industry groups bothnationally and internationally.

Irish Taoiseach Enda Kenny, said at its launch at theNew York Stock Exchange: “Ireland is already emerging asa world leader in green finance. The establishment of thisnetwork can only serve to accelerate the continuedgrowth and copper-fasten Ireland’s growing reputation inthis sector.”

The Global Green Asset Management Network is part of theGIFSC’s follow up to a doubling of greenassets under management in Ireland to2012 and a tripling of assets over thepast four years. Importantly, it has thebacking of leading internationalcompanies such as US-based mutualfunds giant BlackRock, the largest assetmanager in the world, overseeing around$4trn (€3.1trn) of client assets, BNY Mellon, the assetservicing bank and consulting firms KPMG, PwC andDeloitte – to name a few.

“We have an incredible pool of talent who haveworked in this industry all over the globe,” says Jim Barry,Chief Investment Officer at Dublin-based BlackRockRenewable Power Group. “This was one of the keyreasons why BlackRock came to Ireland to source a large part of its investment team for its renewable energy platform.”

Ireland is alreadyemerging as aworld leader ingreen finance

to green investmentsCéad míle fáilte

We have anincredible pool oftalent who haveworked in thisindustry all overthe globe



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Another prominent specialist funds in environmentalinvesting is Kleinwort Benson Investors, which was one ofthe first investment firms in the world to launch separatewater and renewable energy funds, and which settled onDublin as its base for expansion. Its product line-up hassince expanded to include agribusiness and cleanersolutions.

Earlier this year, John Bruton, former Taoiseach, formerEU Ambassador to the US and President of IFSC Ireland -the marketing vehicle for the International FinancialServices Centre (IFSC) - led a GIFSC roadshow across theUS, targeting asset managers, wealth managers, privateequity and venture capitalists, and promoting Ireland as a

key location for green investment. The top level political and business

buy-in for GIFSC is to be applauded bythose who believe in the vital role thatinvestors have to take to avert climatechange. It’s a truism that supply createsits own demand, but a dedicated‘centre of excellence’ for environmentalinvesting will act as a catalyst across thesector.

It won’t all be plain sailing. Irelandfaces competition from other funds

domiciles, notably European neighbour Luxembourg,which has itself identified responsible investment as astrategic focus – although this, so far, has centred onmicrofinance and it doesn’t have the natural resources ofIreland which are needed to spawn renewable powerinnovation and therefore the asset managers whounderstand the sector.

And, the green investment industry faces challenges aslow EU carbon prices stymie industry development, despiteencouraging progress on carbon markets in Australia andCalifornia.

But Ireland has a green head-start. It was the firstcountry in the world to recognise forest carbon credits intax legislation. The country’s 2012 Finance Bill extends therange of carbon offsets that an investment company canacquire to explicitly include forest carbon credits. It’s thesekind of leadership initiatives that will make the countrystand out as the leading home for green and responsibleinvestment funds.

Mike Hayes, chairman of the Global Green AssetManagement Network and a partner at KPMG, believesIreland also has the financial experience to see it good indeveloping the green economy: “Underpinning GIFSC’sgoal to become a global leader in green assetmanagement is Ireland’s world-class international financialservices centre, one of the best business environments inthe world, a wealth of natural resources, innovative greeneconomy companies with global networks, a supportiveGovernment and an emerging talent pool of green financespecialists. Together these unique selling points provide allthe ingredients needed to enable Ireland to emerge as theglobal leader in green finance.”

Ireland has already been identified by consultancy firmErnst & Young as one of the most attractive countries forrenewables investment, ahead of countries such asDenmark, the Netherlands and Norway. The huge, $10.5bn(€8bn), Ireland-UK Greenwire project, which could seesome 700 turbines installed in 40 clusters across fivecounties in the Irish midlands with the energy to betransmitted to the UK via two high voltage undersea cables,is evidence of how important ‘green’ energy could become.

Demand on the investor side is also growing. The UnitedNations-supported Principles for Responsible Investment (PRI)has almost 1,200 major global investors signed up –representing an asset base put of $30trn, (€23trn) many ofwhom are investing in environmental strategies.

Another example is the rapid growth of the ‘greenbonds’ market, which represents billions of dollars inenvironmental loans for financing of corporate greeninitiatives.

The context for all this is the increasing realisationfrom those who have to allocate capital that climatechange is not a fad, or something that can be hedgedaway. Ireland is enthusiastically embracing that long-termfinancial and environmental challenge to create a marketfor a thriving green economy.

Its ‘céad míle fáilte’ (“a hundred thousandwelcomes”) to green investments.

Daniel Brooksbank, Editor, Responsible-Investor.com

Ireland has a greenhead-start. It wasthe first country inthe world torecognise forestcarbon credits intax legislation

Jim Barry, BlackRock Renewable Power Group

John Bruton

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Dublin City University is providing the academic andresearch foundations for Ireland’s move to globalprominence in the area of green finance.

The need for humankind to move to a low carbon,more sustainable society and economy is amongst themost profound global grand challenges facing us today.Making that transition successfully requires urgent actionon a global scale. For universities, these actions require usto break out of rigid disciplinary approaches to problemsolving and, more than ever, to engage with enterprise andgovernment to build the policies and provide the expertiseneeded to deliver on a low carbon future.

Dublin City University has adopted that very inter-disciplinary and engaged approach since its establishment.Today, through its mission to “transform lives andsocieties”, we are already playing an important role indriving the necessary global actions needed to addressclimate change and deliver a sustainable future.

These global actions include diplomatic and inter-governmental agreement on environmental targets,increased scientific research and development to help reachthose targets, and green financing to help fund andincentivise the transition to a low-carbon future. DublinCity University excels in all of these fields.

DCU is Ireland’s principal centre for internationalrelations that, more than ever, is focused on climatechange and its impacts. In terms of scientific research, we

are working on some of the most advanced aspects ofrenewable energy and environmental sensor development.Crucially, in partnership with the Green IFSC and SummitFinuas, we are also Ireland’s academic leaders in the area ofgreen finance.

For decades now, the Dublin City University BusinessSchool, the country’s largest business school, hascollaborated closely with Ireland’s main banking,accounting, investment and financecompanies to ensure Ireland had thetalent and research base necessary tomaintain our international leadershipposition in banking and finance. Today, tosustain market growth in areas such ascarbon and green accounting and assetmanagement, the need for talent andcutting-edge research is more importantthan ever. Again, the financial servicessector and Dublin City University arecollaborating to answer that need.

The DCU MSc in Sustainable EnergyFinance is designed around collaborationbetween Ireland’s enterprise and educational systems todeliver the necessary skills to service the rapidly growinggreen economy. It empowers graduates to create successfulsolutions to the opportunities and challenges representedby low-carbon markets, green investment project

Talent:Building expertise for tomorrow

The need forhumankind to moveto a low carbon,more sustainablesociety and economyis amongst the mostprofound globalgrand challengesfacing us today

Official launch of the new MSc Degree in Sustainable Energy Finance

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development and finance, green policy and institutionaldevelopment. It will also provide a strong foundation insustainability and finance for related professions such aslaw, engineering, project management and accountingthat deal with sustainability projects and carbonmanagement.

In developing both this MSc programme and theGraduate Certificate in Sustainable Energy Finance, DCUhas worked closely with the Green IFSC Initiative. The GreenIFSC was established by the Department of the Taoiseach(Prime Minister) to develop Ireland as a centre of excellencein green finance and carbon management, through thecreation of an enabling, coordinated and supportiveenvironment. Today, through our partnership with theGreen IFSC, DCU is the academic and research element of

that effort. As a result of thatpartnership, we have already seen theemergence of a cluster of internationalexcellence in sustainable financeeducational provision.

Building on our tradition ofacademic/industry collaboration, theprogramme was designed with, and isdelivered with a high level of inputfrom, senior executives from the IrishFinancial Services Centre. In the secondyear of study, in particular, participantshave significant contact with leadingacademic and industry contributors.

DCU’s fundamental role is todevelop the human and intellectualcapital required to meet the needs ofthe emerging global green economy.DCU achieves this through the M.Sc. inSustainable Energy Finance, ourresearch and enterprise collaboration.

A major initiative in support of thatrole is the development of the DCUCleantech Innovation Campus, a newnational centre for innovation in the

cleantech sector, now worth more than €5 trillion globally.The new campus, which will be a location of choice for

cleantech start-ups, SMEs and larger companies, isexpected to drive significant green economy growth in theNorth Dublin and Leinster area, supporting 200 jobs overthe initial 18 months.

Through the establishment of this new cleantech hub,companies can leverage the significant research expertise ofDCU and its extensive partner network, particularly in thearea of sustainability, thus positioning Dublin and Ireland asexamples of best practice in public/private collaboration tosolve global energy and environmental challenges.

There is an urgent need for all sectors to prepare forthe necessary low-carbon future. Within Dublin CityUniversity, sustainability is firmly on our agenda. It is thesingle most pressing global grand challenge facingmankind. In order to fulfil our mission to transform livesand societies DCU is determined to play our role withenterprise and government in rising to that challenge,through public policy, science and finance research,teaching and learning.

Professor Brian MacCraith,PresidentDublin City University

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• The IMD World CompetitivenessYearbook 2012 ranks Ireland firstin the world for availability ofskilled labour, flexibility andadaptability of workforce, and forattitudes towards globalisation

• More than half the Irishpopulation is under the age of 35(Euro stats)

• Dublin ranks number one in theworld for human capital (IMD)

• 60% of Irish students go on tothird level education

• Share of population aged 25-34with third level educationqualifications is higher in Irelandthan in the UK or US and abovethe OECD average

• GIFSC has the target of upskilling10% of those 33,000professionals currently employedin the International FinancialServices Centre in environmentfinance

• GIFSC in partnership with SummitFinuas and Skillnets has investedclosed to €1 million in newenvironmental educationcourseware

Source: GIFSC

DCU engineering and research building

The Helix



The next time you are in Dublin, your morning coffee,your afternoon swim and your evening heatingcould all be powered by...a bank. The provision of

surplus energy to external companies is just one of severalgreen projects instituted by the award-winning Irish Headof Citi Realty Services (CRS) Paul Boylan and his team whoare ensuring that Citibank Ireland is walking - and oftenleading - the sustainability talk.

Citi, with its Ireland HQ at the International FinancialServices Centre (IFSC), is one of several companies thathave pledged to shrink the carbon footprint of theirbuildings with partner support from the GreenInternational Financial Services Centre (GIFSC).

What started in 2006 as a green initiative to mainlytarget waste and reduce costs has burgeoned into asustainable green agenda aimed at reducing Citi’senvironmental impact while improving theircompetitiveness and enhancing their corporate image.Energy management, waste reduction and “the basic

application of common sense” expandedto include waste, water, consumption,travel and materials.

Today, seven years since the start ofCiti’s project, Boylan, whose impassionedsustainability work at the banking giantearned him the nickname ‘the Jolly GreenGiant’, says: “Being green has become verymuch business as usual”.

Boylan sees the minimisation of wasteas a unique opportunity to reduce Citi’senvironmental impact: “I have alwaysbeen intrigued by the concept of wasteand in many ways struggled tounderstand it or indeed how it should beallowed to happen in the first place. As achild, I was always fascinated by technology and those whoknow me remember that I was always the one to switch offthe lights,” he told Responsible Investor.

In-house sustainabilityis ‘business as usual’for Ireland’s Citi

What started in2006 as a greeninitiative to mainlytarget waste andreduce costs hasburgeoned into asustainable greenagenda aimed atreducing Citi’senvironmentalimpact

Citi’s Dublin HQ



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Despite a significant increase in building occupancy overthe last five years, Citi consumes over 40% less than theydid when the building was half-full. Its migration from anatural gas-fired CHP (Combined Heat and Power) on a Co-Gen basis to Tri-Generation allows the generation ofelectricity and the export of surplus energy to the grid. Thesystem enables excess heat to be used in local apartmentsand a nearby hotel swimming pool all year round via a DHS

(District Heating System). This not only generates secondaryrevenue through energy export but enables Citi toparticipate in so-called ‘demand side reduction’.

The removal of leaks, the introduction of automaticflushing/tap sensors, the re-commissioning of line pressurein their office service centres, and thepurchase of more water-efficientdishwashing systems have all contributedto reductions in excess of 750,000 litres ofwater per year. Citi’s two-dimensionalapproach to waste management -targeting it at source and end-point -means that they now operate on a zero-landfill basis. Waste production hasreduced dramatically: over 80% is directedto recycling with the remaining 20% usedas solid recoverable fuel (SRF).

“It felt good to be saving money for the right reasonsand, in addition, there were fringe benefits to consider!”says Boylan. The benefits have included extending the lifeof the bank’s assets, reducing its operational costs, andincreasing staff morale thanks to green awarenesscampaigns and engagement initiatives.

Citi’s initial greening momentum received a significantboost in 2008 with its commendation award for energyefficiency from the then-SEI (now the SEAI – SustainableEnergy Authority of Ireland). According to SEAI chiefexecutive Dr Brian Motherway: “Citi has been a leadingactor in energy cost reduction and sustainability for someyears now, and we have worked closely with it to supportits leadership role. Our support has been advisory and alsofinancial, and Citi has been a winner of our nationalSustainable Energy Awards. The savings have been veryimpressive and have marked Citi out as an innovator.

Citi's initial greeningmomentum receiveda significant boostin 2008 with itscommendationaward for energyefficiency

Paul Boylan - the “Jolly Green Giant”

Citi winning the 2012 CSR: Environmental Excellence award



Others are now learning from its example.”The bank has participated in SEAI grant-supported

energy initiatives such as data centre critical coolingretrofits and a wireless energy monitoring system. In

2012, Citi received a 35% contributionunder the Better Energy Workplacegrant scheme from the SEAI toconstruct its Citi New Energy Initiative,a retrofit project that, in theory,increases energy efficiency, minimisesgreenhouse gas emissions andminimises waste. Over the years theyhave also engaged with local andnational authorities such as Dublin CityCouncil, Dublin Chamber, ElectricIreland and the Environmental

Protection Agency (EPA), “all of whom have beenextremely supportive”, says Boylan.

Citi’s sustainability successes in Ireland have madeBoylan and, he says, the bank’s 2,200 employees veryproud: “Reflecting back, we have made some remarkableachievements. We’ve reduced energy, waste and water tolevels that we hadn’t anticipated and our success hasinspired even greater participation,” Boylan enthuses.

