Norway's Oil Fund is often cited as a great example of foresight and stewardship (at least as compared to the UK's splurging of its share of North Sea oil revenues). Interesting, therefore, to see that its Council of Ethics has blacklisted G4S over human rights concerns in the Middle East.
The Council was introduced in 2004, after a series of controversial investments. The fund has returned 5.92% per year on average since then. Not bad for an explicitly "long term" fund in the context of choppy economic conditions.
Investors are increasingly using ESG analysis (often involving AI-enabled screening) as part of their decision-making process. (The Council uses analytics from RepRisk). It will be interesting to watch whether those who adopt such tools end up outperforming the market and, if so, over what time horizon. If the thesis that ESG factors do affect company performance proves to be true, it stands to reason that the quality of data and analysis will make the difference between top-performing funds and the rest.
Norway’s sovereign wealth fund has banned all holdings of shares in G4S because of the risk of human rights violations against the British security company’s workforce in Qatar and the United Arab Emirates. Norway’s Council of Ethics, which monitors investments in the country’s £860bn Government Pension Fund Global (GPFG), said there was an “unacceptable risk of the company contributing to systematic human rights violations”. Up to 30,000 staff could be affected.