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

A government-appointed committee has recommended that Norway’s sovereign wealth fund, the world’s largest with assets of nearly $2.3 trillion, lift its ban on investing in companies that produce nuclear weapons. The report, released on Thursday, also called for the fund to stay out of “diplomatic” issues, a move that follows controversy over its divestment from Caterpillar last year.

Recommendations follow Gaza investment dispute

The review was partly prompted by the fund’s decision to sell its stake in the US construction giant Caterpillar, citing the company’s purported involvement in rights violations by Israel amid the war on Gaza and the occupied West Bank. Washington has since pressured Oslo over that move. The committee, led by former Central Bank Governor Svein Gjedrem, argued that decisions regarding “another state’s conduct” should be reserved for Norwegian diplomatic channels, not the fund. Still, the recommendations were unanimous and submitted to the Ministry of Finance.

Nuclear weapons investment and ethical oversight

The report also proposed allowing investments in nuclear weapons producers based in the US, UK, and France. It cited Norway’s reliance on NATO’s nuclear deterrent and a worsening security environment. “The global security situation has changed,” the report said, adding that Norway is building up its defence and the protection provided by NATO’s nuclear umbrella has become increasingly important. The companies that would be reincluded, it argued, produce weapons that Norway needs for its own defence. But the proposals have sparked backlash in Norway, with opposition politicians slamming the potential changes. Analysts warn that weakening ethics rules could have wide impact. Lawrence Loh, director of the Centre for Governance and Sustainability at the National University of Singapore Business School, told Al Jazeera that if the Norwegian fund changes its posture, “it will open Pandora’s box for many global investors to follow suit.”

Broader overhaul and reactions

The committee also recommended reshaping the role of the fund’s independent ethics watchdog and allowing some assessments of potential investments to remain confidential. The proposals come amid a shake-up of NATO by US President Donald Trump, with European countries increasingly looking to France’s nuclear deterrent. Trump said on Thursday that Washington is holding talks with Russia and China aimed at denuclearising countries with the biggest nuclear stockpiles. Gareth Evans, a former Australian foreign minister, called the report “an encouraging initiative in a world that has become alarmingly complacent about the risks of nuclear war.” He noted that every major nuclear arms control agreement is dead, dying, or on life support, and the longstanding taboo against threat or use is eroding. Loh cautioned that shifting the fund’s conditions could encourage others to invest in nuclear companies in scenarios different from Norway’s, where the companies are based in allied, nuclear-armed NATO countries.