Locally, Citi has received several awards in the last fiveyears. In 2010 it scooped the Irish Independent GreenFinancial Institution of the Year Award and, most recently,Citi received the gong for Environmental Excellence in the2012 Chambers Ireland Corporate Social Responsibility

Awards. “This was a proud moment in that it reflects howfar the sustainability agenda has come in recent years andhow it is being considered in the social context.

“From a technical perspective, the Citi New EnergyInitiative represents a landmark achievement for which I amvery proud and whilst it is still in its infancy and we areironing out a few creases, I look forward to the futurebenefits,” Boylan adds.

The greening of Citi’s Dublin HQ has been financiallyworth it, Boylan says. However, he points out that not allsuch initiatives have to cost money, especially in the initialstages. He advises organisations looking to pursue greenagendas to first get their house in order with a minimum20% reduction in consumption before investing in greentechnologies: “While this may extend the payback period,it follows that in most cases, an organisation will benefitconsiderably more by getting their initial consumptionprofile in order. Without doubt, new green technologiesand renewable energies are reducing environmentalimpact. However, these alone cannot address climatechange. It is imperative that such technologies are notused as the silver bullet solution or a licence to consumemore,” he adds.

And Boylan’s view on his nickname? “Personally I don’tmind. It was a tag that I was quite happy with and lookingback, it makes me smile,” he says. “The mere fact thatemployees referred to me as the Jolly Green Giant meantthat the message was getting through and that they wereaware of sustainability”.

From a technicalperspective, the CitiNew EnergyInitiative representsa landmarkachievement forwhich I am veryproud

“

”

Overseas partnerships: Citi is partnering with its colleagues in the UK offices to deliver a new lighting solutionthat is likely to reduce lighting-related energy costs by some 75%. It is also looking at smarter data centresolutions with the growth of cloud technologies.

Project CEIST (Citi Environment Initiatives, Solutions and Tracking): CEIST, the Irish for ‘Question’, was a projectaimed at further exploring opportunities across the board - from energy, waste and water to even spacemanagement. As CitI’s building ages and the need for equipment replacement becomes more common, newopportunities to enhance performance will surface. “What CEIST has taught us, more than anything else, is thatthere is always room for improvement!” says Boylan.

Out of Hours initiative: Citi revised its building services to confine the provision of heating, ventilation and airconditioning (HVAC) and normal lighting services to between 7am and 6pm Monday to Friday. Those requestingenergy services outside normal working hours are required to log a request and accept the associated energycosts on a ‘pass through’ basis. Although challenging at first, this immediately resulted in comprehensive energysaves. In other ways, it changed the operating regime in the bank where department managers weighed theneeds rather than taking energy availability for granted.

The Green Team: providing an opportunity for Citi employees to participate in various green initiatives.Environmental Expo: inviting up to 40 exhibitors to their premises to enlighten employees in ways to be green athome as well as at the workplace. This proved extremely successful with Citi employees seeking to be a part ofour greening activities and also encouraged them to think about how their own activities could be done differentlyto minimise their environmental footprint.

Human Resources introduced travel initiatives such as the Tax Saver scheme: an incentive for employees to usepublic transport and Bike to Work - a tax-incentive scheme that aims to encourage employees to cycle to andfrom work. To accommodate this, CRS ‘sacrificed’ a number of car parking spaces to make way for cyclist parkingand built a cyclists’ locker room and shower facility.

OTHER CITI SMART STRATEGIES

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Visitors to Dublin’s International Financial Services Centreare as likely to observe financiers flying by on their bikesas in their BMWs.

It is not at all unusual to see a suited and bootedexecutive dispense with the car in favour of grabbing abike to cross the city for meetings. Dubliners have defiedthe critics who said a scheme modelled on the Paris Velibrental scheme would never work here. Instead, they havetaken to their rental bikes like ducks to water.

The Dublin Bike Scheme is a self-service bike rentalsystem open to everyone from 14 years up. It was createdin 2009 with 450 bicycles supplied to citizens. Thescheme has been such a runaway success that it iscurrently being expanded to 5000 bicycles, including newbike stands in the International Financial Services Centre(IFSC).

The bikes add to the community spirit in the IFSC andDocklands which already hosts many fun events forcitizens including the annual Docklands Summer Festival,an annual Oktoberfest inspired by the Germans beerfestivals and a tall Ships Festival that draws internationalvisitors. Plans are also afoot to develop Dublin port as acruise terminal.

The provision of extra bikes will complement existingbus and light rail services that run through the IFSC, andwill be part of a wider ‘Greening the IFSC’ effort.

Through the Green International Financial ServicesCentre (GIFSC) initiative, and in cooperation with theSustainable Energy Authority Ireland, nine chief executiveshave signed up their organisations, which collectivelyemploy some 8,000 people, to reduce their energy usage.Collectively, these companies had an energy bill exceeding€5 million in 2011. This pilot scheme will be expanded to

include additional companies in the coming months andyears in a bid to ensure that the IFSC is one of the mostresource efficient financial services centres anywhere inthe world.

The IFSC is situated within a Sustainable EnergyCommunity, which is one of four national exemplars of bestpractice. The city and partners are developing a GIS map ofenergy usage across the docklands area to highlight bestpractice and energy opportunities. Next steps include thecreation of energy partnerships between businesses.

This development of best practice is also informingthe future of the docklands through the SpecialDevelopment Zone (SDZ) planning designation. This SDZwill set binding criteria on development, allowing the citya unique opportunity to lay the foundations for a citybuilt for the future. The addition of profile green buildingswill further strengthen the attractiveness of the IFSC as aplace to live and work.

Longest urban tunnel in EuropeDublin City has been investing in the infrastructure tocreate a sustainable city including the construction of thelongest urban tunnel in Europe that leads trucks from Dublin port to theoutskirts of the city near the internationalairport. This facility, combined with a banon big lorries in the city centrecontributes to excellent air quality in thecity. The ban has also improved safety forcyclists, contributing to a resurgence ofcycling.

Dublin City Council getson its bike to deliver agreener economic future

In Dublin we havehad an explicitlystated sustainabilityapproach to citymanagement since2008



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In Dublin we have had an explicitly statedsustainability approach to city management since 2008.This approach is encapsulated in the City DevelopmentPlan that has a 30-year vision of how Dublin will developsustainably.

It provides a framework that allows for the coherentmanagement of economic, environmental and socialprogress. The city is also proactive and was one of thefirst in the world to respond to the Carbon DisclosureProject Cities Programme. Our progress in achieving ourgoals is measured in our annual Sustainability Report andIndicators, accessible on our website.

A small city with big ideasDublin is a small city with big ideas. As the in one of themost open economies in the word, we are quick torespond to international trends and to seize newopportunities. Forbes ranks Dublin in the top 10 in theworld for ease of doing business. To support the greeneconomy as a specific growth opportunity, a number ofpublic, private and academic partners came together tocreate a cleantech cluster called The Green Way. Thecluster has successfully trialled new technologies in thecity and helped indigenous companies win internationalrecognition for their innovations. In addition to being afounder member of The Green Way, Dublin City University

has created the DCU CleantechInnovation Campus. Located to thenorth of the IFSC, the campus will serveas a launchpad for innovative cleantechcompanies.

IFSC is lifeblood of the cityThe IFSC is a major part of the lifebloodof the city and, with its striking skyline,is a major attraction for those comingto live and work in Dublin. Recognisingthis, Dublin City Council was an early

supporter of GIFSC in its bid to strengthen the IFSC bycapturing a lead in environmental finance because it helpsgenerate wealth but also builds capacity within the city toanalyse risks and opportunities in the wider greeneconomy. We are already home to venture fundsspecialising in this sector, and see the value in creatinglinkages between Dublin-based enterprises and financeproviders.

This capacity building has been accelerated throughnew academic courses in the local universities, such as anMSc in Sustainable Energy Finance, largely delivered byindustry experts.

On the governmental side there is also great progressbeing made to leverage huge opportunity in the retrofitmarket to create jobs and business opportunities with aNational Energy Efficiency Fund established, seeding agrowth in Energy Performance Contracting (EPC) andEnergy Services Companies (ESCOs).

Maximising use of ICTAs the world becomes more connected, Dublin is workingwith industry partners to optimise our use of informationand communications technology (ICT) to manage the city.For example, we are working with IBM on water pressure

management, on transportation and traffic flow, and withIntel on using sensors and mobile phone apps to predictand manage flooding.

And, to ensure a level playing field for all stakeholderswho want to contribute to making the city work betterfor our citizens, an open data platform has been created.

Dublinked.ie was developed with regional partners tobe a respository for data generated in the city, data whichcan then be used by entrepreneurs, innovators andestablished businesses to create solutions for Dublin andbeyond.

In essence, Dublin is promoting itself as a test-bedand living laboratory. The city is large enough to berelevant but small enough to be agile.

Take, for instance, the recent enabling of demand-side energy management in the domestic context. GlenDimplex, an Irish multinational which employs some10,000 people globally and is the world’s largestmanufacturer of electrical heating systems. It worked withThe Green Way and the Housing Departments of theDublin City and Fingal local authorities to install heatingsystems that can be controlled from the grid.

This and other technologies will not only allow fornew tariffs but will enable increased penetration ofrenewables on the grid.

Since 2009 these solutions and the many othersarising from the research activities of Dublin’s Universitiesare showcased at the annual Innovation Dublin Festival inthe autumn.

So, whether you are arriving to the Docklands by seaor from the airport via the port tunnel, the city looksforward to welcoming you and to working together for aprosperous and sustainable future.

The IFSC is a majorpart of the lifebloodof the city and, withits striking skyline,is a major attractionfor those coming tolive and work inDublin

Mark Bennett,Green Business OfficerDublin City Council

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2,000 cars, 104 Olympic-sized swimming pools and 23million beer cans have something in common. Theyamount to the related savings in carbon emissions,water and aluminium in 2012 alone thanks toGuinness owner Diageo’s journey to environmentalsustainability in Ireland.

The home of Guinness is set to become one of theworld’s most environmentally sustainable breweries.Diageo, which counts the famous Irish stout as the core ofits Baileys-to-Smirnoff-to-Johnny Walker drinks stable, isinvesting €168 million ($217 million) to construct “a new

brewing centre of excellence” at St.James’s Gate in Dublin as part of its“from grain to glass” sustainability focus.

The new brewery, employing hightech environmental managementtechniques, is also looking to identifyan alternative renewable energy supplywith the aim of further transforming its

carbon footprint to deliver an 80% reduction in carbonemissions. It also aims to improve water efficiency bymore than 30% and have zero waste to landfill from Irishproduction by 2015.

“We are proud of our long history at St. James’s Gatein the heart of Dublin. A city centre location creates somechallenges and many opportunities. The challenges aremainly associated with the redevelopment of an existingbrownfield operation. We have worked closely withDublin city authorities and the neighbouring communitiesto understand their perspectives and ensure that these aretaken into account in the design of our new brewery,”said Dave Fitzgerald, Environmental Programme Managerfor Diageo Europe Beer Supply.

“In many ways St. James’s Gate is the best locationfor our brewing operations. From a logistics perspective,we are in the heart of Dublin, close to more than aquarter of our consumer base. We are also wellpositioned for Dublin port, which is essential for ourexport operation. We create employment in the centre ofthe city and continue to make a positive impact on thecommunities around the brewery, so remaining at St.James’s Gate is the most appropriate investment strategyfor our business.”

“The footprint of the Diageo business is hugelyimportant to the Irish economy,” Fitzgerald toldResponsible Investor. Diageo Ireland, which employs morethan 1,500 people, exports over €1 billion ($1.3 billion)in goods per annum and the value to the rural economyof annual purchases by Diageo Ireland is more than €270million. Diageo purchases over 13% of Ireland’s totalannual domestic production of barley (used to make itsbeer and whiskey brands), while 250 million litres of freshIrish milk (10% of Ireland’s cream production) is used toproduce the cream in the manufacture of Baileys CreamLiqueur.

The homeof Guinnessis gettinggreener

In many ways St. James’s Gate is the best locationfor our brewingoperations ”

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More than 80% of the ingredients and packagingused to make this liqueur is sourced from Ireland. Baileysalso recently piloted a sustainable agriculture partnershipwith its key cream supplier, which “aims to set the higheststandards for quality assurance, animal health andwelfare, carbon, biodiversity, water, and health and safetyon 4,300 farms”, says Diageo.

“Sustainability is at the heart of [our] businessoperations and is key to its future success,” says theglobal drinks giant, which has launched greening projectsacross carbon, water, waste and packaging, as well as itssuppliers and people.

“At Diageo we are aiming to reduce our carbonemissions by half in absolute terms, which has meantchanging the relationship between production and the useof fossil fuels,” said Fitzgerald. “Through a variety ofactivities, we have been able to grow our business whilereducing our carbon emissions, as well as our risk exposureto energy insecurity and rising costs.” Projects includeimproving energy efficiency in their operations, generating

renewable energy at their sites, sourcingrenewable or low-carbon energy, andworking with business partners toreduce carbon from distribution.

Some of Ireland’s plug points arealready powered by the roughly 250-year-old St. James’s Gate Brewery,which meets its own steam and

electricity demands through a Combined Heat and Power(CHP) system and exports surplus electricity to thenational grid. Since 2007, the brewery has reduced itswater usage by 26% (700 million litres or 280 Olympic-sized swimming pools) and it has reduced its total carbonemissions by almost 6,000 tons, a 12% reduction.

The carbon footprint of Diageo’s other Irish sites -including the homes of Baileys and the historic BushmillsIrish Whiskey - has also been reduced thanks to thepurchase of electricity from renewable generationsources. Total carbon emissions have been reduced byover 16,000 tons since 2007, a 19% reduction or theequivalent of taking more than 4,000 cars off the road. In2012 alone, carbon emissions were reduced by 8,000tons, a 10% reduction or equivalent to taking more than2,000 cars off the road.

Diageo’s strict water management procedures acrossits Irish sites has seen it reduce its water usage since 2007by 28% or 1.3 billion litres, and by 260 million litres in2012. Meanwhile, 99% of its waste and co-products arediverted from landfill through segregation, re-use andrecycling, and its Irish production sites have reducedwaste to landfill by 89% since 2007.

Participation in the Repak initiative has also seenDiageo support the recovery and recycling of aluminium,glass and cardboard packaging materials. The use of‘down-gauging’ (reducing the weight of a can) has saved315 tonnes of aluminium (enough to make more than 23million standard-sized beer cans), and bottle lightweighting has avoided using 1,300 tonnes of glass since2009 (equating to almost 6 million standard glass bottles).

Diageo is embedding sustainability in its businessplanning, and putting its money where its consumers’mouths are.

