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Analysis-Norway's giant fund in election crosshairs over Israel investments
Published by Global Banking and Finance Review
Posted on August 22, 2025
6 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on August 22, 2025
6 min readLast updated: January 22, 2026
Norway's Sovereign Wealth Fund's Israeli investments are central to the election debate, affecting political dynamics and ethical guidelines.
By Gwladys Fouche
OSLO/ARENDAL, Norway (Reuters) -Investments in Israel have taken centre stage in Norway's election campaign, sparking an unusually public debate over how the world's largest sovereign wealth fund operates.
The row could help sway which political party leads Norway's next government as the Sept. 8 election race is tight.
Right-wing parties - the Conservatives, Progress Party, Liberals and Christian Democrats - are currently seen winning 85 seats - just one above the number needed to secure a majority in parliament, an average of all polls conducted in August compiled by pollofpolls.no showed.
Turning up the heat on the incumbent Labour party, the left-wing Socialist Left this week said it would only support a future Labour government if it divested from all companies involved in what it called "Israel's illegal warfare in Gaza".
Labour rejected the demand, but it may be difficult to reject such calls after the election.
WORST EVER CRISIS
"This is my worst ever crisis," fund CEO Nicolai Tangen told Swedish daily Dagens Industri on Friday.
"This is a serious situation because it is about trust in the fund."
In an interview with Reuters last week Tangen ruled out stepping down, saying he had carried out the fund's mandate, as decided by parliament.
Since June 30, the fund has divested from 23 Israeli companies following media reports it had built a stake in a jet engine company that provides maintenance for Israeli fighter jets.
During the war prior to that the fund had divested from just two Israeli companies.
It held stakes in 38 companies worth 19 billion crowns ($1.85 billion) as of Aug. 14, in sectors including banking, tech, consumer goods, and industrials, according to fund data.
More divestments are expected, Finance Minister Jens Stoltenberg said on Aug. 18.
Advocates of divesting from Israel say Norway is contributing to the violation of international law by investing in companies active in the occupied Palestinian territories.
They also argue the fund's formal divestment process which follows ethics guidelines set by parliament takes too long, while supporters say it is necessary to be fair.
Opponents of divesting, however, argue that formal process is necessary and that singling out a country might violate its ethical rules.
LOW PROFILE
The fund invests Norway's oil and gas revenue abroad so as not to overheat the domestic economy. Its $2 trillion size is equivalent to $355,000 for every Norwegian man, woman and child.
Its operations, and changes to them, generally keep a low profile, something it is currently struggling to do.
Traditionally, the four biggest parties in parliament try to work to agree changes to the fund via a "supermajority" to avoid changes every time there is a change of government.
"The fund is now invested in close to 9,000 companies globally ... the more visible this fund is out in the world, the higher the risk to its reputation," said Mahmoud Farahmand, a lawmaker from the opposition Conservatives who sits on the parliamentary finance committee that oversees it.
HOSTILE INTERPRETATION
While fund officials say they can navigate the current public challenges, they worry in private.
Reuters obtained the minutes from a Dec. 6 meeting under a freedom of information request that has not been reported previously.
They show fund operator Norges Bank Investment Management (NBIM), the Council on Ethics and the finance ministry debated how to balance ethical investment while avoiding it being misinterpreted as hostile government action.
The Council noted a "challenge with companies that have a dominating state owner and the risk of politicising the fund," the minutes showed.
"For these companies, the recommendations will be perceived more as direct criticism of the authorities. This is valid in Europe as well as in emerging markets."
The meeting's participants are named at the top of the documents while statements are attributed to one of the three organisations in attendance.
"Norges Bank pointed out ... that states that own companies, especially in authoritarian regimes, could be a challenge for the fund in the future".
The Council on Ethics and NBIM declined to comment. The finance ministry did not respond to a request for comment.
PUBLIC SPAT
In public, Finance Minister Stoltenberg has come under unusually harsh criticism from parliament's highest supervisory organ, the Standing Committee on Scrutiny and Constitutional Affairs, for his responses to its questions.
"The most arrogant response I have read in four years on the committee," its head, opposition lawmaker Peter Froelich, told public broadcaster NRK.
"Instead of answering factual questions, the finance minister provides a lengthy lecture on matters the committee is well aware of."
ETHICAL GUIDELINES
The fund follows ethical guidelines introduced in 2004 under Conservative finance minister Per-Kristian Foss and implemented by his left-wing successor, Kristin Halvorsen.
The guidelines stipulate, among other things, that the fund cannot invest in companies involved in serious violations of individuals' rights in war or conflict situations.
"Public support for saving money this particular way is dependent on the ethical guidelines being followed," Halvorsen told Reuters. "There would be less public support for it if people did not trust that the money is managed properly."
Conservative party leader Erna Solberg, who governed Norway between 2013 and 2021, said keeping the fund's investments politically impartial was a long-standing priority.
"Having this principle that investments are done without political influence has been important for us," she told a meeting with foreign correspondents on Aug. 6.
Finance Minister Stoltenberg this month told a town hall in the southern city of Arendal that the fund had always faced challenges.
"We will be confronted with challenges sometimes. We have been in the past, we are now and we will be in the future."
"We have managed, for 30 years, to do something that no other country has been even close to doing: take the revenues from our natural resources, save all the money, and ... only use the financial return."
(Reporting by Gwladys Fouché in Oslo and Arendal; editing by Jason Neely)
A sovereign wealth fund is a state-owned investment fund that manages a country's reserves, typically derived from surplus revenues, to achieve long-term financial goals.
Ethical guidelines in finance are principles that govern the conduct of financial institutions and investors, ensuring responsible investment practices and adherence to moral standards.
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