Norges Bank, the manager of the $456.4 billion (NOK 2,549 billion) Government Pension Fund Global, will integrate considerations of good corporate governance and environmental and social issues into its investment activities under an ambitious new requirement set out by the Ministry of Finance.
Last year the Ministry of Finance conducted a broad evaluation of its ethical guidelines, receiving more than 50 consultative comments. With a view to bolstering the fund’s responsible investment practices, it has introduced a number of new measures and changes linked to active ownership and exclusion of companies.
Norges Bank now acknowledges in some cases it is more useful to put a company under observation than to exclude it.
The new guidelines enable a slightly broader assessment of the situation before a company is excluded on grounds of grossly unethical behaviour. The Ministry will in this context consider use of other measures. For example, this may be relevant if active ownership or observation might reduce the risk of continued violations of norms or for some other reason is deemed more appropriate.
“We are increasingly attaching importance to Norges Bank’s active ownership,” says Minister of Finance Sigbjorn Johnsen.
In addition to the guidelines the fund is undertaking embarking on an environmental investment program and a major research project on climate change and its possible impacts on the financial markets.