The committee has recommended easing ethical restrictions on Norway’s $2.3 trillion sovereign wealth fund, including its ban on investing in companies that produce nuclear weapons, following controversy over its withdrawal from US construction giant Caterpillar over the company’s involvement in Israeli abuses in Gaza and the occupied West Bank.
The recommendations, submitted to the Ministry of Finance on Thursday, propose giving the fund’s manager, Norway’s central bank, greater discretion in assessing ethical risks and limiting the fund’s involvement in matters involving other states.
The review, led by former Central Bank Governor Svein Gjedrem, was prompted partly by the fund’s decision last year to divest from Caterpillar over its role in rights violations linked to Israel’s genocidal war on Gaza and activities in the occupied West Bank, a move that subsequently drew pressure from Washington.
“Parts of the rationale for the appointment of the Committee was the Fund’s management related to the war in Gaza,” the committee said.
It argued that decisions concerning “another state’s conduct” should be handled through Norway’s diplomatic channels rather than by the fund itself.
Beyond the Gaza-related controversy, the committee unanimously recommended reconsidering the exclusion of companies involved in producing nuclear weapons, citing Norway’s reliance on NATO’s nuclear deterrent and a deteriorating international security environment.
The proposed changes would allow investments in nuclear weapons manufacturers based in the United States, the United Kingdom and France, while also revising the role of the fund’s independent ethics watchdog and permitting some assessments to remain confidential.
“The global security situation has changed. Norway is building up its defense capabilities, and the protection provided by NATO’s nuclear umbrella has become increasingly important. The companies that would be reincluded produce weapons that Norway needs for its own defense”, the report argued.
However, the proposals have drawn criticism from opposition politicians and raised concerns among analysts about their potential international consequences.
“If the Norwegian sovereign wealth fund – often considered a global gold standard – changes its posture towards nuclear weapons, it will open Pandora’s box for many global investors to follow suit,” Lawrence Loh, director of the Centre for Governance and Sustainability at the National University of Singapore Business School, told Al Jazeera.
Gareth Evans, a former Australian foreign minister, described the report as “an encouraging initiative in a world that has become alarmingly complacent about the risks of nuclear war, with every major nuclear arms control agreement dead, dying or on life support, and the longstanding taboo against threat or use eroding”.
The debate comes as European countries reconsider their nuclear security arrangements amid uncertainty over US President Donald Trump’s commitment to NATO, with some exploring greater reliance on France’s nuclear deterrent.
Trump said on Thursday that Washington was holding talks with Russia and China aimed at denuclearization.
Loh, however, warned that relaxing Norway’s restrictions could encourage investment in nuclear weapons companies beyond the proposed framework, which limits eligibility to firms based in allied, nuclear-armed NATO countries.