At Diageo we areaiming to reduceour carbonemissions by halfin absolute terms

“

”Croke ParkThe stadium and headquarters of the Gaelic Athletic Association (GAA) is the venue forthe annual All-Ireland finals in Gaelic football and hurling. It is Europe’s fourth biggeststadium with a capacity of 82,300…and one of its greenest. Following majorredevelopment work, in 2008, the venue introduced an ‘on and off the pitch’ policybased on three key pillars of sustainability: 1) Environment, 2) Social, 3) Economic.In practice, this focuses on key annual objectives such as reduced energy consumption,increased recycling, community engagement and encouraging environmentallyresponsible development and staging of events. In May 2009, Croke Park achieved ISO14001: 2004 environmental management system certification. In 2010, it became thefirst stadium in the world to be certified BS8901, the first standard to specify asustainable management system for industry and designed specifically for the eventsindustry.It has since upgraded this to the ISO 20121 standard in 2012.

The Aviva StadiumDublin’s association football and rugby home as well as a major concert venue is nowalso certified to BS8901 level and operates as a sustainable venue. It refers to its 3pillars of sustainability: economic, environmental and social impact as the 3 P’s: profit,planet and people.In 2012, the stadium’s environmental achievements included less than 2% of matchday staff using private vehicles to get to the stadium. Annual onsite recycling reacheda rate of 75% and the stadium’s waterless urinals and rainwater harvesting saved itseveral million litres of water. Electricity and gas consumption were down between2010 and 2011 by 26% and 48% respectively.On the social front, Healthier cooking regimes for food items and diverse menuofferings including salads and seafood as well as water options throughout.Supporting the national campaign of 20% carbon emission reduction by 2020.All protein and dairy products sold at the stadium are nationally sourced supportinglocal and national employment as well as the Irish Economy

The Convention Centre DublinIreland’s first purpose-built convention centre is also the world’s first such carbonneutral constructed venue. Its green ‘foundations’ are built upon via a long-termenvironmental sustainability policy in accordance with the International StandardsOrganisation (ISO) 14001. This includes recycling (the CCD achieved a recycling rate of 95% in 2012), watermanagement, and a focus on reducing overall energy consumption by using asustainable energy supplier and integrating sustainable systems at the venue. Theseinclude a thermal wheel heat recovery system and an Ice Storage Thermal Unit (ISTU),which chills water overnight to form large ice blocks that melt during the day toprovide air conditioning for the entire building. The centre also commits to usesuppliers and sub-contractors who are “environmentally aware”, wherever possible. Italso has a policy to buy products and services that have minimal or beneficial impacton the environment. If you visit the Convention Centre you are encouraged andadvised on how to use public transport, and you may pass one of its employees ontheir way in by bike under its “Cycle to Work” scheme!

Painting the city green: some of Dublin’s other major sustainable landmarks

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Ireland

Best Workplaces 2012

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Ireland is home to a cluster of specialist asset managersin environmental finance - and fast gaining areputation as the leading green finance centre globally. When Johnny Cash penned his song Forty Shades of

Green, he was talking about the colours of the Irishcountryside. He could hardly have envisaged that Irelandwould within 50 years be known not just for its green fieldsbut also increasingly for green finance.

Rising global environmental awareness has spawned anew industry that musicians and financiers could scarcelyhave imagined fifty years ago.

Global clean energy finance and investment stood at$269bn in 2012 and this growth shows no signs ofabating. In fact, Bloomberg New Energy Finance recentlystated that some $650 billion per annum will be spent in

this sector by 2030.So, there are opportunities aplenty

for a country like Ireland which hasunrivalled expertise in both therenewable energy and funds sectors aswell as the good fortune to be a greenand pleasant place to conduct business.

And it is that opportunity which theIrish Government and the private sectoris seeking to capitalise on. It hasrecognised the importance of the greeneconomy and the role of environmentalfinance in the transition to a low carbonmodel.

Green International FinancialServices Centre (GIFSC) is the centre of

the Irish government’s environmental finance thinking.GIFSC is an output of the Clearing House Group of theDepartment of an Taosieach (Irish Prime Minister), apublic/private initiative tasked with the positioning andpromotion of Ireland as the world’s leading centre forenvironmental finance.

With four distinct pillars – optimum businessenvironment, talent, resource efficiency and assetmanagement – GIFSC is dramatically accelerating thegrowth of this sector.

Having laid the foundations across the first three pillars- facilitating a number of tax changes to optimise the

business environment, investing close to $1 million in newthird-level educational courseware and launching the‘Greening the IFSC’ initiative to ensure the InternationalFinancial Services Centre in Dublin is one of the mostresource efficient centres anywhere in the world - GIFSC isnow focusing on its fourth pillar, growing green assets.

Ireland’s opportunityIreland has a unique opportunity to become a major centrefor green asset management due to a combination offactors which make the country attractive to domestic andforeign funds.

The scale of that opportunity is so big that we believewe can grow the green asset management business inIreland from $20 billion at the moment to $200 billion by2017 creating up to 900 new jobs in the process.

Ireland is in a very strong position to grow its green asset management business for a number of reasons.Firstly, there is a heightened global awareness of the needto move towards a more sustainable, low carbon economicmodel, particularly in the energy sector.

Global annual spending on green investments is rising.Investors in the sector include pension funds, life assurancefunds, family offices, sovereign wealth funds, largecompanies and high net worth individuals seeking greeninvestment opportunities.

Secondly, many Irish companies have successfullydeveloped sustainable projects on a global scale resulting ina large pool of talent available to support greeninvestments here – Mainstream Renewable Power, GlenDimplex, NTR, Airtricity to name a few.

Thirdly, Ireland already has one of the mostsophisticated investment management industries globally.Many of the world’s leading fund managers and fundadministrators are already based in Ireland. This has helpedbuild a large pool of fund management talent in Irelandwhere we have unrivalled expertise, with some 12,000professionals employed by over 60 world class serviceproviders.

Crucially also, the Government is very supportive ofGIFSC and the funds industry generally.

A NEW BREED of asset manager

Ireland has a unique opportunityto become a majorcentre for greenasset managementdue to a combinationof factors whichmake the countryattractive todomestic and foreign funds.

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The Government’s Action Plan for Jobs 2013highlights the fact that Ireland’s natural environment,coupled with its strong research base and a numberof leading-edge companies, "provides us withextensive opportunities for development of the GreenEconomy in areas as diverse as renewable energy,sustainable food production, tourism, environmentalresource management, "Green" financial services, andresource and energy-efficient products and services".

A 2012 report from chartered accountants Ernst& Young said that cleantech could deliver valuableeconomic benefit to Ireland including helping thecountry tackle its energy challenge and secure reliableand affordable supplies for the future, by improvingdomestic energy security and mitigating againstsignificant prices risks.

Barry O’Flynn, Director of Environmental Financeat Ernst & Young in Dublin, explained that givenIreland’s and other countries’ increasing demand andplans for renewable energy and energy efficiency “theIFSC can be the conduit for this domestic andinternational capital.”

Christian MacManus, Partner, Audit InvestmentManagement at Deloitte in Dublin, takes a similarview.

“Green and Socially Responsible Investment Mandateshave shown significant growth over the past 12 months -

the GIFSC has been instrumental in thepromotion of Ireland as the strategichub for capital raising and distributionof this asset class,” he said.

Deloitte works with asset ownersand managers in many industries toprovide access to funding for Green andSocially Responsible investments. “Wefind that this asset class is providingtailored solutions and delivering longterm sustainable value for investors,”MacManus added.

In short, we have the uniqueadvantage of having a world class fundsindustry coupled with a world classrenewables sector and a very supportivegovernment with a strong greeneconomy policy agenda.

Little wonder then that global companies areturning to Ireland in significant numbers tomanage their green assets. One example isfinancial powerhouse BlackRock. BlackRock has set up its renewable power investmentgroup in Ireland with key renewable power principals fromIrish operator NTR joining the BlackRock AlternativeInvestors (“BAI”) investment platform.

Blackrock manages a fund which has acquired twoIrish windfarms from Element Power, the global renewableenergy developer. Blackrock has acquired the 9.2 MWGarrannereagh wind farm in Co. Cork and the 36MWMonaincha wind farm in Co. Tipperary.

The transactions, which were completed on 7December 2012 and 27 March 2013 respectively, markedthe first collaboration between the two parties.

Jim Barry, Managing Director at BlackRock and aformer ceo of NTR, commented: “We are pleased to haveinvested in the Irish wind energy sector and in particularthe Garranereagh and Monaincha wind projects representan exciting investment opportunity for BlackRock’s clients.We look forward to developing our relationship withElement Power, an experienced international developer inthe renewables sector”.

Commenting on the deal at the time, Tim CowhigCEO of Element Power Ireland said, ‘It is important toshow that wind energy can play a significant part in anyinvestment portfolio and that wind is now part of theestablished energy portfolio. This transaction also showsIreland Inc is open for business and that the worst of theturmoil in the financial markets of the last number ofyears is now behind us’.

Closer to home, Greencoat Capital is a top-fiveEuropean cleantech and renewable investment fund. It issupported by leading electricity provider ESB.

Another Irish-based asset manager in this spaceincludes Kleinwort Benson Investors. Since 2000 KBI has been pioneeringenvironmental investment strategies andwas one of the first investment firmsglobally to launch separate Water andRenewable Energy Funds, a product line-up that now includes Agribusiness andCleaner Solutions and assets totallingsome $1 billion.

Steve Falci, Head of Strategy inSustainable Investments, Kleinwort BensonInvestors, Dublin has been reported assaying: “We are based in Ireland because italready has a world-leading funds industry and it offers usaccess to the talent we need to grow our business. We areincredibly optimistic about this sector and see the potentialfor Ireland to be the global leader in green funds – and in arelatively short space of time.”



We are based inIreland because italready has aworld-leadingfunds industry andit offers us accessto the talent weneed to grow ourbusiness

In short, we have the uniqueadvantage of havinga world class fundsindustry coupledwith a world classrenewables sectorand a verysupportivegovernment with a strong greeneconomy policyagenda.

“

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Examples of other asset managers operating fromIreland include Gaelectric Holdings plc which was foundedin Dublin in 2004 by Irish individuals through a jointventure of real estate, private pension funds and technicalwind expertise and has established a track record ofreaching the highest standards in all aspects of the windfarm value chain.

Former Bord Gais CEO, John Mullins,is launching a new Qualifying InvestorFund focused on solar PV investments inthe UK and France. The fund will becalled the Global Solar Income Fund andthe fund has targeted the London andDublin markets with an initial target of$130.5m (€100m) of funding. Irishstockbroking, wealth management,asset management and financialadvisory services firm Davy will be theInvestment Manager and Mullins’company Amarenco will be theInvestment Advisor. The fund willprovide an attractive annualised yield to

investors in solar investments in stable markets. The seniorAmarenco team has over 100 years of renewable andenergy experience. Arthur Cox and KPMG are advisors tothe fund whilst Investec and DHKN Wealth Managementare sponsors of the fund.

Speaking about the imminent launch, Mullins stated:“Amarenco is delighted to headquarter this fund at theGIFSC and believe that this fund will be the first of many inDublin. We expect to employ over 20 people over the nextthree years. Amarenco will structure all investments for theInvestment Manager, Davy and the company will performan ongoing asset management role to maximise return toinvestors in the Global Solar Income Fund.”

The pace of launches is gathering. What this all meansis that Ireland is now home to $20 billion in assets held inrenewable or environmental finance funds and fast gaininga reputation as home to a cluster of specialist assetmanagers.

$20 billion may not seem significant until oneconsiders the creation and growth in Ireland’s fundsindustry. The last time the Irish Government experienced adomestic crisis back in the 1980s, it spawned the conceptof the international financial services centre. Today, the Irishfunds industry administers some $3 trillion (€2.2 trillion) -from a standing start just over 20 years ago –demonstrating that when the Irish Government puts itsmind to something, it really commits to it.

The green asset management sector is just one part ofIreland’s very exciting global funds management industry.Last year, Ireland’s fund industry reached a number ofsignificant milestones. The assets of Irish domiciledinvestment funds passed the €1 trillion mark for the firsttime – up 40% from the end of 2009, according to figuresfrom the Central Bank of Ireland. Total assets underadministration passed the $2.6trn (€2trn) mark for the firsttime and currently exceed $3trn (€2.2trn).

Against that background, I am confident that we willreach our 2017 target of having $200 bn (€153 bn) ingreen assets managed or serviced from Ireland.

I believe that Ireland is the natural choice for greenfinance. A new breed of asset manager is being born andIreland is the incubator.

The pace oflaunches isgathering. Whatthis all means isthat Ireland is nowhome to $20billion in assetsheld in renewableor environmentalfinance funds

Stephen Nolan,Executive Co-ordinator Green International Financial Services Centre

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BlackRock Alternative Investors Renewable Power GroupBlackRock is committed to building a long-term, worldclass renewable power investment business and hasestablished a dedicated and industry experiencedrenewable power team and business unit headquarteredin Dublin with additional team members in London andNew York. BlackRock Renewable Power is sponsoring afund which is targeting up to $1.5 billion of capitalcommitments (the "BlackRock NTR Renewable PowerFund"). This fund will be managed (and partiallydomiciled) from the Dublin headquarters (withappropriate international support).

The BlackRock Renewable Power team includesprofessionals with extensive experience in renewableenergy and in particular wind power projects. The core ofthe team comes from NTR plc which was founded in1978 to develop infrastructure assets in Ireland. NTRsubsequently diversified to focus on renewable energy,both domestically and internationally, and has owned,operated and developed c.4GW of renewable energyassets. NTR has also managed over $5.5 billion ofcorporate finance transactions and over $2 billion ofstructured finance transactions. Most notably, NTR wasthe majority shareholder in Airtricity which developedsignificant wind assets in Europe, the US and Asia prior toits sale to E.ON and Scottish & Southern Energy in 2008.The Dublin office has more than 25 employees.

BNRG RenewablesBNRG Renewables Ltd is an Irish headquartered Solar PVdevelopment company with headquarters located inDublin. BNRG develops and constructs utility scale solar PVparks for placement with pension funds and institutionalinvestors.

The company developed the ability to spot opportunitiesand to gain early mover advantage in attractive PV marketsoutside the "Big 4" markets of Germany, Spain, France andItaly. BNRG has strong relationships in the solar PV sector inEurope in the areas of funding, technology and supply chain.These links, together with a constant emphasis on marketresearch, strong set of in-house skills specific to the whole PVsolar permitting and development cycle mean that BNRG hasan understanding of the European solar PV market at astrategic level that is unique.

