The largest sovereign wealth fund in the world, Norway’s US$930 billion Government Pension Fund Global, is seen as the epitome of socially responsible finance. But if this is the best the investment world can offer, it offers scant hope that sustainability can be achieved through the influence of investors.
The fund, which owes its size to profits from Norway’s oil and gas industry, has become a powerful player in global markets since getting its first injection of capital in 1996. Despite its deep links to the fossil fuel industry, it has managed to foster a benign reputation thanks to a set of ethical guidelines and its Council on Ethics.
The Council can recommend the fund sells stakes in companies that violate the guidelines – or can place companies on an observation list. The Bank of Norway makes the final decisions. Companies – Walmart among them – can be excluded if they deal in products like tobacco or weapons, or if their conduct leads to things like environmental damage or human rights violations. Exclusions are made public, with a written explanation.
Excluded. EPA/JUSTIN LANE
It is a thorough, but slow, process. It has also been criticised for being based on a so-called “overlapping consensus” approach. This means the Council might only assesses a case if, for example, a massive media reaction indicates the people of Norway find a company’s conduct intolerable.