Here are two suggestions for how the Oil Fund can be run ethically

Finance Minister Jens Stoltenberg of the Labour Party gained a majority in Parliament to revise the ethical guidelines of the Oil Fund. But on what basis should companies be excluded, and is exclusion the best means of avoiding wrongdoing?

Stoltenberg believes that one cannot exclude all companies whose products are used for violations of international law. That will weaken the expected return and make the fund more susceptible to fluctuations.

But if it's unethical to invest in companies that are complicit in violating international law, it's not enough to say that we're going to make lots of money from it.

The future

That we save for our descendants is a more laudable reason, but it is still our descendants that we are talking about. Maximising returns therefore needs a better justification.

One attempt is to say that the fund's money investments do not contribute to anything. Whether we own shares in company X or Y has nothing to say for what the companies do.

The shares we own were issued a long time ago. We don't increase capital access to the company by holding on to them. Also, another investor will have to buy the shares in order for us to sell them.

If our shares do not influence the behavior of companies, it is apparently also meaningless to say that we are complicit in what companies do.

As shareholders, however, we have power. The oil fund can vote in a general meeting for companies to behave smoothly and act as a bellwether that gets other shareholders with them.

We deprive ourselves of this voting power by selling shares in companies. It may therefore appear that selling shares has a negative effect on the behaviour of problematic companies.

But this principled view is only for the foremost realists. With this line, one will justify all possible money placements, even in companies that build concentration camps. If that's where the profit is, run on! That's enough to make most of us look for other explanations of when we should exclude companies, including Stoltenberg.

Unreasonable?

According to an alternative view, it has a moral intrinsic value to not be part of the process that leads to violations of international law. Admittedly, the same event would have happened, with or without us, but it is now we who get involved when it is our money placement. And you should not get involved in unethical actions, even if it affects your own wallet and the wallets of those who come after us.

This more or less Kantian explanation, however, goes too far. An international company that makes fertilizer products that are bought by Israeli farmers, and which ultimately end up as food for Israeli soldiers, would then be involved in violations of international law. To exclude such a company on such a basis is obviously unreasonable.

A better explanation is that it is not involvement as such, but rather intentions that count. Bet Shemes, which the Oil Fund excluded before the summer, wants to assist the Israeli war effort. If intentions are the criterion, they should be excluded on the basis of wrong intentions. Caterpillar and Microsoft, whose products can be used in unjust wars but apparently have not wanted to be used in this way, should be included.

The advantage of an intention criterion is that it produces plausible consequences. There are only a few companies that want to contribute to unethical purposes. This is how the fund will be able to remain a broad index fund. Nor can anyone complain that we exclude someone who has dedicated their business to an unethical cause. Probably this is exactly the criterion Stoltenberg is looking for.

Nevertheless, there are several difficult conditions that need to be clarified before intentions can become the Oil Fund's new demarcation criterion. For example, how do we observe intention? One possible operationalization is what proportion of the business is devoted to unethical purposes. But if so, how much of companies' business must be devoted to unethical purposes for us to say they intend something unethical?

And how foresighted should we require companies to be? If a tech company enters into a partnership with the Israeli army to sell KI systems and there is a predictable consequence that the technology will be used in illegitimate warfare, should we say they wanted to contribute to the war?

The doctrine of double effect, familiar from Catholic doctrine and modern ethics, can help us. According to the doctrine, a company can anticipate that the products it makes will be used for wrongdoing, without thereby intending that use. As long as the harmful impact is not a means to the company's legitimate ends -- but an undesirable side effect of producing something that also has acceptable purposes -- the action is basically permissible.

Compensation

Even if we base the intention criterion, we do not avoid being invested in businesses that at times contribute to violations of international law. We justify this in part with the consideration that the fund should maximize expected returns and that companies do not want the unethical outcomes. It apparently leaves a moral residue, which many residents will find problematic.

One possible solution for addressing this moral residue is to morally compensate for involvement in wrongdoing in other ways.

We achieve a higher return from not selling ourselves out of companies for ethical considerations than what we would have done if we had sold out. If we use part of this incremental return to a higher aid percentage or in other ways help prevent international wrongdoing, it will have a greater positive impact than if we pull out.

This is how we can make the world a better place for those who suffer injustice, while preserving the fund as a broad index fund. The cost is just a slightly smaller fund money use for us and future generations. It's a cheap price for a better conscience.

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