NORWAY - The Norwegian Government is re-evaluating the ethical guidelines currently in place for the Norwegian Pension Fund - Global to ensure "they function as intended".

Speaking today at the "Investing into the Future" conference, hosted by the Norwegian Ministry of Finance, Norges Bank and the Council on Ethics, Kristin Halvorsen, finance minister, said because socially-responsible investments are becoming more mainstream it was important to receive any input which may "contribute to the strengthening of the ethical profile of the fund".

In her opening remarks Halvorsen pointed out while the pension fund is a global, long-term investor with exposure to every business, "we believe social and environmental responsibility creates the best conditions for high, sustainable long-term returns".

"It is my hope the forthcoming evaluation process of the ethical guidelines for the PFG may strengthen this trend and contribute to our joint efforts to take on corporate social responsibility," she added.

Ethical guidelines were first introduced in 2004 as part of the framework for the management of the PFG - currently valued at around $300bn (€203bn) according to the government - but following continuing development in international best practice in this area, the Norwegian government has decided to evaluate the guidelines throughout 2008 to see if they work as originally intended during the coming year.

Gro Nystuen, head of the Council of Ethics, admitted the exclusion of companies based on ethical criteria is "a difficult task", and said input from research institutions, non-governmental organisation, government officials and other stakeholders "is essential".

In addition, Anne Kvam, head of corporate governance for Norges Bank Investment Management, which manages the fund's assets, confirmed ethics are a central part of corporate governance for Norges Bank.

"It is important to debate thoroughly and broadly how we can best utilise the overlap between ethics, corporate responsibility, and good returns," she added.

The issue appears to be especially important as Indian media reports elsewhere reveal one company has hit back publicly following its exclusion by the Norwegian pension fund investments and for comments about its ethical status.

The government announced in November 2007 UK-listed mining firm Vedanta Resources was being excluded from its investment universe because of human rights violations and for causing environmental damage which it "would not a positive direction. (See earlier IPE story: Norwegian fund excludes British company)

Additional speakers at the two-day Investing for the Future conference included Jan Egeland, director of the Norwegian Institute of International Affairs, and Hege Sjo, head of Nordic engagement and governance at Hermes Investment Management.

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