Walmart
Social Responsible Investment
Why Norwegian Pension Fund divest Walmart
The Norwegian Pension Fund divested its $416 million stock of Walmart, which is the largest supermarket chain in the world. The reason of divesting is that Walmart bear “unacceptable risk of contributing to serious or systematic human rights violations”. Is this move reasonable for the fund? Given that Walmart had a good return on investment and already emphasis the ethical responsibilities to its suppliers.
Norwegian Pension Fund
Norwegian Pension Fund is the national pension fund for all Norwegians, it served a purpose of ensuring of fair distribution of wealth and reduce the effect of oil price. While ensuring a good return on the investment, the fund also appointed a council to evaluate the ethical conditions of the companies they invested in. The companies who violated the ethical obligations set up for the fund. Apart from Walmart, they had excluded other companies from their portfolio.
One of the reason that they implement the ethical framework is that the fund is not only focus on the absolute return of the fund, it also aimed at ensure that the wealth is well distributed across the generations.
Walmart – A systemic risk?
Being the largest retailer in the world, Walmart has very complicated ethical challenges to deal with. The ethical challenges were either from the company itself, such as gender discrimination and union problems, or from the deep supply chain. From the article we can see that Walmart already implemented an extensive framework to deal with the potential ethical conflicts. Within the firm, the firm tried to comply with local laws and the culture norms. Also, in their procurement center, Walmart also tries to work with NGOs to audit its suppliers. We could not ignore that Walmart was trying to deal with the ethical challenges it faced.
However, as Walmart is too big, it became a systemic risk, as a lot of shareholders depend on it, and it is hard to diversify away.
Why Norwegian Pension Fund divest Walmart
The Norwegian Pension Fund divested its $416 million stock of Walmart, which is the largest supermarket chain in the world. The reason of divesting is that Walmart bear “unacceptable risk of contributing to serious or systematic human rights violations”. Is this move reasonable for the fund? Given that Walmart had a good return on investment and already emphasis the ethical responsibilities to its suppliers.
Norwegian Pension Fund
Norwegian Pension Fund is the national pension fund for all Norwegians, it served a purpose of ensuring of fair distribution of wealth and reduce the effect of oil price. While ensuring a good return on the investment, the fund also appointed a council to evaluate the ethical conditions of the companies they invested in. The companies who violated the ethical obligations set up for the fund. Apart from Walmart, they had excluded other companies from their portfolio.
One of the reason that they implement the ethical framework is that the fund is not only focus on the absolute return of the fund, it also aimed at ensure that the wealth is well distributed across the generations.
Walmart – A systemic risk?
Being the largest retailer in the world, Walmart has very complicated ethical challenges to deal with. The ethical challenges were either from the company itself, such as gender discrimination and union problems, or from the deep supply chain. From the article we can see that Walmart already implemented an extensive framework to deal with the potential ethical conflicts. Within the firm, the firm tried to comply with local laws and the culture norms. Also, in their procurement center, Walmart also tries to work with NGOs to audit its suppliers. We could not ignore that Walmart was trying to deal with the ethical challenges it faced.
However, as Walmart is too big, it became a systemic risk, as a lot of shareholders depend on it, and it is hard to diversify away.