The Strategy Council of the Pension Fund Global, Norway’s sovereign wealth fund, has been asked by the Norwegian Ministry of Finance to provide a report on responsible investing by next Monday 11 November.
The Ministry, and the fund, one of the biggest investors globally, relies on the Strategy Council for two key objectives: to “strengthen both the legitimacy and foundation of the long term investment strategy for the GPFG,” and “Through independent and critical reviews, the Council will give advice on how to develop the strategy further, increase transparency and encourage debate on important decisions related to the investment strategy for the Fund.”
Current members of the Council, according to information provided by the Ministry include:
Elroy Dimson, who is emeritus professor of Finance at London Business School,
Antti Ilmanen, senior portfolio manager at Brevan Howard,
Øystein Stephansen, senior analyst in DnB NOR Markets, and,
Eva Liljeblom, professor of Finance and rector at Hanken School of Economics in Finland.
The report will be the first by the Council since a new government was appointed in October this year following elections.
According to links provided by the Ministry, the Council’s mandate was last reviewed in 2010 under the then second administration of prime minister Jens Stoltenberg.
The new government is led by Erna Solberg, who heads a centre-right coalition rather than a centre-left one. The mandate of the Pension Fund Global came under the spotlight during the election, when its investment objectives and the use of the returns it makes were queried during the hustings.
While the Ministry of Finance does not make investment decisions for the fund per se, it does oversee the mandate that the fund’s manager Norges Bank Investment Management is tasked with following. In recent years changes have included adding exposure to property assets. The fund is also tasked with responsible investment ideas, which for example, have seen it take an active investor stance against companies that it feels have not met requirements relating to environmental, social and governance factors.
The Ministry is also answerable to parliament for aspects of the fund, including its management, because it is used as part of the country’s long term savings strategy and is directly linked to annual budget calculations, for example, through rules that are intended to stop sitting governments from dipping into the fund to enable excessive deficit spending.
The Pension Fund Global, which is topped up by revenues from the country’s oil and gas industry, reported that it made a 5% return in the third quarter of 2013, or some NOK228bn (€28.3bn).