According to Financial Times News, Norway has suspended its ethical investing rules to avoid its massive $2.1tn oil fund being forced to sell stakes in Amazon, Microsoft, and Alphabet. Finance Minister Jens Stoltenberg revealed the US expressed concerns after the fund recently divested from Caterpillar over its bulldozers being used in Palestinian territories. The center-left government rushed an emergency proposal through parliament on Tuesday, effectively putting the independent ethics council’s work on hold. Stoltenberg specifically mentioned the council was planning to examine tech companies including Amazon, Microsoft, and Google owner Alphabet, plus firms on a UN blacklist from July. The UN report by special rapporteur Francesca Albanese states these tech giants provide Israel with “government-wide access to their cloud and artificial intelligence technologies” for surveillance and analysis.
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When ethics meet practical politics
Here’s the thing about being the world’s largest sovereign wealth fund – you can’t just dump 15% of your equity holdings because of ethical concerns. Stoltenberg basically admitted what everyone was thinking: the existing framework could force them to sell out of “some of the largest companies in the world.” And that would completely undermine the fund’s purpose as a broad, diversified global investor.
But let’s be real – this isn’t just about diversification. The fund contributes about a quarter of Norway’s annual budget. We’re talking about the country’s welfare state here. When your entire national budget depends on investment returns, you can’t afford to make purely ethical decisions that might tank your performance. It’s the classic conflict between principles and pragmatism.
The political backlash is real
Now, this move didn’t come without serious political drama. The government needed opposition support to push this through, and left-wing politicians are absolutely furious. Arild Hermstad from the Greens put it bluntly: “It means that if you are a big enough company, you can do whatever you want.” Ouch.
Even more striking was Kirsti Bergstø from the Socialist Left party accusing the government of catering to “Trump’s fear-mongering” and “tech oligarchs” rather than its own population. She didn’t hold back on the genocide reference either. This is the kind of language that shows how deeply divisive this issue has become in Norwegian politics.
This is part of a bigger shift
What’s really interesting is Stoltenberg – a former NATO head, remember – also signaled they’re reconsidering the fund’s stance on defense companies. Boeing, Airbus, BAE Systems, Lockheed Martin? All currently off-limits because they make nuclear weapons parts. But Norway just signed a £10bn deal with BAE for warships while enjoying NATO’s nuclear umbrella protection.
Stoltenberg called this “at least a paradox,” and he’s not wrong. The UN report that triggered this whole situation lays out exactly why these tech companies are problematic from an ethical standpoint. But when your investment decisions start conflicting with both your national security interests and your budget needs, something’s gotta give.
So what happens now?
The ethics council itself welcomed the review, which tells you they recognize how politically charged this has become. But here’s the real question: can you have meaningful ethical guidelines if you’re willing to suspend them whenever they become inconvenient?
This feels like a watershed moment for ethical investing more broadly. When the world’s largest sovereign wealth fund decides some companies are simply too big to divest from, what does that say about the entire concept? The fund is stuck between being a responsible global citizen and, well, actually making money to fund a country. There are no easy answers here, but one thing’s clear – the rules of ethical investing just got a lot more complicated.
