Investment Management Essay Question
INVESTMENT MANAGEMENT ESSAY QUESTION 2
Explain how you will respond when the President of Norges Bank Investment Management, which
manages the assets of the world�s largest sovereign wealth fund, �The Government Pension Fund
Global of Norway,� calls upon you in your Michigan office to tell you that the Fund is no longer happy
with your company�s record of caring for the environment. Specifically, the President tells you that her
fund wants Ford to announce the cessation of manufacturing of all gasoline and diesel powered cars and
trucks within two years. The Fund owns 4.99% of Ford common stock and the President indicates that
she has had informal contacts with Carl Icahn, Bill Ackman, Paul Singer and �others who are interested
in Ford�s future and in enhancing shareholder returns from their investments in Ford.�
Investment Management Essay Question
To address this problem, it is important to check on the cause of the problem and the alternatives
for solving it. It is clear that the environmental pollution is emanating from the use of diesel and
gasoline fuels, and that the Government Pension Fund Global is not happy with the continued
use of these pollutants. Communication is an important aspect in management. I will inform the
President of the Fund that I support her call for cessation of manufacturing of all cars and trucks
that are powered by gasoline.
Corporate social responsibility requires a company to meet its obligations and to make decisions
that are committed to the improvement of community welfare through corporate contributions
and discretionary business practices. This includes environmental management, pollution
management, waste management, biodiversity conservation, and pollution prevention and
control. Since environmental pollution is seriously spoiling the company’s image in line with our
corporate social responsibility, we need to adopt an environmental friendly approach to avoid the
risk of losing the Fund and ultimate collapse. Accordingly, Ford is adopting a ‘Smart Movers’
approach whereby we will exploit all available opportunities established by the green consumers
(Welford, nd). The company has realized that it is not prudent for a business to merely restrain
itself to its financial impact. We realize the great impact that our company has been having on
the environment as well as the community in which we operate. Indeed, the emissions from
exhaust pipes, including carbon monoxide and carbon dioxide lead to air pollution and creation
of smog. These gases also lead to climate change due to global warming. Thus, we consider it
our responsibility to deal with all risks, stakeholder and market pressures, and conditions
emerging in the course of our business. Our vision is to manufacture cars and trucks that do not
emit fumes, which are harmful to the public and the environment.
Ford is going to adopt various ways to ensure that alternative fuels such as bio-diesel, electricity,
LPG, and natural gas (Srisurapanon & Wanichapun, 2010) are adopted in two years’ time. Ford
is ready to partner with such stakeholders as Carl Icahn, Bill Ackman and Paul Singer to ensure
that there is a proper balance between the interests of the company and its corporate social
responsibility. We gladly invite Paul Singer, Bill Ackman and Carl Icahn to come in to
contribute to our shift to more efficient and reliable sources of energy for our cars and trucks. We
also greatly need the Fund to contribute to our new move, owing to the fact that the adoption of
alternatives to fossil fuels tends to have heavy financial requirements in the short-term period.
Despite the overwhelming expenses involved in the initial stages of adopting alternative sources
to fossil fuels, we realize that it is very beneficial for us to go beyond regulatory standards due to
the fact that this move will save on money and time, in addition to reducing hassles. It is evident
that environmental friendly energy sources have the ability of paying dividends with regard to
INVESTMENT MANAGEMENT ESSAY QUESTION 3
effectiveness and efficiency. As a result, Ford will have an opportunity to outshine its
competitors and even attract more investors. We need the Fund’s good will to help us in
achieving these goals. Thus, I would communicate all this to the President and ask her to be
patient with us a little longer to get financial backups in order to shift to environmental friendly
sources of energy.
References
Srisurapanon, V. & Wanichapun, C. (2010). Environmental Policies in Thailand and their
Effects.
