The Norwegian Government Pension Fund – Global (the ‘Fund’), formerly known as ‘the Oil Fund’, is the worlds largest Sovereign Wealth Fund, with current assets of 855 billion USD (June 2016). The investment practices of the Fund draw international attention, partly due to its mechanisms for socially responsible investing (SRI).
The Norwegian Parliament has sought to ensure that the Fund does not contribute to unethical acts or omissions, such as violations of fundamental humanitarian principles, serious violations of human rights, gross corruption or severe environmental damage. It has established two main mechanisms to avoid such complicity. These mechanisms ensure that the Fund is involved in ‘Socially Responsible Investing’ of two distinct kinds: An activist approach through shareholder engagement, and a negative approach. Regarding the latter, a Council on Ethics assists the Ministry of Finance and the Fund, so as to avoid the risk of moral complicity in particularly problematic cases. The Council may recommend that the Minister of Finance exclude certain corporations from the portfolio of the Fund.
Chris Armstrong has recently challenged the Norwegian Pension Fund, asking “Are Norway’s claim to sovereign control over the oil resources sound, by standards of global distributive justice, ‘such that they might override calls for global redistribution”? He instead argues that a global tax is required by global distributive justice.