Ethical Investment and Human Rights: A Norwegian Case
Nordic Journal on Human Rights, Vol. 25, No. 4, pp. 420-433, 2007
14 Pages Posted: 8 Sep 2010
Date Written: 2007
One interesting mechanism of Socially Responsible Investment (SRI) is the divestment arrangement for the Norwegian Government Pension Fund (Global). The Norwegian Parliament established a Council on Ethics to advise on the exclusion of certain corporations from the portfolio of the Fund, to prevent complicity with violations of fundamental humanitarian principles, serious violations of human rights, gross corruption or severe environmental damage. The article explores two issues concerning this mechanism, one practical and one normative. The first concerns the exclusion mechanism’s implementation, the second what we are to make of efforts to impose normative constraints on profit-seeking economic activity. Sections 1 and 2 present the ethical guidelines and show how the Council decides on its recommendations. Section 3 considers whether such SRI by large investors can be said to be effective and legitimate responses to the new challenges wrought by economic globalization. Section 4 indicates three of several possible roles the SRI may play, while section 5 draws some conclusions. In particular, the Norwegian government’s divestment efforts – primarily aimed at preventing complicity – may serve to prevent wrong-doing by others under certain conditions.
Keywords: human rights, divestments, Socially responsible investment, philosophy, globalization, Adam Smith, Norges Bank, forced labor, child labor, ILO
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