Norway's $800 bln fund should lose independent ethics panel -report

Mon Nov 11, 2013 11:43am EST
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* Central bank should decide on which firms to avoid-report

* Critics says this will weaken ethical stance of fund

* The central bank runs the sovereign wealth fund

* Report calls for research on ethical impact on returns

By Gwladys Fouche and Joachim Dagenborg

OSLO, Nov 11 (Reuters) - The ethics panel that decides which firms Norway's $800-billion wealth fund should avoid should lose its independence and become part of the central bank, a report said, a shift critics said would undermine the fund's ethical strategy.

The report by a government-appointed commission also called for more research on the performance of ethical investments, saying a lack of such studies made it difficult to assess how the fund's stance compared with other strategies.

The fund, which is run by the central bank, is the world's richest sovereign wealth fund and holds about 1.25 percent of all global equities. Its decisions are closely followed by international investors.

Its exit from its investment in Walmart, the world's largest retailer, in 2006 for alleged breach of human rights and labour rights led to other funds doing the same, including Sweden's four national pension funds and the Netherlands' PGGM pension fund. Walmart declined to comment on the decision at the time.   Continued...