Covid-19 – looking beyond our shores

Photo credit: Karin Schermbrucker/ActionAid

Siobhán McGee, Chief Executive, ActionAid Ireland wrote a Letter to the Editor which featured in the 15th April edition of The Irish Times. It is available online and below.

Sir, – I write in response to the piece by Michelle Murphy of Social Justice Ireland (“Coronavirus – time for a new social contract in Ireland”, Opinion & Analysis, April 10th).

As a social justice and equality organisation working globally, we wholeheartedly agree that recent events have reconfirmed that public services and social welfare supports are essential assets of any society, and not only when faced with an unprecedented crisis.

It has also been brought into sharp relief in recent weeks how interdependent we are – how an individual’s actions, and indeed a country’s actions, affect us all. The very local is deeply connected to the global and back again.

The Covid-19 pandemic has caused the most fundamental economic and social shock that most of us in Ireland have ever experienced. Unfortunately, these shocking economic and social effects are not unfamiliar to many living in the poorest countries, especially women.

The full effects of Covid-19 are starting to be felt in these countries, but what they typically lack is precisely what we rely most on here to offset the worst effects of the pandemic: political capital, timely access to reliable information and analysis, availability of effective public and health services, housing and, of course, basic income support.

The essential prevention elements we are entreated to resort to here – continuously, repeatedly – include information on hygiene etiquette, calls for social distancing, stopping work and staying home. These actions are mostly unattainable to millions of people in lower-income countries.

In India, 1.3 billion people have been forced to stay at home, and they include informal workers, such as domestic workers and street vendors, with no way to earn a living during the lockdown. An estimated two-thirds of African citizens (66 per cent) work in the informal sector but as small-scale entrepreneurs they must work in order to eat. Social distancing measures are beginning to close those businesses, dusk-to-dawn curfews are narrowing the working day, and supply networks for food and goods are being disrupted.

In Kenya’s capital Nairobi, two-thirds of the 4.4 million population are crammed into informal settlements that lack basic services, and entire families can live in a single room. Social distancing, as described in the public policy provisions, isn’t possible.

ActionAid is distributing food packages to the most vulnerable families and through grassroots women’s groups working to tackle the spread of misinformation about the disease, translating vital public health advice into local languages and ensuring it reaches the most marginalised communities. Women are at the forefront of caring for the sick, home-schooling, working in precarious jobs and are at greatest risk of falling through the safety net.

In Kenya, ActionAid has called on the government to ensure guaranteed paid sick leave is available to all workers, both in the formal and informal sectors, and that people living in informal settlements have access to health facilities staffed by skilled professionals, and to free, clean, drinking water. Yes, access to public services and social welfare supports are essential assets of any society when faced with an unprecedented crisis. Unfortunately, not all societies have those supports.

Our call is to harness the positive changes we’ve made in Ireland and use that to help build a better world – a more equal Ireland, and a more equal world – for all. We in Ireland deserve this, and so too does every citizen of the globe.

– Yours, etc,

SIOBHÁN McGEE,

Chief Executive,

ActionAid Ireland,

Ivy Exchange,

Granby Place,

Parnell Square, Dublin 1.

Protesters holding End Fossil Fuels banner at a climate demonstration, advocating for renewable energy solutions.

Protestors at COP 28 in Dubai. Photo: Konrad Skotnicki.

Climate protest with diverse crowd holding signs about environmental action in a city square.

Belfast Climate Change March, 2019. Photo: Trócaire.

The Profit Driving the Crisis

Despite their overwhelming contribution to global emissions, fossil fuel companies continue to attract significant financial backing—driven by their enduring profitability. This is starkly illustrated by the case of ExxonMobil, the top fossil fuel investment held by asset managers based in Ireland. In 2023, ExxonMobil reported €33.63 billion ($36 billion) in profit. That is almost twice the GDP of Botswana (€18.1 billion) and nearly three times Namibia’s GDP (€11.5 billion).

