Abstract
This paper aims at presenting the Norwegian Government Pension Fund Global (GPFG), the world’s largest Sovereign Wealth Fund, characterized by its pioneering ethical guidelines for investment decisions, based on active ownership and the exclusion of firms from its portfolio. Two major reasons for the exclusion of a company is “severe environmental damage” and “coal production”, leading to the banishment of many companies from the Fund’s holdings. Despite the noble intentions, the GPFG is loaded with inconsistencies, especially because its resources come from the exploitation of fossil fuels that contribute to global greenhouse gas emissions. Moreover, the entire Norwegian environmental policy is fragmented and suffers from contradictions.
Highlights
Sovereign Wealth Funds (SWFs) have attracted a great deal of attention of economists during the past decade
Norway’s prudent oil rent management is reflected in its Sovereign Wealth Fund, the so called Government Pension Fund Global (GPFG), the largest SWF in the world aimed at keeping macroeconomic stability and intergenerational distribution of petroleum wealth
The GPFG is loaded with inconsistencies, especially because its resources come from the exploitation of fossil fuels that contribute to global greenhouse gas emissions
Summary
Sovereign Wealth Funds (SWFs) have attracted a great deal of attention of economists during the past decade Their sources of capital, objectives and investment strategies are very diverse and their actions are sometimes quite opaque. One of the major reasons for the exclusion of a company is “severe environmental damage” and several businesses were banished from the fund’s investments These guidelines lack geopolitical intentions and only aim at raising awareness among other institutional investors to consider responsible investments when selecting their portfolio and pressure companies to halt unethical practices. This work aims at presenting the Norwegian Sovereign Wealth Fund, its role as a macroeconomic stabilization and savings fund, and its focus on responsible investment, on climate protection. The article consists of a case study from the approach of Political Economy and mainly uses statistical assessment through secondary data acquired from several international organizations as well as an analysis of reports and white papers
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