The key facts

  • The commission proposed an exception to the ethical rules for nuclear weapons manufacturers from nuclear states that are Norway's NATO allies.
  • The fund currently excludes 14 companies, including Airbus, BAE Systems, Boeing, Lockheed Martin and Safran.
  • Consultations on the report run until January 15, the government's assessment to parliament is due in spring; left-wing parties have already criticized the proposal.

The commission's proposal

On Thursday, a Norwegian government commission presented a review of the ethical rules of the €2 trillion sovereign wealth fund and proposed allowing investments in major Western defense conglomerates that are currently excluded from the portfolio due to their involvement in nuclear weapons production. The commission was led by former central bank chief Svein Gjedrem; the government ordered a review of the rules last November.

The essence of the proposed exception

Under the proposal, the fund would be able to invest in nuclear weapons manufacturers based in a state that officially possesses such weapons and is recognized under the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), and which is simultaneously Norway's NATO ally. "This means that several British, French and American arms manufacturers will return to the fund," Gjedrem said, presenting the 434-page report. The fund currently excludes 14 companies that develop or produce nuclear weapons or their components, including Airbus, BAE Systems, Boeing, Lockheed Martin and Safran. Other exclusion criteria — biological and chemical weapons, anti-personnel mines, cluster munitions, as well as restrictions on coal, tobacco and cannabis — will be retained.

The government's reaction

The report was handed to Finance Minister Jens Stoltenberg, who previously served as NATO Secretary General. He pointed to a "paradox": "The Norwegian fund cannot invest in companies that could be critical to Norway's security" — against the backdrop of Russia increasingly threatening to use nuclear weapons and China building up its own arsenal.

Changes to the Ethics Council

The commission also proposed changing the work of the Ethics Council — an independent body that gives recommendations to the central bank, which manages the fund. The Council will retain its function of assessing the risk of serious violations of ethical standards, but will no longer be able to directly recommend the exclusion of companies from the portfolio; this authority has already been suspended during the review of the rules.

Next steps and criticism

The recommendations will be put out for public consultation until January 15, after which the government will present its assessment to parliament next spring. A number of parties, especially on the left, have already criticized the report: one representative of the Green Party called it "completely meaningless." The fund invests in more than 7,000 companies worldwide and owns approximately 1.5% of all shares traded on stock exchanges.