Ireland plays a hugely disproportionate role in facilitating investments into fossil fuel companies like ExxonMobil. In 2023, the investments made into fossil fuel companies by investment managers based in Ireland generated an estimated 72.5 million tons of CO2e. This is more than the CO2e emissions for the entire country of Ireland—and more than ten times that generated by Sierra Leone.

The Global Human Impact

The climate crisis is here, now, and it is causing disproportionate harm in the Global South. In Bangladesh, rising sea levels and increasingly severe cyclones are displacing coastal communities, with projections indicating that 17% of the entire country could be underwater by 2050. The legally binding Paris Agreement on climate change explicitly acknowledges the importance of tackling private finance. Its three overarching goals are: keeping below 1.5C of warming; increasing adaptation and making finance flows consistent with low emissions and resilience.

This gives a clear mandate for action:  both tax reform and corporate regulation are needed to tackle financial flows, and both nationally in Ireland and at EU level, ‘polluter pays’ taxes are lacking and regulation of the financial sector remains weak and fragmented. While EU regulation exists, it is designed more to nudge investors toward more sustainable investment practices by increasing transparency and reporting levels than to enforce strict standards. And it is moving in the wrong direction: the recently passed EU Corporate Sustainability Due Diligence Directive excluded investments; and now the EU Commission’s Omnibus legislative proposal threatens to undo the limited gains made on climate plans, as well as blocking future attempts for stronger action at national level.

The Risk of Inaction

Fossil fuel investment is too profitable to remain weakly regulated. If Ireland continues with its current strategy of encouraging FDI at all costs, and relying on weak EU regulation, we are headed for catastrophe. The Inter-governmental Panel on Climate Change has repeatedly warned that every fraction of a degree beyond 1.5°C brings irreversible consequences: collapsed ice sheets, vanishing coral reefs, and extreme weather events that will make vast regions of the planet uninhabitable. And yet, companies are developing oil and gas fields that could push global warming beyond 2°C.

Our research found that 91% of the investments made into fossil fuel companies by investment managers based in Ireland were to companies that have plans for fossil fuel expansion like these. Ireland cannot afford inaction on this issue.

About This Research

The figures in this report regarding investment from Ireland are based on new research commissioned by ActionAid Ireland and Trócaire. In the paper, we uncover the scale of fossil fuel investment through Ireland, who the investors are, and in which fossil fuel companies they are investing.  We analyse the current regulatory framework and explain why it is inadequate—and moving in the wrong direction. And we make specific recommendations for change, which are summarised below.

Summary of Recommendations

Regulate the private financial sector
Ireland must end its outsized role as an enabler of destructive fossil fuel investment. Ireland should introduce a strong gender-responsive national human rights and environmental due diligence framework which includes the regulation of investors with respect to human rights and the environment and climate. The transposition of the EU Corporate Sustainability Due Diligence Directive could achieve this if downstream activities are included and the Omnibus proposal is rejected. Ireland should prohibit investments in fossil fuel expansion and require investors to implement climate transition plans consistent with a 1.5°C climate limit.

Endorse the Fossil Fuel Non-Proliferation Treaty
Ireland should endorse developing a Fossil Fuel Non-Proliferation Treaty to curb fossil fuel expansion and commit to a fair and funded phase out of fossil fuels.

Support tax justice
Ireland should support bold and fair new global tax rules through the UN Framework Convention on Tax, should adopt all OECD BEPS measures, and should conduct an updated and comprehensive spillover analysis of its tax policy. Ireland should take coordinated action globally, at the EU level and domestically to introduce a range of new taxes to mobilise finance needed for climate justice, based on ‘polluter pays’ and social equity principles such as wealth taxes for the highest earners, climate damages tax on investors, fossil fuel production taxes and levies on aviation and shipping.

Finance a just transition
Ireland must also meet its fair share climate finance obligations under Article 9.1 of the Paris Agreement, and pay our ecological debt to the Global South. Ireland should support conditionality-free debt cancellation for countries on the front lines of the climate crisis, commit to a new UN Framework Convention on Sovereign Debt, moving debt negotiations from the IMF to the UN, and to a debt workout mechanism that is fully representative and fair.

Further reading