Norway’s Opposition Wants to Treat $1 Trillion Wealth Fund as Political Tool
Norway’s Opposition Wants to Treat $1 Trillion Wealth Fund as Political Tool
(Bloomberg) -- The leader of Norway’s biggest opposition party wants his country to start treating its $1 trillion wealth fund as a political tool, setting the stage for a more activist role for the giant investor.
The comments by Labor Party leader Jonas Gahr Store mark a change in rhetoric for Norway’s biggest political group and go against the consensus among the largest parliamentary parties. Labor’s next stab at returning to government will come in 2021, when the country is due to hold elections.
If the opposition wins, Labor’s shift in stance could change the way in which the world’s biggest wealth fund operates. Past years have already been marked by numerous initiatives from lawmakers, and the fund itself has been viewed as increasingly activist as it speaks out on excessive executive pay, human rights abuses and climate change.
“I think we can start getting used to saying that our pension fund is a political tool,” Store said on Wednesday during a panel debate with Prime Minister Erna Solberg, at the Zero Conference in Oslo. “Until now we haven’t dared to say it -- it’s obvious that 10,000 billion kroner is politics.”
Store, a former foreign minister and the leading contender to become prime minister if the opposition carries the next election in line with current polls, said a “mature” Norway should be able to debate the issue without becoming irresponsible or activist. A “conservative” approach to responsible investment “won’t cut it,” he said.
‘Extremely Dangerous’
The prime minister, who leads Norway’s Conservative Party, immediately countered that Store’s comments were “extremely dangerous.”
“If you signal that the fund will now become a political tool, then every other country will interpret this,” she said. “We will then have given ourselves a foreign-policy challenge with our oil fund. We will be shooting ourselves in the foot.”
Solberg’s party later said in a press release that Store’s comments were a “dramatic shift” and warning that the fund could risk losing billions of kroner on pursuing climate and foreign-policy goals.
The wealth fund has long been banned from investing in tobacco and certain kinds of weapons. It’s also not allowed to hold companies related to severe environmental damage or human rights abuses. Norway cleared the fund to exit some oil companies this year, although that decision was originally a proposal from the fund itself that was heavily watered down by the government.
Moving Closer
Labor had shown signs of moving closer to some of its parliamentary allies on how to manage the fund. The party was the driving force behind a partial ban on coal investments in 2014, which has since been tightened. More recently, Labor unsuccessfully proposed that the fund exit gambling companies.
“I’m glad to hear that Jonas has also come to this realization,” Arild Hermstad, spokesman for the Greens, said in an emailed statement. “The key now is how we can take this a step further and really use the enormous money pile to ensure the future of our grandchildren and solve the climate crisis.”
While Labor’s change of tone will likely please the Socialist Left Party and potential partners like the Green Party, the prime minister’s rebuttal of Store was reminiscent of past warnings from the government bloc against letting the fund become a policy tool.
The ruling coalition earlier this year set up a commission that will go through the fund’s ethical guidelines and present a report by June.
Norges Bank Investment Management, which manages the fund, declined to comment.
To contact the reporters on this story: Sveinung Sleire in Oslo at ssleire1@bloomberg.net;Mikael Holter in Oslo at mholter2@bloomberg.net
To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Stephen Treloar
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