Headquartered in Ireland, BNRG also has offices inCheltenham in the UK and Miami, USA.

GaelectricGaelectric Holdings plc (“Gaelectric” or the “Company”)was founded in Dublin in 2004 through a joint venture ofreal estate, private pension funds and technical windexpertise. Gaelectric has established a successful trackrecord of reaching the highest standards in all aspects ofthe wind farm value chain through its team comprising ofindividuals with a proven track record in the industry.

Gaelectric engages in renewable power generationand energy storage. It develops wind farm projects inNorthern Ireland, the Republic of Ireland, and NorthAmerica. Gaelectric’s business model is to createshareholder value through the early stage of ownership ofonshore wind farms, bringing these projects throughplanning, grid connection, financing, construction andcommissioning, while adding value at each stage.

Gaelectric has a number of onshore wind farms atvarious stages of development in Ireland and the UK andalso has a significant pipeline under development assets inthe US, particularly in Montana.

The Company is based in Dublin and has additionaloffices in Dublin, Belfast, Chicago and Great Falls inMontana.

Glen DimplexIn 1973 Glen Electric was established by Martin Naughtonand four colleagues in Newry, Northern Ireland. Thebusiness commenced manufacturing oil-filled radiators,with just seven employees.

Dimplex was acquired in 1977, a company eighttimes Glenʼs size, and a brand leader in electric heating.Today the Glen Dimplex Group is the undisputed worldleader in intelligent electric heating and renewable energysolutions, as well as holding significant global marketpositions in domestic appliances, cooling and ventilation.

Glen Dimplex is a global leader in the developmentand delivery of highly-efficient, multi-product, multi-energy solutions for space and water heating, ventilation,heat recovery and energy management with a dynamic portfolio of leading brands and low carbon technologies.

A New Breed of Asset Manager CASE STUDIES

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Excellence means in-depth sectoral expertisewith arthur cox you can expect sound judgment and advice. You can expect in-depth sectoral expertise that will find new solutions to secure your success. You can expect a total commitment to your business – a genuine partnership that gives you the confidence to move forward and embrace new opportunities. With Arthur Cox you can always expect excellence.

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Across the world these innovative low carbon systemsenable customers to reduce CO2 emissions and cost(saving on fuel, saving on maintenance, saving on parts).

The Group has manufacturing and sales operations ina number of countries, including the US, Canada, Japan,Australia, New Zealand, China and mainland Europe andhas over 8,500 employees across four continents. TheGroup’s head office continues to be located in Dublin andDunleer.

Kleinwort Benson InvestorsKleinwort Benson Investors is an established institutionalasset manager with headquarters in Dublin, Ireland, and ispart of the Kleinwort Benson Group.

Kleinwort Benson expects the key investmentdrivers over the next 20 years to include the world’schanging demographic profile, scarce naturalresources, and sustained pressure for lower carboneconomies. Since 2000 Kleinwort Benson has beenpioneering environmental investment strategies andwas one of the first investment firms globally to launchseparate Water and Renewable Energy Funds, aproduct line-up that now includes Agribusiness andCleaner Solutions.

Kleinwort Benson Investors has built up considerable knowledge and expertise in managinginvestments in these areas. The Environmental StrategiesTeam consists of a dedicated team of portfolio managersand analysts based in a single location in Dublin. 51professionals are involved who are motivated to grow thebusiness.

Mainstream Renewable Power Following the sale of Airtricity in 2008 for €1.8 billion,Eddie O’Connor and Fintan Whelan co-foundedMainstream Renewable Power Limited (“Mainstream” orthe “Company”) to be a leading renewable electricitydevelopment company.

By way of background, Airtricity was sold in 2007 byEddie O’Connor and from its early days as an Irish start-upit became a windfarm developer and owner-operator on aglobal scale, with operations onshore and offshore inEurope, the US, Canada and China. It also had electricitysupply businesses in Ireland and the UK, with the relatedtrading and risk management functions. The sale ofAirtricity realised value of €1.36 billion.

Airtricity acted as a training ground in key skills in therenewable energy sphere and its influence through itsformer employees can be seen across the wholerenewable energy industry in Ireland today. This can bemost clearly seen within the Mainstream team, as many ofthe old Airtricity team (both in Ireland and overseas)joined Eddie O’Connor in his new venture.

Mainstream currently employs over 100 people inseven countries, the majority of whom work indevelopment and technical services, supported by centralfinance, HR and legal functions.

NTRFounded in 1978 to develop and operate Ireland’s first tollroad, NTR has grown and diversified throughout the lastthirty years by building on a strong entrepreneurial andproject development heritage. NTR believes in the growthopportunities that exist in the renewable energy andsustainable waste management sectors and, therefore,has identified these sectors are core platforms for theGroup.

NTR holds 97% of the Wind Capital Group which isbased in the American Midwest and is quickly becoming aleading wind developer in the United States. Since itsfoundation in 2005, Wind Capital Group has developedan ambitious pipeline of wind farm projects across thecentral United States. It is committed to harnessing aclean, renewable source of energy - creating jobs,generating economic opportunity and building a strongfoundation for domestic energy independence. Thecompany developed America’s first 100% wind-poweredcommunity in Rock Port, Missouri.

Headquartered in Dublin, Ireland, NTR’s businessesextend across Ireland and the USA.

OpenHydro Group LtdIt was announced earlier this year that French navaldefence and energy company DCNS is to spend in theregion of €130m to gain a majority stake in the Irish tidalenergy company OpenHydro, which makes turbines togenerate electricity from tidal streams.

The Irish company, which will retain its team andbrand, was founded in 2004 and currently employs 90people.

OpenHydro has developed a turbine that is capable ofgenerating renewable energy from tidal streams.

The company has formed commercial partnershipswith electricity suppliers to develop tidal farms in Europeand North America. For instance, it has been workingwith the French utility giant EDF since 2011 to installturbines as part of a tidal installation off the coast ofPaimpol-Bréhat in France.

OpenHydro is also working with SSE Renewables toinstall turbines in the Pentland Firth, Scotland.

Last October, OpenHydro and Irish energy providerBord Gáis were awarded a lease to develop a 100MWtidal energy farm off Torr Head in north Co Antrim.n



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10 Irish cleantech facts• Irish cleantech companies are developing and actively

engaged in rolling out more than 20 GW ofrenewable energy across the world

• Ireland has binding EU targets in place to deliver 16%of its overall energy from renewable sources by 2020

• 40% of Ireland’s electricity will be met fromrenewables in the next six years.

• Ireland has the highest wave energy resource in Europe,with an estimated generation capacity of 60 GW.

• 90% of Ireland’s national territory is offshore.• The standard form of measurement of wave energy is

the Beaufort Scale, developed by Irish mariner FrancisBeaufort in 1805.

• According to Cleantech Group and WWF, Ireland wasnumber one in the Eurozone for the commercialisedcleantech innovation

• Irish company Glen Dimplex is the worlds largestelectric heating business

• Irish company Airtricity was sold in 2006/7 for morethan $2 billion

• Irish company Mainstream Renewable Power isEurope’s leading offshore developer, with portfolios inScotland England and Germany. It is also developingonshore projects in Canada, Chile, South Africa andthe US.

Source: GIFSC

10 Irish funds and internationalfinancial services facts• Ireland services a total of $3 trillion in assets• Ireland is the number 1 centre for hedge funds in the

world servicing more than 40% of the globe’s assets• Ireland is the fastest growing UCITS centre in the

world – up 500% in the past 11 years• The Irish stock exchange is the number one in the

world for the listing of investment funds• A study carried out by the Heritage Foundation has

found that Ireland has currently the freest economy inthe whole of the euro-zone

• Ireland was the first centre in Europe to provide forregulated hedge funds

• Ireland is the largest provider of cross border lifeinsurance in the EU with premiums in excess of€16bn

• Ireland is the first internationally distributed fundscenter to reach agreement on FATCA

• Ireland is the globe’s leading centre for aircraft leasing- all of the top ten aircraft lessors operate in Ireland

• Ireland is rapidly developing a cluster ofenvironmental finance asset managers and has said itwill increase ‘green’ assets from $20 billion to $200billion by 2017

Source: GIFSC

Focusing on business critical news and data,Responsible Investor is the only dedicated newsand events service reporting on responsibleinvestment, ESG and sustainable finance forinstitutional investors globally.

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“Responsible Investor isrequired reading.”

Anne Simpson, Senior Portfolio Manager, Director,

Global Governance, CalPERS (USA)



Steve Falci: Kleinwort Benson Investors is the formerDublin arm of KBC Asset Management and we are nowowned by Brussels-based holding company RHJInternational. In the broadest sense, we are an Irish firmdating back to 1980. For the first 20 years of ourexistence as Ulster Bank Investment Managers, we servedthe Irish institutional investment community primarily asa balanced manager. In 2000, we made the strategicdecision to become more of an international player andcreate specialist investment products for the institutional

market place. Key to this decision wasa focus on long-term trends whereinvestment opportunities might bedriven not for a cycle but by long-term‘mega trends and we began toconstruct strategies around the themeof resource scarcity.

Basically there is a supply anddemand imbalance for food, waterand energy. On the one hand, a worldpopulation of seven billion people,which has more than doubled sincethe middle of the last century, isprojected to grow to more than ninebillion by mid-century. The demand forfood, energy and water is increasing ata greater pace than the population.From the supply side water is finite. On a planet that is covered with water,less than one% of the world’s water isuseable. Farmland already uses about38% of the earths land, so arable land for farming isconstrained and energy is constrained

because fossil fuels are a finite source and carbonemitting. We need to find a way to be able to provideenergy, food and water for close to 2½ billion morepeople by mid-century while reducing carbon emissions and mitigating the impact that pollution and climate change will have on the provision of foodand water.

RI: What is your investment strategy within these themes?

SF: Our strategies are long-only, publicly traded equities,focused on companies providing solutions to the vitalresource challenges across food, water and energy.Environmental and resource solutions are a niche wespecialize in and we were one of the earliest players inthis specialist space, having launched our Water andAlternative Energy Strategies in 2001.

RI: You’ve been involved in education initiatives atDublin City University (DCU) around some of thesebig picture themes. Can you expand on this?

SF: We have been very happy to support the educationinitiatives of the Green IFSC. Kleinwort Benson Investorssupported my participation in the evaluation of the initialcurriculum for the DCU Certificate in Sustainable Financewhich has now grown into a full blown Masters.Additionally, I and Colm O’Connor, one of our renewableenergy portfolio managers, have guest-lectured atUniversity College Dublin’s Smurfit Business School, whichlaunched a Master of Science in Environmental Financelast September? Those activities are part of the ways thatwe support these education programmes.

RI: Are your institutional investors mostly public or private pension funds?

SF: It’s a mix and our business is global. I have talked aboutthe environmental strategies, but the other specialist areawhere we have developed a strong reputation and trackrecord is in our Dividend Plus Strategies, which employs aunique approach to high dividend investing across globaldeveloped and emerging markets. We have corporatepension clients in our Dividend Plus Strategy in Ireland andthe UK as well access to defined contribution schemes inthe US through platforms in the US and through Virtus ourstrategic partner in the US. We also have had successamong public funds in the US and UK.

Steve FalciHead of Strategy DevelopmentSustainable Investment atKleinwort Benson Investors

Responsible Investor:Can you tell us about the background ofthe company as an asset manager inDublin?

“We need to find away to be able toprovide energy, foodand water for closeto 2½ billion morepeople by mid-century whilereducing carbonemissions andmitigating theimpact thatpollution andclimate change willhave on theprovision of foodand water ”

INTERVIEW



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Our US sales team has had somevery nice traction with our WaterStrategy among public pension funds inthe US, particularly in regions wherethe water thesis hits home with publicbodies in places like Louisiana, Texasand California were people are well

aware of the need to invest in solutions to manage thechallenges of water scarcity and flooding. In addition toinstitutional investors, we work with a number of partnersas a sub advisor for our environmental strategies in theUS, Asia and Europe.

RI: What do you see as the plus points in being based in Dublin/Ireland as a specialistenvironmental manager?

SF: Investment management is a hugely competitivespace, with quality managers across the globe. Dublin is avibrant city with solid investment pedigree. We have beenable to build a highly regarded and successful team thatincludes highly accomplished team members developedinternally and in the Irish investment managementindustry, as well as attracting investment professionalswho wanted to move to Dublin to join a leader inenvironmental investing. With a strong pool of

investment management talent, agrowing pool of specialist financeprofessionals coming through theprograms at UCD and DCU andDublin’s long term leadership infinancial services and operations, weare very well positioned and proud tocontinue to be a Dublin based leader inenvironmental equities.

RI: What do you see as the next big theme in environmentally-related investing in the coming years?

SF: While it’s not really a new theme, low carbon energyproduction and energy efficiency is re-emerging ininterest for long term investors. We continue to need tomeet a growing demand for energy while also reducinggreenhouse gases if we are to avert the worstconsequences of climate change. We believe renewablesare a long-term part of that solution, but there is alsohuge need for the more efficient use of energy throughinfrastructure for higher capacity, more efficienttransmission and distribution of electricity as well as ontechnology and products that facilitate the moreefficient use of energy in homes, industry andtransportation.

The Kleinwort Benson Alternative Energy Fund lastyear was one of the best performing funds in the space,and a big part of that was that we made a strategic callto selectively invest in renewable technologies while alsomoving more into energy infrastructure, like companiesinvolved in building out the energy grid both in thedeveloped world and developing world. The new energygrid is going to need to handle the increased demandfor energy, but is also going to be key to the increaseduse of renewable energy. A smart grid that can better-integrate the use of intermittent renewable source withother sources will be key. From an energy efficiencyperspective almost 80% of energy is lost between itsoriginal source and end-use. So there are also hugeopportunities on the building efficiency side of thingslike insulation and LED lighting.

Dublin is avibrant city withsolid investmentpedigree

. . . we are very wellpositioned and proudto continue to be aDublin based leaderin environmentalequities

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Dublin’s Grand Canal Square designed by Daniel Libeskind



€6bn cornerstoneinvestment to bolsterIrish economyBackground & brief history lessonThe National Pensions Reserve Fund of Ireland (NPRF) wasestablished in April 2001 with the objective of meeting, asmuch as possible, the costs of social welfare and publicservice pensions from 2025 until at least 2055. TheGovernment committed to invest the equivalent of 1% ofGNP annually and any drawdowns to meet pension costswould not commence before 2025. This foresight on thepart of the Government of the day meant that, prior tothe financial crisis and accompanying property crashstriking in late 2008, Ireland had a substantial nest egg inthe form of a globally diversified and largely liquid pool ofNPRF assets, which peaked in value at €24.5 billion.

