Sovereign wealth fund rules out pumping gas profits back into fossil fuel industry

A sovereign wealth fund set up by Israel for proceeds from offshore gas extraction will not invest the money back into oil and gas companies, the official in charge of the fund said Tuesday.

The board of the Israeli Citizens’ Fund has decided to “avoid direct investment” in companies involved in the extraction and production of oil or gas, Yarom Ariav told the Knesset committee that oversees the fund. He said the fund was now worth nearly $350 million.

Speaking for himself, Ariav said the impetus for the ban on fossil fuel investments was a mixture of ethics and economics.

The fund was set up in recent years following the discovery of natural gas to invest the expected energy windfall as well as proceeds from the extraction of other natural resources, such as minerals and stone.

It began to operate on June 1 — long after initial predictions — after passing the required income threshold of NIS 1 billion.

The committee was told that NIS 1.14 million had entered the fund and had already been converted into just under $342 million.

No further proceeds are expected until May.

Ariav, an economist, a former Finance Ministry director-general, and former President and CEO of ICL Fertilizers Europe, is required to report on the fund’s activities to the Knesset every three months. Tuesday’s meeting was the first since the fund began to operate.

Yarom Ariav. (Lisa Molko, CC BY-SA 4.0, Wikimedia Commons)

He said the fund’s steering panel will seek 40-year investments to limit risk and fulfill the law’s aim of benefiting future generations.

To avoid exchange rate fluctuations, it will use dollars to make investments, although it could also invest in other currencies.

Until the long-term investment strategy is worked out, the committee will take a conservative approach to the money…

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