Ethical Investment: Workable and Effective? The Case of the Norwegian Government Pension Fund

Economia Exterior, 2006

8 Pages Posted: 20 Sep 2011

Date Written: September 20, 2011


The Norwegian Government Pension Fund merits international attention, not only because of its size but also in terms of its mission. On the one hand, the Fund shall ensure that a reasonable portion of the country’s petroleum wealth benefits future generations, so it must generate a sound return in the long term.

At the same time, the Norwegian Parliament does not want the Fund to contribute unethical acts or omissions, such as violations of fundamental humanitarian principles, serious violations of human rights, gross corruption or severe environmental damage. A Council on Ethics is established to prevent such risk.

How are these two objectives pursued, and conflicts among them resolved? And what are we to make of such efforts to impose normative constraints on profit-seeking economic activity? The present article explores these issues. Sections 1 and 2 present the ethical constraints and shows how the Council decides. Section 3 then considers whether such actions by large investors can be said to be effective and legitimate responses to the new challenges wrought by economic globalization. Are ethical constraints on investments a plausible response to the reallocation of obligations of governments, companies, NGOs, investors and citizens? Section 4 draws some conclusions. The mandate of the Council on Ethics mainly seeks to avoid complicity in wrong-doing, but its work may also contribute to prevent the wrong-doing by others.

Keywords: Ethics, Norway, Pension

Suggested Citation

Follesdal, Andreas, Ethical Investment: Workable and Effective? The Case of the Norwegian Government Pension Fund (September 20, 2011). Economia Exterior, 2006. Available at SSRN:

Andreas Follesdal (Contact Author)

Pluricourts ( email )

P.O. Box 6706
St. Olavs plass 5
0130 Oslo

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