In early 2009, the Minister for Finance took thedecision to utilise part of those assets to assist in dealingwith the financial crisis facing Ireland and the NPRF wasdirected to invest a total of €7 billion to recapitalise thetwo main Irish banks. Legislation enabling the NPRF to beused for the purpose of bank recapitalisation, known as its“Directed Investments”, represented the first of a series oflegislative changes which would radically transform theNPRF. Since then a total of €20.7 billion has been investedin the banks while the remainder of the NPRF, the“Discretionary Portfolio”, continued to be managed in linewith the original mandate.

However stakeholders wish to see the remaining €6bnof assets contributing more directly to the Irish economy.

In September 2011 the Government announced theStrategic Investment Fund initiative as part of its aim of

maximising resources to enhance growth in the Irisheconomy. It is envisaged that as strategic investmentopportunities emerge (over time), assets currently in NPRF’sDiscretionary Portfolio would be realised to generate thenecessary cash for the investment. The third and finalchange to the NPRF’s governing legislation which will giveeffect to this significant refocusing of the Fund’s mandatetowards investment in Ireland and its formal conversioninto a Strategic Investment Fund is expected to be enactedlater this year.

An Introduction to the Strategic Investment FundThe business plan and investment strategy for theStrategic Investment Fund are being developed in parallelwith the legislative process. The objective of the StrategicInvestment Fund will be to invest on a commercial basisto support economic activity and employment in Ireland.The Fund will seek to be a cornerstone minority investor,thereby acting as a catalyst for attracting additional third-party capital into such investment opportunities. TheStrategic Investment Fund will also incorporateinternational standards of corporate governance withresponsible investment at the heart of its decision making.The investment vehicle or project will typically bemanaged by an independent expert third party manager.However, the Fund does not rule out making directinvestments as appropriate.



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Strategic Investment Fund: progress-to-dateA number of investment commitments have beenannounced by the NPRF as part of the Strategic InvestmentFund initiative.

Long Term Finance for SMEsIn January 2013, the NPRF announced commitments to asuite of three new long-term funds, totalling €850m,which will provide equity, credit and restructuring / recoveryinvestment for Irish small and medium-sized businesses(SMEs) and mid-sized corporates. The SME Equity Fund isfocussed on investing in healthy businesses seeking togrow and is managed by Carlyle Cardinal Ireland in Dublin.The SME Turnaround Fund, managed by Better Capital, willinvest in underperforming businesses which are at or closeto the point of insolvency but have the potential forfinancial and operational restructuring in order to place iton a sustainable long-term footing. The SME Credit Fundwill lend to larger SMEs and mid-size corporates. This creditfund is to be managed by BlueBay Asset Management andis expected to be operational by mid year 2013.

InfrastructureThe NPRF has committed €250 million to the Irishinfrastructure fund (IIF) which is targeting €1 billion incommitments from institutional investors and which willinvest in infrastructure assets in Ireland. Managed by AMPCapital, the IIF successfully closed its first acquisition in June2012 by acquiring a majority stake in a portfolio ofwindfarms.

WaterIn April 2012, the Irish Government announced thecreation of a public water utility, Irish Water, responsible fordesigning, financing, maintaining and upgrading thedomestic water system, including metering. The NPRF hasagreed to provide part of the financing for the roll out ofIrish Water’s water metering programme.

Public Private Partnerships (PPPs)The NPRF has provided standby credit facilities to tworecent roads and schools PPPs and is expected to play asignificant role in the financing of a multi-year €1.4 billionPublic Private Partnership (PPP) programme that wasannounced by the Government in July 2012. This PPPprogramme will develop projects in the education, health,transport and justice sectors.

Venture CapitalInnovation is widely viewed as a key driver of economicgrowth and the NPRF has established a collaborativerelationship with Silicon Valley Bank (SVB), whereby the NPRFhas invested in technology funds managed by SVB Capital,while SVB has established a presence in Ireland and expects tolend US$100 m to fast growing Irish technology, life sciencesand venture capital businesses over a five year period.

The Innovation Fund Ireland (IFI) programme led by NPRFand Enterprise Ireland aims to attract leading internationalventure capital fund managers to Ireland and to increase theavailability of capital to Irish early-stage and high-growthcompanies. The NPRF’s six investment commitments to dateamounting to a total of €100 million represent an ideal fitwith the Strategic Investment Fund.

The futureThere is no doubt that Ireland is still navigating its way inthe aftermath of the global financial crisis, but indicationsare that market recovery is well underway and theconversion of the NPRF into a Strategic Investment Fund,something perhaps more akin to a Sovereign DevelopmentFund, is just one of a broad range of measures aimed atstimulating and sustaining Ireland’s economic recovery.

Emma Jane Joyce, Programme Manager, National Treasury ManagementAgency

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The establishment and growth of the Irish fundsindustry is undoubtedly one of Ireland’s biggestsuccess stories. Who could have imagined that

from a standing start 24 years ago the industry wouldgrow to service some €2.2 trillion in assets; that itwould become the number one hedge fundadministration centre in the world servicing almosthalf the globe’s alternative assets and grow as a UCITSdomicile faster than anyone else – up 500% in the past11 years.

Ireland is experiencing growth across all asset classesand is recognized as the leading centrefor money market funds and exchange-traded funds (ETFs) having a 37%share of the European ETF market.

Furthermore the industry is wellpositioned to capture future business asthe financial world transitions to amore regulated model with a numberof new and proposed legislativechanges on the way.

Take, for example, the AlternativeInvestment Fund Managers Directive(AIFMD). Earlier this year, Irelandbecame the first country ready toaccept applications for alternative

investment fund managers (AIFMs) seeking authorisationunder AIFMD.

It is worth noting that Ireland was the first centre inEurope to provide for regulated hedge funds and so, inmany ways, was already well positioned for the pan-European regime introduced by AIFMD.

That regulated product – the Qualifying Investor Fund(QIF) is recognised as an AIFMD-ready product and isproving increasingly popular with managers. Since thefirst draft of AIFMD was published in 2009, total assetswithin QIFs have doubled.

That foresight and innovation has been crtitical to theIrish funds industry staying one step ahead in anincreasingly competitive market.

It is recognised that the industry will only continue to thrive as long as Ireland continues to proveitself to be a nimble partner to fund managers seeking tointernationalise their businesses.

Therefore Ireland needs to look ahead to whatmanagers may need in five and 10 years time.

And, that is what the Irish Government and the Irishfunds industry is doing. The Government has identifiedgreen finance as one area worthy of particular attention.

Green asset management offers great potential forthe Irish funds industry.

Global clean energy finance andinvestment stood at $263 billion in2011, increasing to $269 billion in2012. Bloomberg New Energy Financerecently predicted that some $650billion per annum will be spent in thissector by 2030.

In recent years the Irish fundsindustry has not only provided qualityback office support to the world’s assetmanagers but increasingly has beensupplying services further up the valuechain. It now provides middle officeservices for many leading globalinstitutions including Citi, BNY Mellon,BNP Paribas, Northern Trust and State

Ireland isexperiencing growth across allasset classes and isrecognized as theleading centre formoney market funds and exchange-traded funds

Ireland’s expertise in renewableenergy asset management isspawning a new growth area for the Irish funds industry

In recent years theIrish fundsindustry has notonly providedquality back officesupport to theworld’s assetmanagers butincreasingly hasbeen supplyingservices further upthe value chain

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Street. They now have centres of excellence in Ireland thatdo much more than simply service Ireland-domiciledfunds.

Following that trend, Deutsche Bank also revealed in2012 that Ireland was to be its European hedge fundcentre of excellence.

While Ireland currently has some notable front officeasset managers in Ireland, the focus on renewables fundscould dramatically increase the number of managers withsignificant operations in Ireland.

This is a sector in which Ireland has a huge advantageover other funds centres – and particularly those that arelandlocked.

The reason being that Ireland is home to a significantamount of talent with experience in renewables andsustainable energy projects and related technologies.

This expertise is as a result of a number of Irishcompanies successfully developing and operatingrenewable and sustainable projects in all parts of the globe.

In fact, Irish cleantech companies are developing andactively engaged in rolling out 20 GW ofrenewable energy across the world.

In short, Ireland has the uniqueadvantage of having a world class fundsindustry coupled with a world classrenewables sector.

And so, as a result of that unrivalledtalent, a cluster of environmnental fundsand managers focused on sustainabilityhas emerged and is rapidly developing.

For example, BlackRock has set upits renewable power investment group inIreland with key renewable powerprincipals from Irish operator NTR joining the BlackRockAlternative Investors (“BAI”) investment platform.

Again demonstrating the overlap between traditionalfund expertise with that of the cleantech/renewable sectoris Greencoat Capital, supported by leading electricityprovider ESB, which is a top-five European cleantech andrenewable investment fund.

Then there’s Kleinwort Benson Investors, one of thefirst investment firms globally to launch separate Waterand Renewable Energy funds, and now has a productline-up that now includes Agribusiness and CleanerSolutions funds and assets totalling some $1 billion.

Other Irish asset managers include GaelectricHoldings plc which was founded in Dublin in 2004 byIrish individuals through a joint venture of real estate,private pension funds and technical wind expertise; BNRGRenewables Ltd, an Irish headquartered Solar PVdevelopment company which develops and constructsutility scale solar PV parks for placement with pensionfunds and institutional investors and NTR which now seesit businesses extend across Ireland and the USA.

Perhaps the clearest demonstration of how Irelandcan grow its green assets to become the leading centrefor environmental funds is Amarenco Solar.

Former Bord Gais (Irish utility) CEO, John Mullins, isworking on the launch of a new Qualifying Investor Fundfocused on solar PV investments - the Global Solar IncomeFund – which subject to regulatory approval has an initialtarget of €100 million of funding. The senior members ofthe Amarenco team combined have over 100 years ofrenewable and energy experience and intend employing20 people over the next three years.

With the pace of announcements and fund launchesgaining momentum - and with the backdrop of the Irishfunds industry growing to €2.2 trillion in 24 years - theGreen International Financial Services Centre (GIFSC) iswell placed to meet its target of increasing ‘green’ fundsmanaged or serviced from Ireland from $20 billion to$200 billion by 2017.

Dara Harringon, Partner, AssetManagement and Investment FundsGroup, Arthur Cox and Chair of theIrish Funds Industry Association’sAlternative Investments Committee

In short, Irelandhas the uniqueadvantage ofhaving a worldclass fundsindustry coupledwith a world classrenewables sector

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Ireland’s increase from 20th to 17th in the overallrankings in the IMD World CompetitivenessYearbook is excellent news for Ireland’s foreign

direct investment landscape. More than half the executives surveyed for the report

identified a competitive tax regime, skilled workforce,business friendly environment, and high educational levelsas key attractiveness factors in Ireland.

Looking behind this headline figure, Ireland ranks firstfor flexibility and adaptability of the workforce, first forattitudes to globalisation, and first for investmentincentives. But, this is nothing new. Ireland consistentlyperforms well in the global league tables of best places todo business.

Competition for Foreign Direct Investment (FDI)remains strong Dublin’s ranking as number one in theworld for human capital is very good news for Ireland asthis is a key factor in attracting FDI.

Ireland’s results in this survey show that our country’svalue proposition as a location for FDI continues toimprove despite strong competition from other countriesand on-going global economic challenges.

The IMD World CompetitivenessYearbook (WCY) is the key referencepoint on the competitiveness ofnations. It has been published since1989 and compares thecompetitiveness of 60 nations on thebasis of over 300 criteria. It is based onhard data statistics and a businessexecutives’ opinion survey.

In addition to all of the above,Ireland is regaining its competitive edgewhen it comes to costs which have comedown across the economy, includingproperty, business services and labour.Prime office rents are down 52%; unitlabour costs down 12%.

IDA Ireland, (the Irish Government’sagency for attracting foreign direct

investment) recorded its third year of employment growthin 2012 with total employment rising to 152,785. The netjob creation figure was at 6,570 - the highest in a decade.

Indeed, the Irish economy managed to grow for thesecond consecutive year in 2012, with GDP increasing by0.9% aided by a significant improvement in Ireland’s costenvironment.

Ireland is continuing to deliver plentyof jobs this year. So far, 28 investmentshave been announced creating a further2,089 jobs. A recent announcementcame from Capita, which said it wasgoing to double its Irish workforce withplans to hire another 800 people.

Trade is the key to Ireland’s economicrecovery. The strong export performanceover the last two years has led to acurrent account surplus re-emergingfollowing ten years of a current accountdeficit.

One reason that Ireland is recoveringis that it has a government, state andbusiness culture receptive to companieslooking to internationalise or expand their existinggeographical footprint – and this a core focus of theGreen International Financial Services Centre (GIFSC) in its efforts to attract funds to domicile, be serviced in or managed from Ireland.

There is much people may not know about thesuccess of Ireland in some largely recession-resilientindustries.

For example, there are now 120 global pharma -ceutical companies based in Ireland, while nine of theworld’s top ten pharma companies have substantialoperations here. Think of names like Novartis, Pfizer,Merck and Sanofi.

Similarly, nine of the top ten US Information andCommunications Technology companies are operatinghere and this is set to grow as companies take advantageof our competitive opportunities and knowledge-basedeconomy.

Long-established ICT companies such as Microsoftand Oracle have more recently been joined by playerssuch as Facebook, Twitter and LinkedIn.

The financial services industry too has been a majorplayer in bringing jobs to Ireland.

More than half theexecutives surveyedfor the reportidentified acompetitive taxregime, skilledworkforce, businessfriendly environment,and high educationallevels as keyattractiveness factorsin Ireland.

Trade is the key toIreland’s economicrecovery. The strongexport performanceover the last twoyears has led to acurrent accountsurplus re-emergingfollowing 10 years ofa current accountdeficit.

Ireland’s improvingcompetiveness augurs well for Green InternationalFinancial Services Centre



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• Deutsche Bank selects Ireland for European hedge fundcentre of excellenceDeutsche Bank to move its entire European hedge fundadministration operation to Dublin and recruit 75-100 people.

• Maples Group expands operation in DublinMaples and Calder to create 75 jobs in part due to demand for itsfund administration services provided by its affiliate, MaplesFS.

• Northern Trust to add hundreds of new positions in IrelandNorthern Trust to expand its Limerick operation by up to 400 newjobs.

• Fidelity Investments expands Irish operationFidelity Investments to add 200 new positions in Dublin andGalway.

• Amarenco Solar launches in DublinFormer Bord Gais CEO, John Mullins, launching a new QualifyingInvestor Fund focused on solar PV investments. The Global Solaris set to employ 20 people over the next three years.

