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59
2010; Kagawa and Leavitt, 2010; Lowe
et al
., 2010; Tnah
et al
.,
2010a,b), classification of operational region based on degree
of illegal activity, and perhaps augmented by satellite imagery
monitoring (Broich
et al
., 2011a,b). (A financial analogy would
the work of the rating agencies such as Moody’s and Standard
& Poor’s that provide credit ratings for companies and coun-
tries.)
The financial manager, the Central Bank, would then be direct-
ed to calculate the return on the fund’s portfolio by discounting
company returns using the risk factor. A similar discounting
factor could be applied to returns earned from investments in
companies like BlackRock, who in turn manage investments
in companies the CoE define as risky. (The information on
how much exposure BlackRock
et al
. have to companies like
Samling Global is readily available. Even if it weren’t, a major
investor like the Norwegians could seek, via a shareholder reso-
lution or otherwise, to have their companies make the informa-
tion available.)
This approach requires no major legislation or international ne-
gotiation. In Norway it could be mandated by the MoF, possibly
even referencing an international illegal logging (ILL) risk rat-
ing that could be developed under the INTERPOL-UNEP LEAF
programme. That is not to say that it would be a popular move,
for a key element would be to link the compensation of the fund
managers in the Central Bank to the risk adjusted returns.
However if this was implemented then ethics would really be
communicated in a language the financial system understands.