chapter  3
20 Pages

Profit, aid and ethics in public financialization

Paradoxes surface when large public investors aim to achieve ecological and social responsibility – along with maximization of profits – from financial investments. Norway’s two largest investment funds, The Norwegian Government Pension Fund – Global (GPFG), and The Norwegian Investment Fund for Developing Countries (Norfund), are both owned and controlled by the state. Both of these funds are involved in various portfolios, however, with increasing interests in the agricultural sector and land investments and development. The GPFG investments in agriculture or land is indirect, through companies or businesses, and is merely a reflection of the market and the general rush for agricultural commodities and land. GPFG’s investments are monitored by the Council on Ethics, and companies behaving unethically can be excluded or put under observation. However, land investments are not among the categories this Council is expected to scrutinize. The much smaller Norfund has a mandate to invest in projects and sustainable businesses, including start-ups, in developing countries, focusing on both profit maximizing from their investments, as well as economic growth and poverty reduction in developing countries. When Norfund becomes involved in land-related issues, it is done on the basis of close considerations related to economic growth and business opportunities. This chapter describes and discusses some of the existing mechanisms for sustainable management and opportunities for influencing investment behaviour of these large global players, as well as some of the paradoxes arising when they try to balance profit maximization and ethical/social considerations.