Background and Relevance of the Norwegian Government Pension Fund Global
The Norwegian Parliament has temporarily halted the recommendations from the Ethics Council to exclude companies from the Norwegian Government Pension Fund Global’s portfolio. This fund, managed by Norges Bank, is the world’s largest sovereign wealth fund with assets totaling approximately 210 billion Norwegian krone (€1.8 trillion).
Parliament’s Decision and Next Steps
The approved proposal calls for a comprehensive review of the investment vehicle’s governance framework, including observation and exclusion guidelines. This review aims to propose specific changes and improvements by spring 2026.
Minister Jens Stoltenberg’s Role and Perspective
Jens Stoltenberg, Norway’s Finance Minister and former NATO Secretary General, emphasized during the debate that current guidelines might lead to excluding major global companies like Microsoft, Alphabet, and Amazon. This could potentially increase risk or reduce expected returns.
Stoltenberg argued that this contradicts the fund’s intention to be a globally diversified portfolio. He stated, “The world has changed” since the ethical guidelines were adopted, necessitating a review not only to withdraw more swiftly from conflict zones but also to ensure the fund’s integrity.
Impact on Israeli Companies in the Fund’s Portfolio
Since late 2023, the number of Israeli companies in Norway’s sovereign fund portfolio has decreased from 76 to 33. Seven companies were excluded following the Ethics Council’s recommendations, while others were removed by Norges Bank under its responsible investment management.
In August, following the Ethics Council’s advice, Norges Bank’s executive board decided to exclude several Israeli companies and the US-based Caterpillar from its portfolio due to unacceptable risks of contributing to severe human rights violations in war and conflict situations. This decision raised concerns from the United States regarding the heavy machinery manufacturer.
Stoltenberg stressed that Norway’s government concern is to safeguard its interests, clarifying that these actions are not driven by pressure from other countries.
Key Questions and Answers
- What is the Norwegian Government Pension Fund Global? It’s the world’s largest sovereign wealth fund, managed by Norges Bank, with assets worth approximately €1.8 trillion.
- Why did the Norwegian Parliament suspend ethical divestment recommendations? The Parliament decided to temporarily halt these recommendations to review the investment vehicle’s governance framework, including observation and exclusion guidelines.
- Which companies have been excluded from the fund’s portfolio? Following the Ethics Council’s recommendations, several Israeli companies and Caterpillar (US) were removed due to unacceptable risks of contributing to severe human rights violations.
- What is Minister Jens Stoltenberg’s role in this decision? As Norway’s Finance Minister, Stoltenberg advocated for a review of the ethical guidelines to ensure the fund’s integrity and adapt to changes in the global landscape.
