Oil has made Norway extremely rich. We have the world’s largest sovereign wealth fund, which was established with petroleum revenues in 1990. Headed by the wealthy banker and art investor Nicolai Tangen, the Government Pension Fund Global (GPFG), has a current value of more than 20 239bn Norwegian kroner (£1.4tr). With holdings in about 8,500 companies in 69 different countries, it is the largest single investor in the world.
Norway also purports to have a human-rights-based foreign policy, and the sovereign wealth fund is supposed to adhere to a set of ethical guidelines. Companies may be excluded if there is a risk that they contribute to or are responsible for serious human rights violations, or are involved in the sale of weapons to states that violate international law in armed conflicts. A Council on Ethics makes recommendations about exclusions from the GPFG’s investment portfolio, but only after the fact.
Since 2024, the government has repeatedly cautioned Norwegian business not to invest in companies that support Israeli occupation policies or human rights violations. But it seems to have had few problems with the fact that the sovereign wealth fund has investments totalling 22.7bn Norwegian kroner (£1.6bn) in 65 Israeli companies.
Since the Hamas atrocities of 7 October 2023 and Israel’s subsequent retaliation in Gaza, the oil fund has actually increased its investments in Israel by 66%. These are managed by three Israeli investment companies, one of which has clear links to Israeli cabinet ministers.
In April this year, the UN’s special rapporteur Francesca Albanese warned that Norway’s sovereign wealth fund had investments in Israeli arms companies and was a “major European source of investment for Israel’s ongoing occupation”. She warned of the risks of complicity with violations of international law. The Norwegian minister of finance, Jens Stoltenberg (a former Nato secretary general), rebuffed Albanese, but many Norwegian NGOs stepped up the pressure.
In June, a 118-page report from Historians for Palestine – based on research that could easily have been done by the oil fund’s ethics council – revealed Norwegian state investments in Israeli companies believed to be involved in the genocide in Gaza. The report was sent to the Ministry of Finance but gained little traction. Then, as Norwegians began taking their summer holidays, another news site documented investments by the wealth fund in Israeli companies, including Bet Shemesh Engines, which provides maintenance and supplies parts for the Israeli air force’s F-15, F-16 and Apache helicopters, which have terrorised Gaza’s civilian population; and Next Vision Stabilized Systems, which produces cameras for drones used by the Israeli army in Gaza.
A none too subtle clue about Bet Shemesh’s activities may be gathered from the company’s own website, which declares that it is “particularly proud to support IAF’s frontline fighter aircraft and helicopters”. At a time when the number of Palestinians killed by the IDF had already exceeded 20,000, and legal scholars increasingly began referring to Israel’s war on Gaza as a genocide, the GFPF increased its shares in Bet Shemesh, whose share market value had skyrocketed.
Opposition parties on the left in Norway have long demanded that the oil fund’s investments in Israel should be pulled completely. But as recently as June, a parliamentary majority voted down that proposal. One of the stock responses to critics of investing in Israeli companies is that there should not be any “political interference” with investment decisions. Yet four days after the Russian invasion of Ukraine in 2022, the Ministry of Finance instructed that the GPFG divest from Russia.
It was not until the liberal-conservative Norwegian newspaper Aftenposten this month published the news of the GPFG’s investments in Bet Shemesh that this turned into a full-blown political scandal. Stoltenberg at that point demanded a full review of the fund’s investments in Israeli companies.
The government has now announced that the GPFG will divest from 17 Israeli companies, including Bet Shemesh Engines, and that the fund’s Israel investments will no longer be managed by Israeli investment companies. The prime minister, Jonas Gahr Støre, has however ruled out the total divestment from Israel that opposition parties on the left have called for.
But media disclosures about the GPFG’s investments keep coming. The latest relate to fund stakes in two Israeli banks whose loans have played a key role in Elbit, Israel’s largest private arms manufacturer. Elbit was the first Israeli company the GPFG divested from, in 2009, citing its involvement in violations of international law.
“Nordic exceptionalism” comes naturally to Norwegians: we like to think of ourselves as a beacon in a dark world, leading the way in Europe on ethics and virtue. Norway formally recognised the state of Palestine in 2024 (which the Israeli far-right government described as an act that rewarded terrorism). But the scandal over the sovereign wealth fund is testing both that self-image and the political consensus about our ethical and human-rights-based foreign policy.
Most Norwegians say they want our sovereign wealth fund’s investments out of Israel, surveys indicate. But with the country heading for a general election on 8 September, the issue of collectively profiting from investments in companies that supply the perpetrators of genocide in Gaza is converting a moral dilemma into a political turning point.
Voters face a choice between a centre-left government committed to building national wealth via investments in Israel; a rightwing party (and the main opposition) that wants to ignore the ongoing genocide in Gaza and increase trade with Israel; and the leftwing calling for total divestment from Israel. So far, polls indicate that foreign policy is higher up the agenda for voters than ever before. If this is accurate, the governing Labour party may be severely punished for its stance. This could open the door to a government which would be even worse on the issue of Palestine.
But if an ethical foreign policy means anything, then Gaza must be a defining issue for Norway, a mirror for Norwegians too.
Sindre Bangstad is research professor at KIFO, Institute for Church, Religion and Worldview Research in Oslo
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