• Clearstream establishes operational centre in IrelandClearstream to establish an operational centre to supportinvestment processing into hedge funds in Dublin.

• Islamic finance firm to set up in IrelandGlobal advisory firm in Islamic Finance, Amanie Advisors toestablish an operation in Dublin.

• Capita to double workforce by 800 peopleCapita is double Irish workforce by another 800 jobs over thenext three years.

A snapshot of some job announcements during 2012 Source: GIFSC

Throughout the domestic economic challenges of thelast number of years, Ireland has seen its internationaleconomy flourish across all sectors to reach all time highs.In essence, there has been two economies at worksimultaneously – the domestic ad the international.

As a result, Ireland has retained its position as a majorcentre for International Financial Services which has morethan 250 global financial institutions with establishedoperations in Ireland and more than 500 companies intotal.

The financial services sector includes investmentfunds, international banking, stock exchange listings andaircraft leasing. These activities are supported by a strongnetwork, including accountancy, legal, actuarial, taxation,regulatory, telecommunications and other serviceproviders.

Other recent investments in Ireland in the financialservices sector have come from HedgeServ, Mastercard,PayPal, Eurocopter (part of the EADS Group), WoltersKluwer, Allianz, Blackrock, Clearstream and Fidelity. And,Deutsch Bank announced in 2012 that Ireland was to behome for its European hedge fund centre of excellence.

The Irish funds industry has been playing its part inthe national recovery story. This vibrant, internationalindustry sector and the Irish Government are workingtogether to retain the 12,000 jobs created so far and togrow the industry in the years ahead.

The Irish funds industry also reached a number ofimportant milestones during 2012. It passed €1 trillion inIrish domiciled assets for the first time and total assetsadministered in Ireland reached a record high of €2.2trillion ($3 trillion).

The continuing growth and ever increasing reputationof the funds industry in Ireland is a positive example ofthe country’s ability to compete and operate globally –and offer the expertise needed to provide solutions tosectors requiring specialist knowledge such asenvironmental finance.

Ireland has a unique opportunity to become a majorcentre for green asset management and funds due to acombination of factors, which make the country attractiveto domestic and foreign funds. As a result, GIFSC has seta target of growing the green asset managementbusiness in Ireland from $20 billion at the moment to$200 billion by 2017.

Dublin’s International Financial Services Centre wasoriginally conceived as an ambitious plan to help createquality employment for Irish citizens back in the eightieswhen the country was emerging from earlier economicdifficulties.

So, from a standing start 24 years ago Ireland’s fundsindustry has emerged as a global leader. In that context,and with that platform as a launching pad, increasingIreland’s environmental finance funds tenfold to $200billion by 2017 is a target that can be met.

GIFSC, working hand in hand with the public andprivate sectors, is there to seize the opportunity presentedby the global need to raise finance to fund greeninfrastructure and the investor appetite to put their moneyin to such projects. By doing so the initiative will meet itsultimate objective of creating the best possible jobopportunities for the country’s talented workforce andensure that Ireland is recognized as the leading locationglobally for environmental finance activity globally.

Christian McManus, Audit Partner, Deloitte

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Top 10impacts ofregulationon assetmanagers

The growing popularity of Green Funds has beenone of the recent features of the ongoing successstory of a thriving asset management industry in

Ireland. This is an industry already facing veryfundamental change. The wave of new financial servicesregulations is causing deep changes in the assetmanagement industry, heralding a period oftransformation that will threaten some business modelsprofitability. Higher regulatory costs in the US andEurope are squeezing asset managers’ profit margins,just as regulation also forces them to review some of thefundamental ways in which they operate. But the effectsof regulation aren’t all disruptive – new opportunitiesawait those asset managers that adapt most adroitly.

With the huge and detailed task of complying with thenew regulations keeping asset managers fully occupied,many have yet to look into the accompanying strategicchallenges. Yet in an industry where regulation is changingthe game, doing so is essential.

Asset managers need to analyse how new regulationswill affect their businesses – the effects may range acrosstheir organisational structures, cultures, capitalrequirements, product development, investment strategies,marketing and distribution. They need to think about howto adapt in order to grow profitably in a world where somebusiness models might become outdated; where regulatoryrisk is rising; yet where financial regulation is leading toopportunities to launch new investment products and toaccess new markets.

Some parts of the industry have to tackle considerablechallenges. For example, how will medium-sized and smallasset managers find the scale to absorb regulatory costs?And, how will future proposals for regulation of ‘shadowbanking’ affect money market funds and securitieslending? Asset managers and their service providers needto understand how new regulations – some of which haveyet to be defined – are shifting the foundations of theirindustry, how this will impact their business models andwhere their new opportunities lie.

1. Benefits of scale growAs new regulations have made asset managers becomemore institutionalised in a relatively short space of time, sothe benefits of scale have grown. Managers haveimplemented new internal controls, policies andprocedures and governance structures. Alternativeinvestment managers, in particular, have had to evolvequickly, accomplishing in just a few months a maturity thatwould previously have taken several years to attain. Largerasset managers are in the best position to absorb the costsof regulation, including: new people, technology andprocesses.

2. Regulation motivates mergers in EuropeBank capital regulations and the mounting costs ofcompliance have become a motivation for selling assetsand businesses. European banks have attempted to selltheir asset management subsidiaries, with mixed success.Meanwhile, some smaller asset managers and wealthmanagers have merged to gain sufficient scale to absorbthe increased costs of regulation.

3. Transparency drives commoditisation, builds trustThe common regulatory principle of increasedtransparency is likely to increase productcommoditisation and reduce margins in some countries.In the UK, the Retail Distribution Review (RDR) willintroduce greater transparency and hand competitiveadvantage to lower priced products. In Europe, theMarkets in Financial Instruments Directive (MiFID) IImight have a similar effect, although its exact measureshave yet to be agreed.

4. Regulators put a premium on culture and governance Many asset managers have not yet come to grips with the growing importance of culture and governance. InEurope and the US, in particular, regulators are placing apremium on firms achieving the right culture, startingwith top management, to make sure that financialinstitutions treat clients fairly and minimise conflicts ofinterest. These demands are a response to cultural issues that surfaced during the crisis, and intensifyreputational risk.

5. New business opportunities emergeNew business opportunities are emerging unexpectedlyfrom regulatory flux. Banks’ withdrawal from certain areasof capital markets trading and proprietary trading iscreating opportunities for asset managers and others to fillthe gaps. What’s more, as alternative investments becomemore regulated, institutional investors are becoming morewilling to place them within a balanced investmentportfolio. Asset servicing firms have an opportunity to takeon administration activities from boutique asset managersseeking scale.

6. Uncertainty over money market funds and securities lendingRegulators in severaldifferent countries aredebating how to reform‘shadow banking’. They’reseeking to restrict the risksof money market funds –chiefly to reduce thepotential for “runs” intimes of stress. Dependingon the path taken,regulations could furtherreduce funds’ profitabilityand limit their utility toinvestors. What’s more,regulators are seeking tolimit the ability of banksand custodians torehypothecate assets, with implications for thesecurities lending industry.

7. Investment freedom fallsAsset managers have lessinvestment freedom, both asbanks withdraw liquidity

from capital markets and as the cost of derivatives tradingrises. These fundamental changes are reducing theprofitability of some asset classes and investmentstrategies. For example, infrastructure, private equity andreal estate firms have suffered over the past few years froma squeeze on leveraged funding.

What’s more, some investment banks are cutting back their commitments to providing liquidity in capitalmarkets and new OTC derivatives regimes are increasingthe cost of hedging.

8. Distribution channels under pressureRegulations such as the UK’s RDR and similar measures inAustralia and Europe are altering the dynamics ofdistribution, potentially making it more difficult for sometypes of asset managers to sell their products, whilehanding an advantage to others. But in the US and Europe,regulations will provide alternatives managers greatervisibility, perhaps expanding distribution opportunities.

9. Remuneration challenges emergeThe EU’s Capital Requirements Directive IV and AlternativeInvestment Fund Managers Directive (AIFMD) are changingthe way that portfolio managers can be remunerated,possibly handing an advantage to asset managementoperations which are not subject to these rules. Inparticular, asset management companies in Asia and theUS should have an advantage when bidding for talent.

10. Shake up for service providersAs asset service providers become increasingly regulated, sothis is likely to drive consolidation as Europe’s AIFMD andUndertakings for Collective Investment in TransferableSecurities (UCITS) V directives force administrators andcustodians to assume more risk. Across the globe,discussions aimed at regulating the ‘shadow banking’sector are likely to limit rehypothecation, making primebrokerage less profitable. As investment banks review howthey allocate capital to different businesses, they mightchoose to exit or sell some of these businesses.

How to prepare? The array of new regulations is creating huge changealready – which is likely to increase still further as regulatorsintroduce yet more rules to safeguard the financial system.Most notably, many asset managers face mounting IT andpeople costs as they prepare for testing complianceregimes. Others are beginning to look into strategic issuessuch as their organisational structures.

As asset managers move beyond the task ofcompliance to address strategic issues, they’ll need toadapt strategy more dynamically than ever before. Learningfrom the experience of banks, asset managers will need toembed approaches to identifying, analysing and preparingfor regulatory change, making sure new practices becomepart of a new business as usual. As part of this, they willhave to analyse the strategic implications of newregulations.

Given the increased importance of scale and brand,asset managers may be able to learn from other industrieswhere these factors matter. Generally speaking, assetmanagers’ success will depend more on factors such asmaintaining a strong infrastructure to support regulatory,investor and marketplace expectations. The quickest toadapt to the effects of regulation will be best able to avoiddamage from the effects of regulation, and to exploit theiropportunities.



Enda Faughnan, Tax PartnerPwC Ireland

Ken Owens, Asset Mgt PartnerPwC Ireland

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Investment Fund infrastructureIreland is the leading regulated domicile forinternationally distributed investment Funds and servicesalmost half the world’s hedge funds and is the fastesgrowing UCITS centre globally.

In 2012, the amount of assets serviced by the IrishFund sector exceeded €2 trillion and has now reached€2.2 trillion.

This growth has been driven by the level of expertiseand back and middle office support in the Irish fundsector which includes, international banks, custodians,trustees, paying agents and accounting/legalprofessionals. Given the strong demand for regulatedproduct (driven by EU regulation and various otherfactors) this growth is likely to increase in the comingyears, particularly given Ireland’s leading role in theimplementation of the Alternative Investment FundManagers Directive (AIFMD). Ireland recently announcedthat it was the first country ready to accept applicationsallowing alternative investment fund managers (AIFMs)to seek authorisation under the new AIFMD.

It is probably worth pointing out that Ireland was

first centre in Europe to provide for regulated hedgefunds and its Qualifying Investment Fund (QIF) is largelyrecognised as the most AIFMD-ready product on themarket with assets doubling since the directive was firstmooted some years ago.

Taxation environment• Ireland offers an attractive and certain tax

environment for investment funds• Investment funds are exempt from Irish tax on

income and gains, irrespective of where the investorsare resident.

• No withholding taxes apply on income distributionsand redemption payments made by an Irish fund tonon-Irish resident investors.

• Ireland’s corporation tax rate at 12.5% for tradingcompanies and such companies can be used tocomplement Investment Funds when used asoperating asset management or financing vehicles.

• Ireland has an extensive and growing tax treatynetwork with 69 countries currently.

• One of the first counties in the world to reachagreement with the US authorities on FATCA.

Why Ireland is the natural choiceIreland is in an ideal position to provide a platform for this growth in green asset management for the following reasons:



IRELANDthe natural choice for green asset management

Ireland is successfully positioning itself as the globalcentre for green asset management funds despitecompeting interest from a number of other

jurisdictions. This is likely to lead to a significantgrowth in the domestic funds industry with multipleadditional benefits in terms of jobs, reputation andincreased economic activity.

BackgroundThe background is that investment in funds that focus onrenewable energy, energy efficiency or provision ofsustainability solutions is booming globally.

For example, global investment in renewable powergeneration is now running annually is excess of US$200billion. This sector continues to attract global investorssuch as pension funds, life funds, family offices,municipalities, large corporates and high net worthindividuals. These investors are investing in variousregulated and unregulated fund structures in order todiversify the risk between various green and sustainableinvestments in different geographies.

This investment activity is driven by a number of key factors including the following:

• Recognition that shortages of key resources is acritical issue in the 21st Century and companies which are addressing this represent valuableinvestment opportunities for global investors.

• The significant additional demand for energy fromrenewable sources as conventional energy cannotmeet the significant demands particularly indeveloping countries.

• Security of energy supply given the global geo-political situation.

• Ongoing decreases in the cost of the relevant greentechnology and their increasing efficiencies

• Continued volatility in the price of oil and othernatural resources.

• A desire to move away from investing in moretraditional asset classes.



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Pool of talentThe key distinguishing feature between Ireland and othercompeting fund jurisdictions is the significant amount oftalent in Ireland which has experience in renewable andsustainable projects and related technologies on a globalscale (in addition to the investment management talent).

This is because, for many years, a number of Irishcompanies have successfully developed and operatedrenewable and sustainable projects in all parts of the globe.

The effect of this has been to create an unparalleledtalent pool with the requisite expertise to support themanagement of green investment structures whichestablish in Ireland.

It is also helped by the fact that Ireland has abundantnatural resources in wind, wave, tidal and biomass whichhas helped foster a strong local renewable sector. Forexample, Ireland will lead the way globally as an exporterof wind energy from 2017 as a result of an agreementbeing formulated with the UK Government.

Currently, Irish cleantech/renewable companies aredeveloping and actively engaged in the rolling out of20GW of renewable energy around the world.

Role of the Green International Financial Services Centre (GIFSC)The Green International FinancialServices Centre (GIFSC) has beenlaunched as a public private partnershipdesigned to position and promoteIreland as the global centre of financefor the green sector.

The critical part of the GIFSC is tobring green investment funds intoIreland to avail of the variousadvantages outlined above – and thatstrategy is bearing fruit. Already, therehas been a number of notableexamples of this occurring and weknow from the work of the GIFSC thatother investment funds are set tofollow.

In March 2012, the Green IFSClaunched the Global Green AssetManagement Network at the New Yorkstock exchange in order to acceleratethe growth in green assets managed,domiciled or serviced from Irelandsetting the target of reaching US$200billion by 2017.

The global Green AssetManagement Network aims to facilitatethe growth of green asset managementin Ireland by leveraging off the existingfunds management sector.

