In the paper Pension Funds, Sovereign-wealth Funds and Intergenerational Justice from the Norwegian School of Economics, those Scandinavians have come up with something better than the national alcohol monopoly: a natty new finance term. “Intergenerational justice” (try saying it thrice after a glass of aquavit) seems to refer to a combination of two things: a nebulous financial security that sovereign wealth and pension funds can deliver to us, our children and even theirs, as well as an underlying assumption that this sustainable financial security is a moral obligation shared by all stakeholders.
Try another glass, I mean sip, of aquavit.
The paper states that these funds “represent an increasingly important group of shareholders” and that their financial success is of keen interest to future generations. The authors consider diversified portfolios and long time horizons crucial to the nature of these funds and describes the main obstacles to their “shareholder democracy”. These obstacles get in the way of sustainable development, which is of course the herald of intergenerational justice.
The paper is a questioning of the corporate governance structure at sovereign wealth and pension funds, and a sensible nudge for it to serve the interests of intergenerational justice. Read on in your best interest.
