Norway's parliament has voted to suspend the "ethical divestment" operations of its $2.1 trillion sovereign wealth fund during a review of related rules. This marks a historic moment for the world's largest investor and raises fundamental questions about its environmental, social, and governance (ESG) strategy.
The Norwegian Labour Party government secured approval for this move with support from conservative opposition votes. The decision will allow the fund to maintain holdings in Microsoft, Amazon, and other tech giants—companies that might have faced divestment under current guidelines due to their alleged links to Israel's Gaza war.
This represents the first time Norway has suspended its ethical council's operations in the fund's history. With these guidelines temporarily shelved, Norway enters a new era for this global investor, which holds stakes in over 8,500 companies and whose moves are closely tracked by fund managers worldwide.
Cecilie Hellestveit, one of the five members of the ethics council, stated that the advisory body's future role remains unresolved. "If we suspend normal operations, there will undoubtedly be consequences," she told Bloomberg. "But the severity and specifics remain unclear at this stage."
Recent ethics council-driven decisions have drawn U.S. criticism. In August, the fund excluded Caterpillar Inc. from its portfolio, citing the company's supply of bulldozers to Israel that were subsequently used in Palestinian territories.
Prominent U.S. Republican figures swiftly responded by calling for retaliatory measures, including visa restrictions against fund executives. They also advocated for punitive tariffs on Norway, building upon the 15% tariffs already imposed during the Trump administration.
Norwegian Socialist Left Party MP Ingrid Fiskaa asserted that lawmakers supporting the ethics council suspension were "undoubtedly" motivated by "fears of Trump's reaction."
Norges Bank Investment Management, which oversees the fund, operates under parliamentary mandates that include ethical guidelines covering issues from landmines to climate change. The ethics council continuously evaluates the portfolio, recommending exclusions or placing companies under observation.
Tuesday's parliamentary vote to suspend the council coincided with agreement to review the fund's mandate after heated debates about the role of this growing investment vehicle. The ruling Labour Party joined with right-wing opposition to pass the suspension by majority vote, despite opposition from most traditional left-wing allies.
Norwegian Finance Minister Jens Stoltenberg (former NATO Secretary General) had previously called for reviewing the fund's guidelines. On Tuesday evening, he told public broadcaster NRK that despite the suspension, "ethical considerations will still apply" to investment decisions.
The move follows a July report by UN Human Rights Council special rapporteur Francesca Albanese, which criticized U.S. firms including Alphabet, Amazon, Microsoft, and Palantir Technologies for alleged involvement in Israel's economy. The report accused Israel of apartheid, war crimes, and genocide in its treatment of Palestinian territories and response to the October 7 Hamas attacks—prompting U.S. sanctions against Albanese.