NORWAY – The Ministry of Finance has introduced two new sets of ethical guidelines for responsible investment practices at the Government Pension Fund Global and its asset manager Norges Bank.
The new guidelines introduce the practice of excluding or observing companies that don't meet responsible investment criteria. They also put more pressure on Norges Bank to exercise its ownership right. These replace the existing ethical guidelines the scheme had been following since 2004.
Norway has already taken responsible investments into account when determining what securities to hold in its portfolio. In January, the scheme divested from 17 tobacco producing companies including Philip Morris and British American Tobacco. (Global Pensions; January 19, 2009)
"Production of tobacco has been introduced as a new criterion for exclusion, and we have already followed up the Council on Ethics' recommendations to sell our holdings in tobacco producing companies," said minister of finance Sigbjørn Johnsen.
The Ministry said the new guidelines enable a slightly broader assessment of the situation before a company is excluded on grounds of grossly unethical behaviour. In these cases, the Ministry will consider the use of other measures.
Johnsen said: "In some cases, it is more useful to put a company under observation than to exclude; for example, if there is uncertainty about how the situation will develop.
"We monitor the companies that have been placed on this watch-list closely to see if they implement measures to remedy the situation before we make a final decision on whether to exclude the company or not. We are increasingly attaching importance to Norges Bank's active ownership."
In addition, the Ministry is working on other measures in the field of environmental investment and climate change.
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