Finance Minister Jens Stoltenberg said the government was suspending ethics rules governing Norway's sovereign wealth fund after the fund's sale of a stake in Caterpillar Inc raised concerns it could sell off its $230 billion holdings in technology companies.
Norway’s sovereign wealth fund reaches US$2.1 trillion, ranking first in the world. In August, the fund's ethics adviser asked it to sell its stake in Caterpillar after the company's bulldozers were used in the Gaza war. Stoltenberg said in an interview in Oslo on Monday that the move could become a "template." Provisions would have required the fund to be told to sell its holdings in the most profitable companies.
Stoltenberg’s comments further shed light on the disruptive impact that the situation in Ukraine and Gaza, as well as the Trump administration’s attacks on climate and diversity policies, are having on the concept of ethical investing.
Jens Stoltenberg
“Taken together with the Caterpillar decision and the Ethics Committee’s announcement that it has begun an assessment of technology companies, we assess that current guidance could put Norway in a position to divest from some of the world’s largest companies,” said Stoltenberg, a former NATO secretary-general.
He pointed out that the new geopolitical situation, with multiple conflicts intersecting and requiring the fund to respond faster than current rules allow, required revised regulations. Norway has given a committee of experts a year to evaluate the regulations.
Stoltenberg suggested the decision to sell Caterpillar's stake was excessive, as he was selling off a "small part" of the company's business, while its heavy equipment is widely used on construction sites across Norway.
“Many people, at least in the Norwegian parliament and among the Norwegian public, are questioning whether this is an overreaction,” he said.
Stoltenberg said another reason why Norway's sovereign wealth fund needs to revise its ethical investment guidelines is the controversy surrounding arms investments.
Current ethics rules prohibit investment in companies that produce nuclear weapons or their components. But at the same time, the Norwegian government has increased defense spending, including purchasing frigates from BAE Systems Plc and F-35 fighter jets from Lockheed Martin, both of which are prohibited from investment by Norway's sovereign wealth fund.
"It's strange that we can pay a company a huge amount of money to buy an F-35 or a frigate and not get a small return on the investment," Stoltenberg said.