Capitalism 2.0


The laissez-faire capitalism is dying as the society's tolerance for bad behavior in the business world is waning. Several companies on the Oslo Stock Exchange are therefore at risk.

Volkswagen’s shareholders have had a tough autumn. Many believe the crash in the stock price is a buying opportunity.

However, this is far from certain. Society's tolerance for fraud and misconduct in business has collapsed after the financial crisis and is at a historical low.

Regulatory pressures are increasing in many industries, and the same applies to fines against those who do not follow the rules. Given the prevailing anger at companies with unacceptable behavior we might only have seen the beginning of the nightmare for the Volkswagen Group.


The public companies are now increasingly expected to act as responsible corporate citizens and not just as profit-maximizing enterprises. This includes the moral duty to pay tax.

Many companies, especially large international groups, have created complex legal structures that enable them to get away with minimal or no taxes. On the Oslo Stock exchange this applies to RCL and a number of shipping and offshore companies.

Society's tolerance of such "free riders" is declining, creating increasing tax risks. Companies such as Starbucks and Fiat experienced this when the European commission ruled against their unreasonably favorable tax treaties with the tiny state of Luxembourg.


The willingness to let businesses pollute and destroy the environment and allow others to be left with the bill and problems is also decreasing.

Signs of a political breakthrough in the climate change negotiations are of a particular importance for Norway. The pressure from the public opinion to avert a climate catastrophe has reached critical mass, and the fossil fuel industry is increasingly isolated in its resistance.

The Governor of the Bank of England, Mark Carney, recently warned that climate change could trigger a new financial crisis. If the two degree climate change target is to be reached, the majority of the world’s oil and coal reserves must remain in the ground. If that happens, banks, pension funds and insurance companies with debt and equity exposure to the fossil fuel industry could face catastrophic losses.

Fossil fuel companies that actively combat the science of climate change should bear the tobacco industry in mind. In 1998 the US tobacco manufacturers were ordered to pay 206 billion dollars in compensation for hiding information about how dangerous their product was for a number of years.

Corruption, cartel

Corruption and cartels are other risk factors that one should be wary of.

We can mention that Wilh. Wilhelmsen has a cartel investigation going against them, while Sevan Drilling is in the middle of a large corruption scandal in Brazil.

The chairman of Telenor has also recently been fired by the Minister of Trade and Industry for taking the corruption scandal in partly owned Vimpelcom too lightly.

Sanctions revoked?

This week we put Marine Harvest into our portfolio. According to contacts who are close to the negotiations between the West and Russia on the Ukraine crisis, the progress has been good lately, and if this continues, the sanctions might be lifted already next spring.

That would be good news for Russian stocks and the Norwegian fish farming industry. The outlook for the price of salmon is in any case positive since production growth will be minimal in the coming year.


  • RCL
  • Panoro Energy
  • Veidekke
  • Tomra
  • Aurora LPG
  • Marine Harvest

In: Marine Harvest

Out: Schibsted A