Norway's $2.3 trillion sovereign wealth fund, the largest of its kind globally with stakes in approximately 1.5% of the world's publicly listed companies, may soon be permitted to invest in major Western defense companies following proposed changes to its ethics rules [1]. Currently, the fund is barred from investing in companies such as Lockheed Martin, Boeing, Airbus, BAE Systems, and BWX Technologies due to their involvement in nuclear weapons production [1]. However, the Gjedrem Committee, which submitted its review findings to the Norwegian Ministry of Finance, has recommended a significant shift in the fund's approach to defense investments, citing the need for preparedness in escalating conflict situations [1].
The committee's proposal suggests retaining the prohibition on investing in nuclear weapons producers, but with a narrower scope: companies domiciled in nuclear-weapon states under the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) that are allied with Norway could be reincluded for investment [1]. This change would potentially allow the fund to invest in several European and American defense companies that produce components for nuclear weapons [1]. Additionally, the committee recommended that the fund should consider investing in companies producing weapons necessary for Norway's own defense and proposed removing the requirement to assess whether arms-makers' products are used in accordance with international humanitarian law [1].
The review of the ethical guidelines was initiated in November 2025 after controversy over divestments from certain Israeli and American firms [1]. The Norwegian government will consult on the proposals before presenting a new ethics framework, with a parliamentary vote expected in mid-2027 [1]. The committee emphasized that the fund's significant capital and influence, combined with rising geopolitical instability and ongoing conflicts in the Middle East and Ukraine, make it timely to reassess the ethical framework [1].
Currently, the fund does hold some defense stocks, including a 2.3% stake in Germany's Rheinmetall and a 1.5% stake in Italy's Leonardo [1]. The proposed changes could expand its investment universe to include other major defense contractors previously excluded under the existing rules [1].
CONCLUSION
Norway's sovereign wealth fund is considering a major shift in its investment policy that could allow it to invest in leading Western defense companies, pending a parliamentary vote in mid-2027. This potential change reflects both the fund's global influence and the evolving geopolitical landscape, signaling a possible increase in capital flows to the defense sector.