The Norwegian Government Pension Fund Global (GPFG) as the full name reads has one of the world’s strongest ethical guidelines for their investments. Unfortunately, this has not included deforestation, which has allowed it currently to have USD 13.7 billion invested in sectors known to be major drivers of deforestation.
Norway’s Pension Fund has investments in forest-unfriendly endeavours such as oil palm plantations, cattle ranching, and mining over the past year, according to the Rainforest Foundation Norway and Friends of the Earth Norway, which jointly published their findings in “Beauty and the Beast-Norway’s investments in rainforest protection and rainforest destruction”.
The investments in many ways undermine the Norwegian government’s commitment to combat deforestation. When it comes to saving the world’s dwindling rainforest, Norway has been a leader in guiding the world toward sustainable forest management. The small country pledged USD 500 million annually toward REDD+ (reducing emissions from deforestation and degradation) in 2007.
It is obviously two separate entities. The role of Norway’s Pension Fund is to earn financial return for the country, whereas the Norwegian government’s pledge to save the forest is routed in a strategy to offset the country’s emissions.
It is therefore great that Norway Pension Fund says it is now incorporating rainforest protection as a key component of its ethical investment policy. Details of exactly how it will achieve that remain sketchy, but transparency advocates say the decision is part of a larger investor-driven trend towards more environmentally-friendly supply chains.
Its ethical investment policy includes an “ownership dialogue” on certain topics with companies in its portfolio. Key topics are children’s rights, water management and climate change risk management. Tropical deforestation would fall as a specific subject under the Fund’s work on climate change.
Norway’s Pension Fund has not unveiled how these dialogues will take place or if they will be available to the public. The Rainforest Foundation Norway, who has been monitoring the Fund since 2007 trying to force a change in the investment policy, is demanding transparency on how the dialogues will be implemented.
Hopefully the investments can be withdrawn reasonably soon. At least it will send an important signal that investment in forest destructing business is not right.
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