There are a number of differentways in which green asset managerscan use the Irish investmentmanagement infrastructure, includingthe following:

• Managers can establish the fund domicile in Irelandusing multiple different types of regulated fundstructures to meet different investor requirements.

• Ireland can provide a holding structure which holdsthe various green investments on behalf of greenfunds wherever they are established.

• The fund manager can locate some or all of theinvestment management structure in Ireland giventhe level of industry expertise in the country.

• Other support can be provided from Ireland such asadministration and custodial services.

Ireland has all the intellectual and funds infrastructureneeded to play a central role in the financing and servicingof the global green economy.

We are uniquely placed to be recognised as theworld’s leading centre for environmental finance.

Unlike others, we have unrivalled natural resources,unrivalled renewables expertise and unrivalled fundsexcellence. In essence, we have every resource you needto grow your business.

Michael Hayes, Chairman, Global Green AssetManagement Network, Head ofEnergy & Natural Resources, KPMG

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The focus on ‘natural capital’ amongst thecorporate community has increased significantlyover the last couple of years. Large global

corporations such as Coca Cola, Puma and Xerox havecommitted funds to support the preservation andenhancement of the natural environment to neutralisethe impact of their activities in a move that extendsbeyond the traditional boundaries of Corporate SocialResponsibility (CSR). These companies are part of a

growing movement that seeks toaccount for the environmentalimpact and usage of scarce resourcesthat has previously been regarded asbeing cost free.

The idea that an economic valueshould be attached to nature – thatbiodiversity is the living capital of planetearth – is also now being assimilatedinto mainstream EU policy, heralding ahost of new business and investmentopportunities. Initiatives such as the“Single Market for Green Products”,establishment of a Green Infrastructurestrategy and moves to insertsustainability aspects into CSRregulations reflect this shift.

Contribution to repair, maintenanceand protection of biodiversity - far frombeing a soft, sentimental option- has a

strong business rationale. According to a UN EnvironmentProgramme study, a global annual investment of$45billion in biodiversity would protect $5trillion inecosystem services. In an Irish context biodiversity isestimated to contribute at least €2.6billion each year tothe Irish economy.

From a CSR perspective opportunities within thebiodiversity sphere present a robust, positive, high profileand publicly resonant proposition.

Ireland offers excellent prospectsIreland offers excellent prospects in biodiversity forcorporate contribution.

Over 25% of the country is wetlands or forestry. Inaddition to five National Parks there are 76 NatureReserves, 68 wildfowl sanctuaries and National HeritageAreas comprising fens, bogs, salt marshes, dunes lakes,grasslands and native woodlands covering a total of over800,000hectares.

This vast supply and variety of habitat, borne of theunique diversity of Irelands’ geology, offers anunparalleled breadth of biodiversity project opportunities.

In common with other countries Ireland has seen aloss of biodiversity over the last 25 years with the resultthat extinction of native species has occurred – mostnotably the Corn Bunting and Corncock; currently aroundthirty different species of bird and one hundred andtwenty species of flora are under threat.

It is without doubt that the supply of potential CSR

The breadth anddepth of flora, faunaand habitat inIreland coupled withthe robust andcomprehensivestructures measuringand monitoringbiodiversity presentan irresistibleproposition for thedevelopment ofextensive and variedCSR projects.

Biodiversitythe preservation of Ireland’s natural beauty



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biodiversity investment propositions in Ireland is abundant. What is also critical is a well-developed infrastructure

with reputable and rigorous project application. Ireland isdeveloping an exemplary framework under the auspicesof the Environmental Protection Agency who haveprincipal responsibility for the roll-out of EU legislationthrough the National Biodiversity Plan (2011-16). ThisPlan adopts the key provisions of the EU Habitats Directiveand seeks to ensure that each organ of the State embedsan obligation to develop strategies in support of this planin their activities.

The Plan is underpinned by an expansive researchprogramme, Science, Technology, Research and Innovationfor the Environment (STRIVE) comprising nearly eighthundred projects designed to deliver exemplary data andknowledge in respect of biodiversity in Ireland.

The National Biodiversity Data Centre, established in2007, is a nationwide body responsible for the collectionanalysis and management of Ireland’s biodiversity. Theavailability of this statutory framework supports the

monitoring, reporting andverification elements of CSR policywhich is of paramount importancein validating corporate communitydonation.

The commitment of Ireland toa proactive, innovative and urgentresponse to the biodiversity crisisis perhaps best reflected in themoves by Coillte, the state forestryagency, to designate over 11,000hectares in Connaught as WesternEuropes first dedicated wilderness.Under this innovative project overa 15-year period the company willreturn a tract of land in theNephin Beg range in Mayo to its

natural state. The wilderness will comprise forest,mountain, bog, river and lake habitats.

The focus on developing biodiversity propositions is

not confined to State-sponsored activity. Many not-for-profit organisations operate in this space in Ireland.

For example, Green Sod Ireland, established in 2007has secured acreage in Carlow and Galway to preserveecosystems as diverse as wetlands, rocky outcrops andnative woodland.

Additionally, the spectacular Burren area in Clarehosts the BurrenLife project, designed to develop a newmodel for sustainable farming in the context of habitatpreservation.

The role of the Green IFSC initiative in relation topromotion of biodiversity solutions is varied.

First and foremost we have to ensure that the policiesand regulations in Ireland are compatible with financialand corporate needs associated with the rapidlyexpanding focus on natural capital.

This necessitates examination of tax treatment of CSRdonation and analysis of the routes for capital into thebiodiversity space.

The emerging trend of supra-national bond issuancein support of green objectives presents an opportunity forbiodiversity funding in Ireland.

Given that development of a robust infrastructure forenvironmental bonds forms part of the Green IFSCmandate it is logical for the biodiversity aspect to beincluded in the financial infrastructure design.

In summary, the increasing emphasis by companieson action on natural capital and the opportunities soughtfor innovative, connected and resonant CSR initiativesbring Ireland into sharp focus.

The breadth and depth of flora, fauna and habitat inIreland coupled with the robust and comprehensivestructures measuring and monitoring biodiversity presentan irresistible proposition for the development ofextensive and varied CSR projects.

Paul Harris, Head of Natural Resource RiskManagement, Bank of Ireland Global Markets

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The spectacularBurren area inClare hosts theBurrenLife project,designed todevelop a newmodel forsustainablefarming in thecontext of habitatpreservation.

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Ireland: A persuasive case forbusiness investmentFor many global companies, Ireland means

business. Nine of the top 10 pharmaceuticalcompanies, more than half the world’s financial

services firms, and 8 of the top-10 global ICT firms callit “home”.

Finance giant Northern Trust (NT), which has had apresence in Ireland for nearly 25 years, recognises thecountry as “a centre of excellence” for fundadministration and cross-border pooling solutions and isactively committed to driving innovation in the Irish cross-border asset pooling industry, says Clive Bellows, NorthernTrust’s Ireland Country Head: “From a regulatorystandpoint, the Irish regulator has been working closelywith industry participants to support the continueddevelopment of a positive, carefully considered regulatoryregime,” Bellows says. “Particularly in light of regulationssuch as AIFMD, the Irish funds industry has created astrong market.”

“At Northern Trust, we have launched more funds inIreland during the first half of this year than over all of2012. Ireland continues to brand itself as a good place to do business.”

The firm’s offices in Dublin and Limerick currentlyemploy more than 800 people and are considered keycentres, particularly for solutions services linked tomaximising risk management, transparency and goodgovernance for clients. Northern Trust’s Limerick office isset to more than double by 2017 with an announcementto create 400 more jobs. This will see “a dramatic growthin the scale and operation of our Irish business,” Bellowssaid.

Of NT’s current 330 employees in Limerick, more than200 are University of Limerick or Limerick Institute ofTechnology graduates. “Limerick’s investment ineducation has created a talented and well-qualifiedworkforce to draw from,” says Bellows.

According to pharmaceutical giant GlaxoSmithKline,“The quality and capability of the workforce in Irelandmakes the country a very attractive location from apharmaceutical perspective”. GSK spokesperson SarahGahan added: “There can be no compromise onstandards or safety, and the workforce in Ireland has developed the highest levels of technical expertise thatensures security of product supply.”

With 60% of Irish people going on to highereducation, the research-based pharma company also hasaccess to highly skilled third and fourth level graduates

across life sciences: “In Ireland, we are lucky to have avery strong tradition of links between the pharma industryand the local third level institutions in Cork, Waterfordand Sligo,” says Gahan.

GSK, which has a near 40-yearhistory in Ireland, has expanded anddiversified its investment inpharmaceutical and consumer businessesin the country. With a workforce of over1,600 people in six different businesses, itis the fourth-largest employer in thepharmaceutical sector in Ireland.

GSK also works closely with the IDA,identifying opportunities for investmentand bringing them to completion. Gahansays: “Their understanding of the environment, well-informed and dedicated team, and open approach tocollaborating to find solutions that will enable GSK toinvest in Ireland is second to none.

Ireland has improved its competiveness in recent yearsand, according to the World Competitiveness Yearbook, isnow placed seventeenth in global rankings. Ireland topped

At Northern Trust,we have launchedmore funds inIreland during thefirst half of this yearthan over all of2012.

“

”

GSK’s plant in Cork



the rankings for availability of skilled labour, flexibilityofworkforce, investment incentive and attitudes towardsglobalisation. It also scored highly for its openness toforeign investors in terms of business legislation.”Facebook’s international headquarters, its biggest singleEuropean office, is based in Dublin and it is a major sourceof employment for home-grown talent. Its staff operate

across 21 teams ranging fromoperations to legal, sales, HR, and realestate and facilities: “Ireland is a hub fortechnology companies, continuing toattract start-ups and large internationalcompanies thanks to its highly educatedworkforce,” Facebook said.

And Ireland has reaped therewards. Because its international HQ isin Dublin, Ireland enjoys the largestshare of narrow benefits of Facebookacross the whole of the EU, said thetech social networking firm. Based on a2012 joint analysis with consulting firm

Deloitte on jobs and Facebook’s supply chain across theEU, figures reveal that because of this international HQalone, the tech company has contributed €165.7 millionto the Irish economy and supported 2,200 jobs, of whichover 400 are employed directly.

Overall in Ireland, Facebook has contributed €397.2million to the Irish economy and supported 4,500 jobs, ofwhich 800 are the result of small businesses usingFacebook to grow, it says. Meanwhile, the global custodyand asset management giant State Street has a very significant presence inIreland - employing more than 2,000people at six locations in Dublin,Drogheda, Kilkenny and Naas.

For State Street, Ireland hasdemonstrated a deep commitment to itsindustry. “Over the course of the lastdecade plus, we have been in a positionto observe - at close quarters - theenergy Ireland has put into becoming acentre for financial services expertise,” itsaid.

Furthermore, recent improvements incost competitiveness have contributed to State Street’sgrowth and operation of a range of complex activities,such as the European Derivatives Centre of Excellence, inIreland. Quite apart from the skilled workforce and lots ofup-and-coming talent, the firm said: “there is apragmatic, ‘can-do’ attitude in the Irish that pervades allof our business dealings over the years.

They are innovative and good at problem-solving”enthuses the financial services firm: “Since the late 90swe’ve had experience across a wide range of asset classesand investment types, and each time we have introduceda new product, we have found a depth of expertise andwillingness to partner with us that makes us well-disposedto doing business in Ireland.”

There can be nocompromise onstandards or safety,and the workforce in Ireland hasdeveloped thehighest levels oftechnical expertisethat ensures securityof product supply.

Ireland topped the rankings foravailability ofskilled labour,flexibility ofworkforce,investmentincentive andattitudes towardsglobalisation

“

”

Clive Bellows, Northern Trust

State Street’s Dublin Headquarters overlooking the Liffey

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Q: What is the SEAI’s structure for helping largecompanies/energy users in Dublin to green theirbuildings and enhance their energy efficiency?

A: There is now a groundswell of interest in energyefficiency and sustainability. SEAI offers many supportsfor businesses, large and small, that are looking toimprove their energy efficiency and reduce costs. Thesesupports include networking, training and advisoryservices. We have worked with 3000 business, publicand private, from the smallest to the largest, and theresulting savings now add up to hundreds of millions ofeuros. It’s an exciting area when we see how much isbeing saved, but of course it’s also a reminder as to howmuch energy wastage still continues.

Q: How does the SEAI follow and support thesegreen building projects?

A: SEAI has helped thousands of companies toimplement projects in energy efficiency and renewableenergy. Support can be in the form of grants to coverpart of the capital cost of the project, or throughdeveloping the network of suppliers and engineers torealise the projects. The sheer number of projects hashelped to build expertise and create a market forsolutions that are now proven to work in the Irishcontext. So our model is often to stimulate the earlyadopters, have them prove what is possible, and thenseek to spread that message for others to follow.Relationships are key – our relationships with companiesand the networks we use to spread messages, provesolutions and build a credible services market.

Q: What is the significance of this greeninginitiative for Dublin?

A: We already know that energy efficiency makes goodeconomic sense, and so the first and main benefit islowering business costs and helping maincompetitiveness. More widely, Ireland’s financial sectoris positioning itself for opportunities in the ‘green’ space

and of course an essential first step in this isdemonstrating its own credentials. ‘Greening the IFSC’ isabout leading by example. There is technical andorganisational innovation, and also financial innovation,with new models of performance contracting or risksharing emerging that unlock finance for energyefficiency investments. The group includes someexcellent examples of innovative, forward-lookingcompanies, and we want to build a brand for Dublinand for Ireland in this regard. At this stage, it’s movingfrom early adopters to mainstream – it’s at a point nowwhere it looks odd if a business is not working toimprove its energy efficiency and sustainability.

What are the SEAI’s long-term goals with regards

to greening Dublin? And where is the SEAI

currently in terms of realising these goals?

A: Ireland has national targets for energy efficiency,renewable energy and greenhouse gas emissions, andthe businesses of Dublin have an important role to playin that. 2011 was a record year for renewables inIreland, in particular wind energy. One fifth of Ireland’selectricity supply now comes from renewables and thishas brought a number of benefits, most notably areduction in our natural gas imports worth almost €300million, and avoided emissions of 3.6 million tonnes ofCO2. Ireland has an enviable renewable energy resourcebut all stakeholders need to work together to ensurethat we realise this potential.

In Dublin we are working not only with the mainbusiness actors but with the municipal authorities aswell. The local authorities are part of our ‘sustainableenergy communities’ network, and some have beenawarded exemplar status for their innovation work onintegrating city planning with local initiatives onsustainable energy. I see a momentum in innovationtowards decarbonisation and sustainable energy wheremany exciting new ideas are being embedded intoplanning and into actions.

