Norway’s Responsible Investing

Norway is one of the richest countries in the world, a result of the discovery of offshore oil in the 1960’s and the good practice of responsible investing since then. As the largest holder of natural gas and oil in Europe, Norway takes its position very seriously and invests a considerable amount in its own people

“Since 1990, [Norway] has directed surplus oil revenues into its Government Pension Fund, which is now worth more than $600 billion,” a fund that relies solely on Norway’s responsible investing says Gurneeta Vasudema, an Assistant Professor at University of Minnesota’s Carlson School of Business.

Vasudema believes leadership is not confined to individuals. Based on ethical and sustainable investment practices, Norway is a leader in responsible investment. Vasudema has done extensive research on Norway’s ability to invest with a purpose and she is fascinated by the effect this model can have on the rest of the world. Norway’s discovery of oil in the 1960’s was a significant boost to the country’s economy and confidence. It also helped defined the role the small country would play in the world for years to come. The offshore waters of Norway are now scattered with oil and gas fields making them the second largest natural gas exporter in the world and the seventh largest oil exporter in the world behind Saudia Arabia, Russia and the UAE to name a few. Norway has embraced their role as an oil and gas exporter and has used those revenues to make their nation great.

With a population of only 5 million people, Norway is a leader of responsible investing for countries around the world, many of which are suffering from great financial hardship and poor leadership. The country’s Government Pension Fund, which supports their cradle to grave security welfare system, grew by $100 billion in 2012 alone. With Norway’s success and remarkable growth, the government has influenced its own Norwegian companies to adopt their principles of responsible investing.

It is unusual to see a government taking the lead on responsible investing but Norway is ahead of their time and has set a new standard for the role government can play in the modern economy. “It shows how governments can be used as tools to shape industrial policy in their countries,” says Vasudeva. Most importantly, her research has proved that Norway’s leadership has and will continue to make a powerful impact on companies and countries around the world, thus altering the behavior of governments and their fiscal responsibilities.

Visit the Carlson School Magazine to read the full article: The Art & Science of Leadership.

You can find Vasudema’s presentation here.

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