Norway's Wealth Fund Weighs Re-Engaging Defense Giants Amid U.S. Pressure
Norway's sovereign wealth fund may resume investments in major Western defense firms like Lockheed Martin and Boeing following independent committee recommendations, easing ethical rules amid U.S. pressure over prior divestments.
Norway's Government Pension Fund Global, the world's largest sovereign wealth fund, may alter its investment policy to re-engage with major Western defense contractors previously blacklisted over nuclear weapons manufacturing. According to CNBC, this follows recommendations issued Thursday by an independent committee reviewing the fund's ethical guidelines amid friction with the U.S. administration over divestments from Israeli and American firms.
Potential Policy Shift and Geopolitical Pressures
The fund, established in the 1990s to invest Norway's oil and gas revenues, manages approximately $2.3 trillion in assets and holds about 1.5% of all listed global equities. Its ethical rules currently prohibit investments in companies involved in nuclear weapons production, including Lockheed Martin, Boeing, Airbus, and BAE Systems. However, it holds shares in other defense firms such as Germany's Rheinmetall and Italy's Leonardo.
The committee, led by former central bank governor Svein Gjedrem, recommends narrowing the ban to permit investments in nuclear weapon producers from allied nations that are recognized nuclear-armed states under the Non-Proliferation Treaty. It also proposes scrapping the requirement to evaluate whether client nations comply with international humanitarian law.
Backlash Over Divestments and Future Timeline
The review began in November 2025 following intense fallout from the fund's exits from Israeli and U.S. companies. In August 2024, the fund divested from four Israeli banks—Bank Hapoalim, Bank Leumi, Mizrahi Tefahot, and First International Bank—worth approximately 2 billion shekels, citing their financing of West Bank settlements. It also sold its stake in Caterpillar over the use of its bulldozers in Palestinian territory.
These moves provoked outrage from the administration of Donald Trump, which accused the fund of relying on unjustified claims. The committee warned in its report that ethically driven investment decisions risk being perceived as Norwegian state policy and could trigger retaliatory measures.
The liberal international order is in retreat, the report stated.
The committee also recommended curtailing the Council on Ethics' powers to analyze violations without recommending exclusions. Human rights organizations slammed the proposals, with Amnesty International warning of weakened protections and the Norwegian Red Cross calling nuclear weapons investments ethically incomprehensible. The recommendations are non-binding; the Norwegian government will hold public consultations, and parliament is expected to vote on the changes in mid-2027.
