Norway wealth fund may soon be allowed to invest in defense giants

Norway’s $2.3 trillion oil fund could soon invest in Western defense companies after years of being frozen out of much of the sector by state ethics guidelines.

The sovereign wealth fund is currently worth around 21.8 trillion Norwegian kroner, or $2.3 trillion, making it the largest fund of its kind in the world. With stakes in around 1.5% of the world’s publicly listed companies, the fund is one of the biggest investors in the stock market worldwide.

In November 2025, a review was ordered into the ethical guidelines governing how Norges Bank invests, following controversy over divestments from some Israeli and American firms.

On Thursday, the independent Gjedrem Committee submitted the review’s findings to the Norwegian Ministry of Finance. It included a recommendation for radical change to the fund’s approach to defense investments, arguing that “Norges Bank must be prepared for situations where conflicts escalate into war.”

Current ethical rules prohibit the fund from making investments in companies including Airbus, BAE Systems, Boeing, BWX Technologies and Lockheed Martin, as they contribute to the manufacturing of nuclear weapons. 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.

The Gjedrem Committee said Thursday that although the nuclear weapons criterion should be retained, “its scope should change.”

“The Fund is not to be invested in companies that produce nuclear weapons, unless the company is domiciled in a nuclear-weapon state under the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) that is allied with Norway,” it said in its report. “Several European and American companies that produce components for nuclear weapons can therefore be reincluded.”

It added that potential investment should include companies producing weapons that Norway needs for its own defense, and proposed removing the requirement for arms-makers to be assessed for whether their products are being used by nations in accordance with international humanitarian law.

The committee noted that alongside rising geopolitical instability, wars in the Middle East and Ukraine, and energy security concerns, the fund’s capital and influence meant it was “timely to reassess the ethical framework.”

“The Fund’s size and reach give better access to company management and boards than the Fund had in 2003,” it said. “In a time of a more demanding political situation abroad, this provides opportunities of which the management should make use.”

“The liberal, rules-based international order is in decline,” it added. “Economic policies are increasingly used as instruments of foreign policy. Cooperation between countries has become more transactional and negotiation-driven in recent years.”

It warned that in this environment, other governments can “more readily…