Norway’s $1 trillion wealth fund to firms: Fight corruption

OSLO-Reuters

Norway’s $1 trillion sovereign wealth fund, which is the world’s largest, set out new expectations on Feb. 13 for how the 9,100 companies it invests in should make fighting corruption a priority.

The fund suggested, among other things, that boards should ensure that firms establish anti-corruption policies and procedures to prevent and address corruption and that these should be clearly communicated to employees.

“Data on corporate governance and sustainability can influence our investment decisions. Our goal is to reduce the fund’s risk,” Chief Executive Yngve Slyngstad of Norges Bank Investment Management, a unit of the central bank, said in a statement.

“We want companies to move from words to numbers so that we can get a better understanding of financial opportunities and risks,” he added.

“Companies should have a whistleblowing mechanism that provides a separate and confidential escalation route when reporting through a line manager is not appropriate, or if the whistleblower wishes to remain anonymous,” the fund said in the document.

The fund funnels the proceeds of Norway’s oil and gas production. It invests in some 9,100 companies worldwide, as well as bonds and property.

It is forbidden by law from investing in firms that produce nuclear weapons or landmines, or are involved in serious and systematic human rights violations, among other criteria.

The fund from time to time publishes its explicit expectations to all companies it invests in and the document on corruption follows a 2017 policy on transparency in tax payments.

“The fund is managed for future generations, and we rely on sustainable business practices to create long-term returns,” Slyngstad said.