Morals in Markets – The Relationship Between Ethics and Efficiency: The Case of the Norwegian Government Pension Fund

About the project

The Norwegian Government Pension Fund (GPFG) is the largest government run investment fund in the world. Its role in the global financial market has drawn attention to its ethical and moral implications, given its responsibility to act in the best interest of its citizens while maximizing returns and generating long-term value for its beneficiaries. This thesis aims to analyze the tension between ethics and efficiency in investment management, using the GPFG as a case study.

The research questions include the conditions under which there is a trade-off between efficiency and ethical investment, how publicly funded institutions balance ethical considerations and financial efficiency in their investment management strategies, and the impact of the integration of environmental, social, and governance (ESG) factors on the financial performance of such institutions.

The thesis explores the ethical considerations involved in managing the fund and analyzes the investment strategies and policies of the fund, the ethical guidelines it has adopted, and the impact of its investments on various stakeholders. The focus is on the GPFG's investment strategies and ethical frameworks, shedding light on the complex relationship between ethics and efficiency in the context of investment management.

The study's scope is limited to responsible investments, which involves considering ESG issues when making investment decisions and influencing companies or assets, complementing traditional financial analysis and portfolio construction techniques. The purpose of the GPFG is to secure and enhance wealth for future generations by achieving the highest possible return with moderate risk, taking a long-term perspective and diversifying investments globally. The fund is guided by internationally recognized principles and standards endorsed by the UN and the OECD, serving as a framework for engagement with companies and other stakeholders across a range of areas, including children's rights, climate change, human rights, tax and transparency, etc.

In summary, this thesis provides insights into the complex relationship between ethics and efficiency in investment management and the ways in which public funds can navigate this tension to achieve their goals. The GPFG serves as a case study, highlighting the importance of responsible investments and the principles and standards guiding the fund's engagement with companies and stakeholders.

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Pictures:

1. Some data from the GPFG
2. Norwegian flag on a boat in the sea
3. Me working on the thesis

Project members

Ulderico Alessandro Rabagliati

About the client

Østfold University College
Faculty of Computer Sciences, Engineering and Economics
Department of Economics, Innovation and Society

Supervisor

Jørn Inge Halvorsen, Høgskolen i Østfold