OPINION
by Svein Richard Brandtzæg, Head of the Council on Ethics for the Government Pension Fund Global
The fund’s ethical flagship could be re-rigged into a toothless internal advisory group. The proposals in the recent Gjedrem report involve a dramatic weakening of the fund’s ethical compass.
Norway has been a beacon for responsible asset management for over twenty years. We have shown that it is possible to manage enormous assets without compromising human rights, international law and the environment.
The basis for this Norwegian model is the ethical guidelines, issued by the Storting, which draw up some limits for what the Norwegian population finds it acceptable for us to invest our collective savings in. The guidelines have been followed up by an independent ethics council with a clear mandate – we were to assess the risk of violations of these guidelines and provide advice on the exclusion or observation of companies where the risk of future norm violations was too high.
Norges Bank (Central Bank of Norway) then made the final decisions on exclusion, observation, or other ownership follow-up of these companies. Subsequently, the Council on Ethics’ assessments and the bank’s decisions were made public.
This model has contributed to a consistent, predictable, thorough, and open practice of the ethical guidelines, and thus to depoliticizing decisions on the exclusion of individual companies.
Through the independent Council on Ethics, the Norwegian population has had a guardian of our common ethical norms – even when it stings a little economically or politically.
Now the Gjedrem Committee is proposing changes that touch on the very foundation of this work.
The proposals in the recent report involve a dramatic weakening of the fund’s ethical compass.
I can’t take responsibility for that.
There are two particularly unacceptable pillars in the committee’s proposal:
First, the Council on Ethics will be permanently cut off. The committee will deprive the Council on Ethics of its right to make independent recommendations on the exclusion or observation of companies. The Council will be reduced to a purely advisory body for Norges Bank’s corporate dialogues. Norges Bank will also be given a new and strengthened mandate to balance the ethical obligations towards those affected by companies’ activities against the financial interests of the fund.
When the person who is to assess ethics also has as a primary mandate to achieve the highest possible return, the risk is clearly present that economic considerations will in practice trump ethical responsibility. The Council on Ethics risks becoming a sand-casting body whose primary function is to legitimize the assessments and decisions of others.
I can’t take responsibility for that.
Secondly, transparency is being sacrificed on the geopolitical altar. The openness about why companies are excluded has been a clear strength. Open recommendations document to the world that the Petroleum Fund treats everyone equally, and it operationalizes the ethical threshold so that everyone, including other companies, knows where our boundaries are.
Now closed processes and far-reaching exemptions from public scrutiny are being proposed, ostensibly to shield Norway from geopolitical discomfort and pressure from major powers. But ethics that bend when the storm hits is no ethics – but can be interpreted as political opportunism.
Both of these pillars will have far-reaching consequences for the ethical practices of the Petroleum Fund.
Not least if the ethical normative force is set aside. And the Gjedrem Committee also goes far in pointing out a course where ethics are downgraded – for example by giving repeated guidance that exclusion and disclosure are assessed in relation to economic or political cost.
If the Gjedrem Committee’s proposal is upheld, the DNA of the Petroleum Fund will change.
The chair of the Ethics Council of the huge Norwegian Sovereign “Oil Fund», Mr Brandtzæg,
— Jan Egeland (@NRC_Egeland) October 28, 2026
says he will resign if the Council can no longer give independent and public recommendations to avoid unethical investments.
He is clearly right. The Fund cannot sacrifice its moral compass for increased profits.
https://t.co/5MUl53KPgY
Comments are closed.