AMNESTY INTERNATIONAL has urged Government agencies to "ethically screen" companies before investing in them.
Colm O'Gorman, executive director of the Irish branch of the human rights group, said he welcomed the decision to withdraw funding from manufacturers of cluster munitions, but said there was currently no "considered, graduated" approach to investing in companies.
He said the National Pensions Reserve Fund (NPRF) should "ethically screen" all companies, and following this, should examine whether the fund had the capacity, given its shareholding in a particular company, to change "unethical" practices it might be involved in. If it concluded this was not possible, it should pull out of the company.
He said this would be similar to the approach adopted by the Norwegian government's pension fund, which "ethically screens" the companies it invests in.
"The suggestion that the Irish taxpayer should somehow profit from human misery is simply wrong," Mr O'Gorman said.
"We shouldn't be approaching this on an ad hoc basis . . . It would be unacceptable for us to be investing in any companies involved in human rights abuses in any part of the world".
A spokesman for the NPRF said it "operates under a commercial investment mandate and taking a view as to whether stocks should be excluded for ethical reasons does not form part of its brief".
"Whether or not a portfolio which excludes certain investments outperforms or underperforms the broad market is dependent on the relative performance of the excluded investments over the investment time horizon," he said.
" However, as the screened portfolio will contain fewer investments than the broad market, it is, by definition, riskier or more volatile . . . The degree of increased risk or volatility depends on the number of excluded investments."
Jean Ryan of KBC Asset management, which manages a number of "green" and socially-responsible investment funds on behalf of its clients, said there had been "huge growth" in such funds in recent years.
She believed this was in part because investors were increasingly realising that "investment is an area where actions can have an effect".
There was no evidence to suggest that maximising returns and adhering to a set of ethical investment principles "are mutually exclusive".