CSR guidelines incorporated into Norwegian corporate governance code

Boards to include CSR factors in risk management.

Last month saw a milestone for the corporate responsibility and responsible investment movement in Norway. The revised Norwegian Code of Practice for Corporate Governance was issued and included a clear statement of the board’s responsibility for corporate social responsibility (CSR). The code now states the following: The board of directors should define the company’s basic corporate values and formulate ethical guidelines and guidelines for corporate social responsibility in accordance with these values. As a result of the incorporation of CSR as a board responsibility, it is incorporated under the code’s paragraph covering risk management and internal control. The Norwegian Code of Practice for Corporate Governance is based on company, accounting, stock-exchange rules and securities legislation. It includes provisions and guidance that, in part, elaborate on existing legislation, but also cover areas not addressed by legislation. Adherence to the Code of Practice is based on the “comply or explain” principle. The code isaddressed in the first instance to the board of directors of a company, which must include a corporate governance report in the company’s annual report. It is principally intended for companies whose shares are listed on regulated markets in Norway, i.e. at the Oslo Børs and Oslo Axess and is part of the listing requirements. As a result, it will be interesting to see how this influences company behaviour and that of the Norwegian market as a whole. Through last year’s Sustainable Value Creation initiative – an investor driven project to elicit specific environmental, social and governance (ESG) information from Norwegian companies – we learned that approximately 50% of Norwegian listed companies declined to respond to investors’ request for CSR guidelines. We hope that the new governance principles will further improve the awareness and practice of value-creating CSR work in Norway and boost the numbers of companies reporting to their shareholders.
Jeanett Bergan is head of responsible investments at KLP in Norway