Norway is expected to overhaul the ethical rules governing its $2.3 trillion wealth fund after a state-appointed commission publishes its findings on Thursday. The move follows a year in which the fund paused divestments amid scrutiny from the United States.
The Trump administration had objected to the fund selling its Caterpillar shares, citing the use of the US company’s bulldozers in Gaza and the occupied West Bank. Weeks later, Norway’s parliament backed a pause on ethics-based divestments by the world’s largest state-owned fund while a review was carried out. Its findings are due at 0700 GMT on Thursday.
The government rejected suggestions that the pause was driven by fear of upsetting Washington, where more than half of the fund’s assets are invested.
How the ethics watchdog’s role has changed
Before the suspension, the Council on Ethics, the fund’s independent watchdog, sent divestment recommendations to the board of the central bank, which made the final decision. That board usually followed the council’s advice.
Since the suspension, recommendations have gone instead to Norges Bank Investment Management, the fund’s operator. No divestments have been made during that period.
Finance Minister Jens Stoltenberg said securing the fund, which finances a quarter of the country’s public spending, was “one of the most important things we do in Norway”. Speaking to Reuters on Wednesday, he said value chains are becoming more integrated, making it hard to separate civil and military products.
He also highlighted how concentrated the fund’s holdings are, with mostly US tech firms such as Nvidia, Apple and Amazon. Ten companies account for more than 20% of the value of its share portfolio. “This type of concentration … means that individual decisions can have much greater consequences than in the past,” Stoltenberg said, adding that his priority was for the fund to remain broadly invested.
Possible lifting of the nuclear weapons ban
One possible change concerns the fund’s ban on investing in companies that make nuclear weapons or key components. That ban effectively rules out the world’s largest defence companies. Stoltenberg asked the commission to examine whether nuclear weapons as a deterrent should be taken into account.
If the commission recommends lifting the ban, the fund could invest in the largest defence firms. The current exclusion list names the following companies:
- Lockheed Martin
- Boeing
- Airbus
- BAE Systems
- Safran
- Thales
- BWX Technologies
- Northrop Grumman
- Fluor
- General Dynamics
- Huntington Ingalls Industries
- Jacobs Solutions
- L3Harris Technologies
- L&T
Civil society groups, including the Norwegian Red Cross, say such a change would legitimise investing in weapons of mass destruction. In its submission to the commission, the Red Cross said, “The way Norway invests significant sums contributes to setting standards globally.”
The commission’s proposals will form the basis for the government’s own proposals, which are expected in spring 2027 as part of an annual white paper on the sovereign wealth fund.
Concerns over making recommendations public
Stoltenberg had earlier told Reuters that the fund’s openness about why it divests created dilemmas. Once the fund sold out of a company, the council published its full recommendation, including its reasoning, which was based on months or years of investigation. That gave the public and other investors a unique source of information.
The prospect that these recommendations might no longer be published has worried civil society groups. They argue that the disclosures are a key source of information for the general public and investors. Some activists are also concerned that the Council on Ethics could be removed altogether.
