Norway's wealth fund panel proposes allowing investments in defence firms tied to nuclear arms

Proposal to reopen defence stocks

A government-appointed commission chaired by Svein Gjedrem, a former central bank governor, recommended on Thursday, 15 October, that Norway's sovereign wealth fund be allowed to invest again in large Western defence companies excluded over their role in nuclear weapons production. The fund, valued at $2.3 trillion, currently bars 14 companies, including Airbus, BAE Systems, Boeing, Lockheed Martin and Safran. The proposed exception would cover companies based in a state recognised as a nuclear power under the Non-Proliferation Treaty and allied to Norway in NATO. Gjedrem said the change would allow investment in several British, French and American arms companies to resume. The commission's 434-page report must still be adopted by the Norwegian parliament before any change takes effect.

Wider ethics overhaul

The proposal is part of a broad review of the ethics guidelines that the government ordered in November last year, after the fund's exclusion policy caused friction with the Trump administration. Parliament suspended several divestments planned for ethical reasons last year following complaints from Washington, and the Ethics Council's role was set aside during the review. The commission now recommends reinstating the ethical instruments suspended in November, with a high threshold for exclusion: the fund should avoid companies where there is an unacceptable risk that they contribute to gross violations of norms or are responsible for them. Engagement through ownership rights, such as talks with management and votes at shareholder meetings, should come first, with divestment only if that proves ineffective and does not impair the fund's broad diversification. The commission also wants the Ethics Council to assess risks without issuing recommendations and to abolish the option of placing companies under observation. The remaining exclusion criteria, covering biological and chemical weapons, anti-personnel mines, cluster munitions, coal, tobacco and cannabis, would stay unchanged.

Reactions and reasoning

Gjedrem's commission described it as paradoxical that the fund cannot invest in companies that could be essential to Norway's security at a time of rising geopolitical vulnerability. Finance minister Jens Stoltenberg, a former NATO secretary general who had asked the commission to revisit the guidelines, backed the conclusions. He argued that the value chain is increasingly integrated and that telling civilian products from military ones is difficult. Grete Herlofson, head of the Norwegian Red Cross, said in a written statement to Reuters that investing in such weapons sends a signal to the world that they are acceptable and puts lives at risk. Civil society organisations said the proposals dilute the fund's ethical rules and set a regressive precedent that other international investors could follow.

Market and political context

The fund reported a 2025 return of 15.1%, equivalent to 247 billion dollars, and more than half of its assets are invested in the United States. The proposal follows criticism from the Trump administration after the fund sold its stake in the US company Caterpillar. It comes as Russia increasingly threatens to use nuclear weapons and China expands its arsenal. The report has been submitted to the finance minister, and the government is expected to decide on the recommendations, which would then need parliamentary approval.