BrianMotherwayChief Executive Officer of the Sustainable EnergyAuthority of Ireland (SEAI)

INTERVIEW

Clean energyinnovation

The natural choiceLet’s look at our natural resouces. Some 50GW of peakAtlantic Ocean wave energy washes up on the westernseaboard which is 10 times greater than the peak powerdemand for the entire country.

It is well known that Ireland has some of the bestmarine resource in the world but we also have wind – andplenty of it. Many may not know that harvesting theterrestrial wind resource alone already delivers 50% of theIreland’s national power requirement on some days, andwe are heading towards 75%, putting us in line to be theworld record holder for penetration of onshore wind

energy on a single grid system.

Smart grid leadersMuch of this achievement in windgeneration is made possible by worldleading Smart Grid innovation. And, it’snot just us saying it; the InternationalEnergy Agency conducted a detailedcountry review in 2012 and ratedIreland as a “world leader for smartgrid deployment”.

Others are now turning to thatinnovation to meet their own power

needs which provides huge opporuntiy for Ireland. InDecember last, a new €570 million interconnector wascompleted linking the Republic of Ireland to the GB powergrid. A month later, in January, a memorandum ofunderstanding was signed between the Irish and UKgovernments to progress the trading of renewable energyof scale (>3,000 MW) between the two countries. Whilethis will require a step change investment in Irish windfarming coupled with massive scale interconnection, theinitiative’s success could effectively lead to Irelandproviding Great Britain with an affordable “offshore”wind solution on the island of Ireland.

A snap shot of some innovative Irish ideasSolar prospectsWhilst the Costa del Cloud has been slow to develop intoa big market for solar, it is gaining pace. Just look at the€1.6billion Irish insulation giant Kingspan now ideally

positioned to redevelop its millions of square metres ofinstalled roofing in the UK as prime real estate for thenew revolution in solar photovoltaic and solar thermalenergy harvesting. First for tidal stream generation technologyIn many ways what is happening in Ireland today hasbeen the result of decades of research and innovation.

For example, Ireland boasts the world’s first tidalstream generation technology exporting to the nationalgrid at Strangford Lough.

The Marine Current Turbine device works like a sub-aqua wind turbine and Siemens - the technologyproviders to the very first hydro power plant atArdnacrusha in Ireland 80 years ago – are now supportinganother renewable first in tidal power. Developing new IT and Telecoms solutions for thepower sectorUSA’s Electric Power Research Institute (EPRI) – the leadingpower research institute has established a demonstrationproject in Ireland in cooperation with ESB – the Irishpower utility, to develop the next generation of smartgrids capable of managing very high penetrations ofintermittent renewable energy sources. Smart Grid is allabout applying advanced telecommunications with state-of-the-art IT systems to the power grid infrastructure toextract high quality, reliable power from a diverse array ofclean but weather dependent renewable generators. Ciscohave suggested that the Smart Grid will be bigger thanthe internet and they could be right – it is already a newbusiness opportunity of global significance.

Ireland benefitted from the ICT boom of the past twodecades and has been fortunate enough to become asecond home and in many cases the EMEA headquartersto many of the world’s leading players such as Apple,Dell, Google, Intel, Linkedin, Facebook and Microsoft toname a few.

The Dublin-based technology company IntuneNetworks has harvested some of this home growntelecoms talent to develop the world’s first optical switchexemplar project which is now being trialled incommercial applications with Verizon in the USA and hasalso recently been successfully validated by Telefonica inEurope.

Some 50GW of peakAtlantic Ocean waveenergy washes up onthe westernseaboard which is10 times greaterthan the peak powerdemand for theentire country

Ireland is sitting on a gold mine – a green goldmine. It is the only EU country that produces sixtimes its own food requirements, a nation of 5

million people feeding 30 million, and it is poisedto do the same with renewable energy farmingand energy efficiency innovation.



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Intune has cracked the Holy Grail of telecoms. Thisunique technology offers the potential to boost massivelythe performance of existing metro networks whilstdramatically reducing energy consumption. Watch thissame space for a major European Smart Gridannouncement in 2013!

IBM chose Ireland for the headquarters of its globalsmart cities researchApart from clean electricity, Ireland like all EU memberstates has binding 2020 commitments for developingrenewable heat and transport with targets for Ireland of12% and 10% respectively. Getting these right will notonly reduce fossil fuel imports and emissions, but alsoaffords a knowledge based export opportunity.

In the transport zone, Irelandboasts one of the world’s mostadvanced e-mobility programmes witha complete national charginginfrastructure for electric vehicleswhich uniquely includes crossjurisdictional coverage for the island.IBM chose Ireland for the headquartersof its global smart cities researchcentre which encompasses acooperation agreement with ESB’s e-Cars team to develop global solutionsfor charge management and billing

systems for the emerging electric transportation market. The batteries in electric cars also present the

opportunity for absorbing surplus wind energy and theprospect of V2G or vehicle-to-grid power recovery tosupport the national grid during peak demand require -ments as a low carbon alternative to burning fossil fuels.

World’s largest manufacturer of electrical heating systemsIn the heating zone - not many people know it - Ireland isalready the home of world’s largest manufacturer ofelectrical heating systems - Glen Dimplex, a privatelyowned company which employs some 10,000 peoplearound the world.

Recognising the opportunity for low carbon heating,this Irish company’s R&D team has developed the nextgeneration Quantum solution. Dublin’s globallyconnected Green Way Cleantech Cluster is working withthe councils to pilot this innovative technology in 140homes. The solution provides comfortable and affordableheat whilst soaking up surplus power generated by thewind fleet particularly at night time when electricaldemand is at its nadir. Think of it as a storage facilityprovided gratis with every heater. Instead of the cost of adedicated battery which also suffers the penalty ofreconversion losses, this system simply stores excess gridenergy as heat and releases it at when useful.

Leading the way in energy efficiencyOf course, as we all know, energy efficiency is the othermain plank of the new low carbon economy with all EUcountries obliged to deliver 20% energy efficiencyimprovement by 2020 and government agencies leadingthe way by achieving 33% reductions in energy usage.

Without a doubt these targets are starting to focusthe minds and Irish companies are leaders in this sector.

Nualight is a shining example. A Professor ofoptronics from Tyndall Institute - Liam Kelly - saw theemergence of white LED light technology before the rest.The professor also knew that LED’s are more efficient andlast longer at lower temperatures, so he was keen to finda market for low temperature lighting. He quicklyidentified the supermarket freezer display sector and therest is history.

This start-up in Cork now exports tens of millons ofeuros worth of leading edge lighting products tocustomers across Europe, the USA and is alreadystretching to new markets like South Africa.

A phenomenon known as “Haitz’s Rule” has beendelivering exponential improvements in LED efficiencysimilar to the impact of Moore’s Law in thesemiconductor world. Asthe curve grows, LED’sappear in more diverselighting applications.

AgribusinessInnovationThe O’Connor brothersfrom Limerick havedeveloped a new lowcarbon heating system forthe poultry sector to solvea key problem for theirown industry. One of themain cost items inchicken farming is theheating bill. TheO’Connor’s BiomassHeating Solutiontechnology company hasdesigned a unique boilersystem that recycles thebedding material as a fuelto provide clean heat forthe birds. The solutiondisplaces fossil fuel toreduce heating oil costs,eliminates a waste streamand the residual productis a valuable fertiliser. Results from the UK pilot at Norfolkshow that the birds are thriving too.

Investment opportunitiesPerhaps one final parting thought for you to muse on as aResponsible Investor: Countries around the world arestriving to solve the combined challenges of climatechange, energy security and affordability. The changes wewill see in the next decade will be as profound as thoseexperienced in the industrial revolution.

The investment opportunities presented by thesechanges will be immense and Ireland affords numeroustechnologies and companies to attract interest.

The changes wewill see in thenext decade willbe as profoundas thoseexperienced inthe industrialrevolution.

John McKiernan,PartnerGreencoat Capital

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The Green International Financial Services Centre(GIFSC) is a multi-sector Irish Governmentinitiative aimed at developing and implementing

a cohesive strategy to position Ireland as a world-classfinancial services centre in the origination, fundingand growth of green finance and enterprise.

Sustainability has to be paid forThe global banking sector has been the subject of a difficultand challenging period of re-capitalisation and restructuring.These changes were, in part at least, prompted also by theexisting and incoming Basel Accords, the EU Solvency II andAlternative Investment Funds Directives and other mootedinternational regulatory reforms.

As the restructuring period of the past few years isinevitably consigned to history, the cumulative and bindingimpact of the regulatory changes are underpinned by a

wider consensus that new, profitable (without beingsystemically dangerous) and sustainable methods of fundingcritical infrastructure must emerge.

The demand for proven investment-grade asset classes ismatched only by the need to facilitate the origination,investment and funding of the insatiable demand forsustainable sources of electricity, water and food. One needsthe other. The sheer magnitude of the capital (of theinvestment and political kind) required to bridge this gap hasmasked the true size of the international opportunity forgreen finance.

Renewables & International Financial Services –unlikely companions?Despite (and possibly because of necessity) our own periodof challenge in the domestic economy, two key componentsof the Irish economy have grown in value, job creation and,critically, confidence.

Starting from entirely separateplaces, the Irish Renewables andInternational Financial Services sectorshave each grown organically andexponentially over a couple of decades;each sector has fostered a vibrant bodyof world class, internationallyexperienced and ambitious companiesand people that operate in diverse buthugely complimentary disciplines.

Ireland has a proven expertise in the large scaledevelopment and roll out of onshore wind generation,Government policy has included long term policy andexpenditure commitments to develop a power grid capableof absorbing unprecedented (75%+) levels of renewableelectricity and the pursuit of bilateral agreements with otherEU Member States to develop an €8bn renewable energyexport market.

Significantly, the Irish renewables and grid buildingprogrammes have been the subject of in excess of €2 billionin corporate, equity and project financings since 2007.

Ireland has an established body of world-classexperience and expertise in inter-related financial servicesincluding project finance, aviation finance, funds andinsurance.

Sustainability,asset classesand Ireland’send-to-endoffering

Ireland has aproven expertise inthe large scaledevelopment androll out of onshorewind generation

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For example, the International Financial Services Centreembraces funds, banking, aircraft leasing, insurance,securitization, payments and money transmission andcorporate treasury. Ireland’s funds industry services some $3

trillion in assets, is the number onehedge fund centre in the worldadministering more than 40% of theglobe’s assets and the fastest growingUCITS centre having experienced growthof 500% in 11 years.

The Irish stock exchange is thenumber one in the world for the listingof investment funds; Ireland is theglobe’s leading centre for aircraft leasing,

and on the insurance side, Ireland has a well developedinsurance and reinsurance industry and is the largestprovider of cross border life insurance in the EU withpremiums in excess of €16bn.

Ireland – the offeringTo outline just some of the areas in which Ireland can and isable to support green finance and enterprise:

1 Business Environment and supportive Government. It iswell recognised that Ireland is one of the best places todo business and, importantly, ranks first in the world foravailability of skilled labour, flexibility and adaptability ofworkforce, and for attitudes towards globalisation (IMD)GIFSC has tackled and promoted legislative changes inspecific areas to further enhance the businessenvironment for green finance. For example:

• Inclusion of greenhouse gas emissions allowanceswithin the existing securitisation regime.

• Relief from stamp duty on transfers of greenhouse gasemissions allowances.

• Corporation tax relief for investments made inrenewable energy projects has been extended up to 31December 2014.

• Inclusion of companies involved in production of energyfrom renewable sources within Income Tax ReliefScheme for Investment in Corporate Trades.

• Carbon Securitisation: The Irish tax system has beenamended to specifically enable tax efficient treatment ofa wide class of carbon offsets issued under voluntaryschemes as well as those issued under compulsoryschemes.

2 Regulatory stability. Ireland has maintained its corepolicies and initiatives supporting inward investment,

corporate tax and protection and enforcement of legalrights in intellectual property amongst others. It is also one of the first countries in the world to reachagreement with US authorities on FATCA.

3 The success in financing renewables assets in Irelandsince 2007 underlines the international appetite forquality asset, index-linked cash-flows that underpinnedby transparent and non-sovereign based tariff supportstructures.

4 Investment opportunities. Ireland’s gate system forconnecting new generating capacity is entering into asignificant and important stage with in excess of3000MW seeking connection. Given that not all of thispotential capacity can or will be connected, a separatedrive for export of power to the United Kingdom andelsewhere has gathered political and investment support.

5. Capital Markets: The scale of the investment required toreach European renewable energy targets alone isdriving the emergence of traditional project bonds andmore recently “climate bonds” and other new financialand products.

6 A sophisticated funds industry with a growing cluster ofinternational expertise in renewables and relatedsustainability investment. A series of dedicated greenfunds are now offered and managed from Ireland. E.g.BlackRock Renewable Power, Kleinwort Benson andmost recently Amarenco Solar, created by solar industryprofessionals and the CEO of the former Irish utility,Bord Gais Eireann, John Mullins.

7 Education: Dublin City University, with Green IFSC andGovernment support, has developed internationallyaccredited postgraduate certificate and mastersprogrammes in Sustainable Energy Finance. Theseprogrammes are industry led and are complimented byother initiatives within various professional bodies.

The GIFSC is methodically combining these strands anddrawing on support within Government, industry andeducational sectors to provide a unique and cogent globaloffering to green finance.

The Irish stockexchange is thenumber one in the world for the listing ofinvestment funds

Garrett Monaghan , Member of theGIFSC Steering Group and Partner in the Energy and ProjectsGroup, Arthur Cox, Dublin

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“ Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and members of FINRA and SIPC, and,

©2013 Bank of America Corporation 05-13-1192

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It’s how clients, communities

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Twelve years

of outstanding

performance –

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The Kleinwort Benson Investors Water Strategy has outperformed in ten of the last twelve calendar years, by a

cumulative 73%*. Importantly, we believe that the long-term trends that have supported this outperformance

will continue, benefitting investors who add our Water Strategy to their portfolios. Investing in water provides

exposure to a number of dominant and persistent global growth themes including:

Natural Resource Scarcity

Emerging Markets

Infrastructure Investment

For more information, please email John Griffi th at john.griffi [email protected] or see our website

www.kleinwortbensoninvestors.com

* The outperformance is measured against the MSCI total return net index,

for the twelve calendar years from 2001 to 2012 inclusive, gross of all fees,

calculated in euros. Returns up to 30/04/08 are based on a Belgian Fund

which followed the Water Strategy and was managed by KBI. Returns from

01/05/08 are actual returns from the KBI Water Strategy.

Source: Kleinwort Benson Investors, Datastream.

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