Currently, Ola Mestad is the chair of the Council on Ethics for Norway’s Government Pension Global (GPFG) and a professor of law at the University of Oslo. It has been reported that Ola Mestad is not as enthusiastic about the efficacy of Norway’s sovereign wealth fund in recent days, specifically its responsible investment criteria.
The ethics council has a list of companies to be excluded from the sovereign wealth fund’s investment universe. Some of the companies on the exclusion list include Fortune 500 companies like Lockheed Martin Corporation, Northrop Grumman Corporation, Wal-Mart Stores and Boeing Co. In addition, a number of excluded companies have substantial public funds as investors such as Rio Tinto Plc and Potash Corporation of Saskatchewan.
He said he “gets the feeling” that companies aren’t actually following through on their guidelines.
In a speech to attendees of the Ethical Investment Research and Investment Service’s (EIRIS) 30th anniversary conference in London yesterday, Mr Mestad was quoted as saying that the success of their responsible investing program makes it “superficial” in a way.
According to Mestad when Norway’s oil fund began their responsible investing criteria, they weren’t taken very seriously. Recently that has changed with public companies responding immediately to the giant institutional investor whenever it raises issues concerning the ethics of their operations.
In April of this year, Norway’s sovereign fund began divesting itself from oil companies with operations in Equatorial Guinea. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
The United Nations Children’s Fund (UNICEF), a United Nations programme headquartered in New York City, has partnered with Norges Bank Investment Management (NBIM) to facilitate a series of meetings between companies to discuss issues surrounding children’s human rights.
According to the news release, “the network will facilitate dialogue between leading brands and retailers in the garment and footwear industry to strengthen children’s rights.”
NBIM is invested in many listed companies and have invited them to join a network to tackle these issues. Over the next two years, the organizations plan to hold three workshops as well as quarterly meetings surrounding these issues.
“Over time, we hope and expect that the network will contribute to improved market practices among companies and greater respect for children’s rights,” says Carine Smith Ihenacho, Global Head of Ownership Strategies, in a NBIM press release.
The China Investment Corporation (CIC) has long struggled with its investments in coal assets, specifically in globally-listed coal miner SouthGobi Resources Ltd, which operates its flagship coal mine in Mongolia. In November 2009, CIC and SouthGobi Resources inked a convertible debenture deal. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
MSCI, a stock index company whose benchmarks influence investor behavior, has tremendous indirect power impacting the stock markets of smaller economies. In 1988, MSCI released its emerging markets index, a now-widely-used benchmark for many institutional investors wanting access to growth markets. China and South Korea make up the majority of the benchmark, but smaller economies such as Poland, Chile and even Qatar make up other pieces of it.
[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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