Norway's $2.3 trillion wealth fund may lift ban on Western defense investments
An independent committee has recommended loosening the ethics rules that bar Norway's sovereign wealth fund from companies such as Boeing, Airbus and Lockheed Martin.
At a glance
- Norway's $2.3 trillion sovereign wealth fund could soon invest in Western defense companies under a committee's proposed ethics changes.
- The Gjedrem Committee says nuclear weapons producers in NPT states allied with Norway could be reincluded in the fund.
- Parliament is expected to vote on the new framework in mid-2027; current rules stay in place until then.
Norway's $2.3 trillion sovereign wealth fund could be free to invest in Western defense companies after an independent committee recommended loosening the ethical rules that have excluded much of the sector, in a report handed to the Norwegian Ministry of Finance on Thursday.
The fund, managed by Norges Bank Investment Management (NBIM), is worth about 21.8 trillion Norwegian kroner and holds stakes in roughly 1.5% of the world's publicly listed companies, making it the largest fund of its kind.
Current ethics rules bar investment in companies including Airbus, BAE Systems, Boeing, BWX Technologies and Lockheed Martin because they contribute to the manufacture of nuclear weapons. The fund does hold some defense stocks, such as a 2.3% stake in Germany's Rheinmetall and 1.5% in Italy's Leonardo.
What the committee recommends
The Gjedrem Committee said the nuclear weapons criterion should be retained but its scope changed. Under its proposal, the fund could invest in nuclear weapons producers if the company is domiciled in a nuclear-weapon state under the Treaty on the Non-Proliferation of Nuclear Weapons that is allied with Norway. "Several European and American companies that produce components for nuclear weapons can therefore be reincluded," the report said.
The committee also said investment should cover companies producing weapons Norway needs for its own defense, and proposed removing the requirement for arms-makers to be assessed on whether their products are used by nations in accordance with international humanitarian law.
It argued the fund's size and reach gave it better access to company management and boards than in 2003, and that a more demanding political situation abroad offered opportunities management should use. It warned that the "liberal, rules-based international order is in decline" and that other governments could more readily see ethically motivated exclusions as Norwegian government policy, raising the risk of retaliatory measures.
Backlash and next steps
Human rights groups criticized the proposals. Amnesty International Norway secretary general John Peder Egenæs said they "risk weakening accountability and integrity and dismantling key human rights protections," adding that other investors and companies pay attention when the world's largest sovereign wealth fund changes its standards. Norwegian Red Cross secretary general Grete Herlofson called investing in producers of nuclear weapons "ethically and humanitarianly completely incomprehensible."
No companies will immediately be included in or excluded from the portfolio. Norway will hold a public consultation, the central bank is due to submit its response in January, the finance ministry will propose a new ethics framework in a white paper in the spring, and parliament is expected to vote in mid-2027. Until then, existing guidelines remain unchanged.
The review was ordered in November 2025 after controversy over divestments from some Israeli and American firms. In September last year, the U.S. State Department told CNBC it was "very troubled" by NBIM's decision to exit positions in Caterpillar and five Israeli banks.
Svein Richard Brandtzæg, chair of the fund's Council on Ethics, said the council had just received the report and would study it carefully before responding in the upcoming consultation.
Source: CNBC Top News.
Questions and answers
- Why is Norway's wealth fund barred from some defense companies?
- Current ethics rules exclude firms including Airbus, BAE Systems, Boeing, BWX Technologies and Lockheed Martin because they contribute to the manufacture of nuclear weapons.
- What would change under the Gjedrem Committee's recommendations?
- The nuclear weapons criterion would be retained but narrowed, so companies domiciled in NPT nuclear-weapon states allied with Norway could be reincluded, and the fund could invest in weapons Norway needs for its own defense.
- When could the changes take effect?
- Norway will hold a public consultation, the central bank responds in January, a white paper is due in the spring and parliament is expected to vote in mid-2027.
