Jobs are vital to reducing poverty. They generate income and a range of other benefits, and help people to improve their knowledge and skills. The International Labour Organization has noted that 190 million jobs are needed to address current levels of unemployment, and that a further 340 million jobs will need to be created by 2030.
Link to SDGs
Norfund’s investments contribute both directly and indirectly to the achievement of the UN Sustainable Development Goal, Target 8.5:
"By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value".
Norfund promotes job quality using the IFC Performance Standards (PS) on Environmental and Social Sustainability in our investment processes. The IFC PS is the key tool used by development finance institutions, such as Norfund, to assess the environmental and social risks of investments. One of the PS focuses on Labor and Working conditions and include provisions for issues such as workers’ rights, health and safety, and anti-discrimination and equal opportunity. The standards are aligned with the ILO’s core conventions.
Jobs are created directly in Norfund’s portfolio companies and indirectly through their supply chains. By the end of 2018, a total of 304,000 people were employed in the companies in which we have invested, either directly or through funds. Approximately 35 per cent of those employed were women.
- 17,100 new jobs created in 2018: Between the end of 2017 and the end of 2018, the total number of permanent jobs in Norfund’s portfolio companies* increased by 17,100, or nine percent.
- Job creation in the supply chain: Norfund’s portfolio companies also contribute indirectly to job creation when they buy goods and services from other enterprises. In 2018, our investee companies purchased goods and services worth NOK 18.6 billion from local suppliers. In 2018, the companies* increased their collective purchases by NOK 1.3 billion, or by nine percent, in 2018.
- Estimating job creation in the supply chain: Literature on job creation suggests that direct employment is a fraction of the indirect employment effect in supply chains. Several DFIs have developed methods for estimating the number of such jobs, and Norfund is currently reviewing these approaches. CDC, for example, has developed a model which shows that around 3.5 employment opportunities are created in the supply chain for every directly-employed worker. Applying this ratio to Norfund’s investments suggests that an additional 66,900 new jobs were created in 2018.
*In companies with two consecutive years of reporting