The Ministry has included a chapter on responsible investments in the management mandate. The Mandate provides that the manager, Folketrygdfondet, shall have internal guidelines for integrating considerations regarding good corporate governance and environmental and social issues in its investment activities, in line with internationally recognized principles for responsible investment. Folketrygdfondet shall integrate these considerations in its investment strategy and in its role as an investor and creditor. The Mandate further stipulates that the exercise of ownership rights shall be based on recognized international standards. Folketrygdfondet shall actively contribute to the development of good national standards for responsible investment practice and active ownership. The Ministry has also issued guidelines for observation and exclusion from the Government Pension Fund Global (GPFG). Norges Bank is responsible for decisions on the observation and exclusion of companies, based on the Council on Ethics' recommendation. Folketrygdfondet's Nordic portfolio is subject to decisions regarding the exclusion of companies from the GPFG investment universe.
Folketrygdfondet's guidelines and procedures operationalize the above principles and requirements.
For Folketrygdfondet, ESG incorporation is about reducing risk and achieving increased returns over time. We have financial reasons for evaluating portfolio companies’ actions in relation to ESG issues. As a large, long-term investor, we also have a financial motivation to contribute to well-functioning capital markets in Norway and the Nordic region. We expect companies to operate in accordance with international standards and norms for responsible business conduct, such as the UN Global Compact and the OECD Guidelines for Multinational Enterprises.
Folketrygdfondet has chosen integration as our main ESG incorporation strategy as it best fits our goal of achieving increased returns over time through responsible investment.