The Environmental Fund
The Environmental Fund was established on 31 January 2001, with capital of NOK 1 billion. A further NOK 1 billion was transferred to the Environmental Fund on 31 January 2002. The Fund was a part of the Government Petroleum Fund and it was managed by Norges Bank. With effect from 1 December 2004 the Environmental Fund was included in the Petroleum Fund’s ordinary portfolio.
The Environmental Fund was invested exclusively in equity instruments in 22 developed markets in Europe, the Americas and Asia/Oceania. The fund could only be invested in companies that were assumed to have limited negative influence on the environment, and in companies that met specific given environmental reporting and certification requirements. The environmental requirements were based on analyses from the British consulting company Ethical Investment Research Service (EIRiS).
The Environmental Fund comprised about 80 per cent of the market value of the companies in the FTSE indices of the countries in question.
The Fund was evaluated in the Revised National Budget for 2004. Based on an overall assessment, the Ministry of Finance concluded not to continue the trial arrangement involving a separate environmental fund as a sub-portfolio of the Government Petroleum Fund when ethical guidelines that include environmental considerations were established for the entire fund.
The Exclusionary Mechanism and the Advisory Commission on International Law
On 30 November 2001 the Ministry of Finance appointed an Advisory Commission on International Law for the Petroleum Fund. The Commission should, on request from the Ministry of Finance, provide an evaluation of whether specific investments were in conflict with Norway’s commitments under international law.
In line with a recommendation from the Commission, the Government decided on 26 April 2002 that securities issued by the company Singapore Technologies Engineering be excluded from the Fund’s investment universe because it was considered highly probable that this company manufactures landmines.
When the Ministry of Finance issued ethical guidelines for the Government Petroleum Fund in autumn 2004, the exclusionary mechanism was extended and the Advisory Commission on International Law was replaced by the new Advisory Council on Ethics.