Norway may revise the ethical guidelines governing its $2.3 trillion sovereign wealth fund to permit investments in certain defence companies that were previously excluded due to their involvement in nuclear weapons production. This recommendation comes from a government-appointed commission tasked with reviewing the fund’s investment criteria in light of evolving global security dynamics and Norway’s strategic reliance on NATO.
Currently, the fund’s rules bar investments in major defence contractors such as Airbus, Boeing, BAE Systems, and Lockheed Martin because of their roles in manufacturing nuclear arms. However, the proposed changes would allow exceptions for companies domiciled in countries recognized as nuclear-weapon states under the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) that are also Norway’s NATO allies. This would potentially reopen the fund to additional firms including Safran, Thales, BWX Technologies, Northrop Grumman, General Dynamics, L3Harris Technologies, and Larsen & Toubro (L&T).
Finance Minister Jens Stoltenberg, who formerly served as NATO’s secretary-general, initiated the review of the fund’s ethical framework. He cited the increasingly interconnected nature of global supply chains, making it challenging to clearly separate civilian and military production. Stoltenberg also emphasized the significance of protecting the fund, which supports approximately 25% of Norway’s public expenditures.
More than half of the fund’s assets are invested in U.S. companies, and a growing concentration in a small number of technology giants — including Nvidia, Apple, and Amazon — accounts for over 20% of the portfolio’s value. The fund’s substantial $1.2 billion holding in SpaceX and the recent surge in semiconductor stock valuations contributed to its strongest quarterly performance in six years as of August. Stoltenberg noted that this concentration increases the potential impact of individual investment decisions.
The sovereign wealth fund, managed by Norges Bank, traditionally follows the commission’s recommendations when setting its investment policies. While the potential easing of restrictions could lead to billions of dollars flowing into defence firms, exclusions could remain in place on other ethical grounds.
The commission’s proposals will inform a forthcoming government white paper expected next spring, which will outline the future direction of Norway’s sovereign wealth fund and its ethical investment guidelines.