Norway Financial Fund Tightens up Protective Rules for Rainforests
Norway's sovereign wealth fund – which is worth $650 billion – has begun to ask the companies in which it invests whether or not they are seeking to mitigate their impact on the world's rainforests. Green groups have welcomed the news, which suggests that the country may be inclined to rethink some deals if they fail to demonstrate conservationist thinking and protective business activity.
A positive move
The news, announced without any fanfare in September, is particularly interesting given the importance of the fund, which is one of the biggest institutional investors in the world. The country's national Rainforest protection foundation has expressed a hope that the policy changes for the fund will mean that it backs off from companies that continue to damage rainforests.
The change also answers previous criticisms about Norway's history with ‘uncritical' investment decisions from industries that have threatened rainforests – such as cattle ranching, oil and gas, palm oil, pulp, logging, hydropower and paper. The fund – which is in place to manage Norway's oil revenue surplus – says that it will not be investing in any companies that are damaging the environment. Additionally, it has said that Norway expects companies to be actively managing risks of environmental damage and the impact of climate change that arises from tropical deforestation and the emission of greenhouse gas.
Potential investment companies will now have to provide business information about the impact of their operations on the rainforest over time and demonstrate how their activities comply with international standards designed to protect forests. The funds guidelines have referred to the problem of global warming in the past, but this is the first time that it has specifically mentioned rainforest preservation. It's positive to see ‘big business' continuing to force positive action to save the rainforest.