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Norway should drop a ban that is preventing its sovereign wealth fund, the world’s biggest, from investing in defence companies such as Boeing, Airbus, Lockheed Martin and Honeywell, the two main opposition parties have said.
Norway’s $1.8tn oil fund has been barred from holding stakes in most defence companies since the early 2000s when the country’s parliament imposed ethical rules that banned it from owning groups that make parts for nuclear or cluster weapons.
Speaking to the Financial Times ahead of parliamentary elections later this year, the centre-right Conservative and Progress parties said they wanted to reverse that position due to the current security situation and Norway benefiting from the US-led Nato nuclear umbrella.
Erna Solberg, a former prime minister and current leader of the Conservatives, said it was “ironic” that Norway had rules that excluded companies that make nuclear weapons.
“We have restrictions today that the oil fund cannot invest in the defence industry. We’re going to take them away. It’s completely crazy,” she said.
Progress MP Hans Andreas Limi has tabled a private members’ bill to remove the nuclear weapons ban, which currently forces the fund to exclude companies including Northrop Grumman, BAE Systems, General Dynamics and Safran. Limi’s has not been previously reported on.
“It’s hypocritical. We are a Nato member, we are very dependent on the security that the US can give us. We buy equipment from the same companies but we can’t invest in them,” he said in an interview.
The parties’ stance comes as investors worldwide are reassessing their previous reluctance to own defence companies after Russia’s full-scale invasion of Ukraine in 2022 forced Europe in particular to dramatically increase its military spending.
The actions of the Norwegian oil fund — which on average owns 1.5 per cent of every listed global stock and 2.5 per cent of each one in Europe — are particularly significant and could be widely followed by other shareholders. “It will give a signal effect to other investors,” said Limi.
The fund is subject to certain product exclusions from Norway’s parliament including tobacco, coal and parts for nuclear and cluster weapons. The last exclusion has stopped it from owning major defence companies such as Boeing, Airbus and Lockheed Martin since 2005-06.
There is growing pressure on Norway’s government and its new finance minister Jens Stoltenberg, the former head of Nato, to change that.
Ida Wolden Bache, governor of Norway’s central bank, which houses the oil fund, previously said the country “must be open to the possibility that what is considered to be ethically acceptable may change”.
A senior Norwegian official said: “You could see it as hypocritical to rely on Nato’s nuclear umbrella and US F-35 jets and not be able to invest in the companies that make them.”
Norway’s finance ministry declined to comment, saying it had received a similar question from parliament and would answer it first.
The Conservatives and Progress parties had long been forecast to win September’s parliamentary elections and form the next government. But that has been thrown into doubt by the popularity of the return of Stoltenberg — a former Norwegian prime minister — to local politics. The right and left blocs are now level-pegging.
Limi said defence investments would be “very profitable” for the fund.
