November 28, 2022

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- It is very difficult to control this - E24

– It is very difficult to control this – E24

The government requires all state-owned enterprises to provide a credible answer on how to achieve net zero emissions by 2050.

Ownership: Jean-Christian Pfister today filed a property notification.
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– It’s very difficult to control this. The whole issue of social responsibility and sustainability is somehow unsolvable, says Sverre August Christensen, associate professor at BI.

Christensen leads the BI project on state ownership in Norway. For the record – is a member of the Labor Party.

Industry Minister Jean-Christian Pfister on Friday presented the government’s plan for what the country would achieve by owning shares in a number of companies – also known as an ownership statement.

Ownership: Sverre August Christensen leads the BI project on state ownership in Norway

An insoluble dilemma

The notice contains changes and requirements for state-owned companies within, among other things, sustainability and executive salaries.

Among other things, the country expects companies to set targets and implement measures to reduce greenhouse gas emissions in the short and long term in line with the goal of the Paris Agreement to limit the increase in temperatures.

Christensen calls the requirement an “unsolvable dilemma”:

The company has to make money, after all. But there are many problems in life and work that cannot be solved, they must be dealt with anyway.

He points out that the demand now for SOEs is in line with what is already being done by other owners of listed companies.

The demands of ESG owners and sustainability have become storable commodities.

At Friday’s press conference, Vestri described the report as a “seven-mile step on climate” –

– Pfister said at the press conference that all state-owned enterprises must provide a credible answer on how to reach net zero emissions by 2050, in line with the Paris Agreement.

In addition, companies will be obligated to set new scientific goals for climate and nature conservation as science progresses.

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The principle of democracy

Vestre will also slow down higher senior management salaries. If the state-owned enterprises want to increase the salaries of managers higher than other employees of the companies, this must be justified separately.

Access to awarding rewards should also be restricted.

This differs greatly from the private business world, Christensen stresses.

– What they say is that you should be happy to make good money and get a high salary, but if you want to earn more, the company should discuss this at the general meeting. He says it is a sound democratic principle.

Many have argued that the best management candidates can be missed by putting an end to the state’s high top management salaries. But Christensen believes it’s not the result of anxiety.

– But if the salaries of the top management are lower, this may be reflected at the lower levels in the company. Then it may be more difficult to recruit people to second and third tier companies, and then they may prefer other companies with higher salaries, he says.

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