Norway wealth fund urged to ease nuclear arms ban after Gaza investment row

A government-appointed committee in Norway has recommended loosening the ethical limits that govern the country's sovereign wealth fund, including allowing investment in companies involved in producing nuclear weapons. The proposal was set out in a report submitted to the Ministry of Finance on Thursday and comes amid a wider review of how the fund handles ethical risk. The committee also said decisions about another state's conduct should be left to ordinary diplomatic channels rather than the fund itself.

The review was led by former central bank governor Svein Gjedrem and was described as unanimous. It said the world's largest sovereign wealth fund, which manages assets of nearly $2.3 trillion, should be given greater discretion by its manager, the central bank, when dealing with ethical questions. The committee also recommended a review of the fund's exclusion of companies involved in nuclear weapons production, including firms based in the United States, the United Kingdom and France.

The report was prompted in part by controversy over the fund's divestment last year from Caterpillar, the US construction company. The fund said that move was linked to Caterpillar's alleged involvement in rights violations by Israel in Gaza and the occupied West Bank. The decision drew pressure from Washington, and the committee said the Gaza dispute was one reason it had been appointed.

The report also suggested that some assessments of potential investments should be allowed to remain confidential. The recommendations matter because Norway's fund is one of the most closely watched state investors in the world, and its ethical rules have long been seen as part of its public identity. Any change to those rules could affect how the fund balances financial returns against political and human rights concerns.

The proposal also touches on Norway's security policy, with the committee citing the country's reliance on NATO's nuclear deterrent and a worsening security environment. The review reflects a broader debate over whether the fund should continue to act as a moral investor or take a narrower financial approach. Its current exclusions have included companies linked to weapons and to conduct judged incompatible with the fund's ethical guidelines.

By recommending more discretion for the central bank and less direct involvement in diplomatic questions, the committee is effectively proposing a shift in how Norway separates investment policy from foreign policy. The report has already triggered criticism in Norway, although the details of that backlash were not fully set out in the supplied material. It is not yet clear how the government will respond or whether the recommendations will be adopted in full, in part, or not at all.

What happens next will depend on the finance ministry's review and any political debate that follows over the fund's role, its ethics rules and its exposure to nuclear arms producers.

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