Norway’s $2.3 Trillion Wealth Fund Could Reopen Door to Western Defence Stocks

Norway’s $2.3 trillion sovereign wealth fund could resume investments in several major Western defence companies under proposed changes to its ethical guidelines, as rising geopolitical tensions prompt a reassessment of restrictions on the world’s largest sovereign wealth fund.

An independent committee reviewing the fund’s ethics framework recommended retaining restrictions on companies producing nuclear weapons but allowing investments in some manufacturers based in allied nuclear-armed states, potentially opening the door to companies including Boeing, Lockheed Martin and BAE Systems.

“Norges Bank must be prepared for situations where conflicts escalate into war,” the Gjedrem Committee said in a report submitted to Norway’s finance ministry on Thursday.

The fund, worth about 21.8 trillion Norwegian kroner, invests revenues from Norway’s oil and gas industry and holds stakes in around 1.5% of the world’s listed companies. Its investment decisions are managed by Norges Bank Investment Management (NBIM).

Under the proposed changes, companies producing nuclear weapons would remain excluded unless they were based in a nuclear-weapon state under the Treaty on the Non-Proliferation of Nuclear Weapons that is allied with Norway.

“The Fund is not to be invested in companies that produce nuclear weapons, unless the company is domiciled in a nuclear-weapon state under the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) that is allied with Norway,” the committee said in its report. “Several European and American companies that produce components for nuclear weapons can therefore be reincluded.”

The committee also proposed allowing investments in companies manufacturing weapons needed for Norway’s defence and removing a requirement to assess whether weapons produced by companies are used in accordance with international humanitarian law.

The recommendations reflect concerns about worsening geopolitical instability, Russia’s war in Ukraine, conflict in the Middle East and growing pressure on countries to strengthen their defence capabilities.

“The liberal, rules-based international order is in decline,” the committee said. “Economic policies are increasingly used as instruments of foreign policy. Cooperation between countries has become more transactional and negotiation-driven in recent years.”

The committee noted that the fund’s size and influence gave it greater access to company executives and boards than when its ethical framework was established in 2003, creating opportunities to influence corporate behaviour through engagement rather than exclusion.

“The Fund’s size and reach give better access to company management and boards than the Fund had in 2003,” it said. “In a time of a more demanding political situation abroad, this provides opportunities of which the management should make use.”

The review follows controversy over the fund’s decisions to divest from several companies, including U.S. machinery maker Caterpillar and Israeli banks, over concerns about their activities in Palestinian territories.

In September 2025, the U.S. State Department said it was “very troubled” by the decisions, accusing the fund of relying on “illegitimate claims.” Norway’s finance minister, Jens Stoltenberg, said the divestments were “not a political decision.”

The committee warned that ethically motivated exclusions could increasingly be interpreted as foreign policy decisions by the Norwegian government, potentially exposing the fund and other Norwegian interests to retaliation.

“There have been reactions and threats of countermeasures,” it said. “Retaliatory measures could hit the Fund and other Norwegian interests.”

The proposals have drawn criticism from human rights organisations. John Peder Egenæs, secretary general of Amnesty International Norway, said they “risk weakening accountability and integrity and dismantling key human rights protections.”

“When the world’s largest sovereign wealth fund changes its standards, the consequences do not stop at Norway’s borders,” he said. “Other investors pay attention, and companies do too.”

Grete Herlofson, secretary general of the Norwegian Red Cross, said investing in nuclear weapons producers would be “ethically and humanitarianly completely incomprehensible.”

“Opening up investment in nuclear weapons would be a dangerous change of course that weakens the international stigma against these weapons and reinforces the perception that they are an acceptable weapon,” she said. “This increases the risk that they could be used.”

The committee also recommended retaining the Council on Ethics but limiting its role to analysing potential breaches of the guidelines, rather than advising NBIM to exclude companies or place them under observation.

No immediate changes to the fund’s portfolio will result from the report. Norway will hold a public consultation, with the central bank expected to submit its response in January. The finance ministry plans to present a new ethics framework to parliament in a white paper in the spring, with lawmakers expected to vote in mid-2027.

Until then, the existing restrictions remain in force.

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