Norway freezes ethics rules to back tech companies with Israeli ties

Jens Stolenberg has said Norway would look at whether the nation’s sovereign wealth fund should be able to invest in more defence companies - Christopher Neundorf/EPA/Shutterstock

Norway’s has frozen the ethical investing rules for its $2.1tn (£1.6tn) sovereign wealth fund so it can continue investing in big tech companies with ties to the Israeli government.

Jens Stoltenberg, the nation’s finance minister, said there was a risk that its ethics council could have called for it to “withdraw from some of the largest companies in the world”, including Amazon, Microsoft and Google, which would “undermine” the fund.

The sovereign fund, which manages the country’s vast oil wealth, had previously divested from 11 Israeli companies on ethical grounds.

It also sold out of US business Caterpillar in August after its bulldozers were allegedly used by the Israeli military to demolish buildings in Gaza, a move that triggered tensions with Washington.

Mr Stoltenberg told the Financial Times that Norway’s government had now put the work of the fund’s ethics council on hold over fears it could lead to more widespread divestment of US businesses.

He said the council had been planning to look at the fund’s stakes in Amazon, Microsoft and Alphabet, the parent company of Google, over their work for the Israeli government.

The three businesses are collectively worth almost $10tn, and excluding them would have created questions over the oil fund’s status as an index fund and threatened the fund’s ability to bankroll Norway’s welfare state, Mr Stoltenberg added.

He said: “It is obvious that there is a possibility that the existing framework can lead to a decision by an independent body to withdraw from some of the largest companies in the world. That would undermine the purpose of the fund to be a broad, diversified global investment fund.”

Amazon, Microsoft and Google have all provided Israel with widespread access to their cloud, data and artificial intelligence (AI) tools.

‘Ethical guidelines’

In September, Microsoft announced it had cut off access to an espionage unit in the Israel’s military over reports it was using the company’s Azure cloud software for mass surveillance of Palestinians – a first for a major technology provider. Microsoft has said that such use is against its terms of service.

Mr Stolenberg, the former head of Nato, also said Norway would look at whether the fund should be able to invest in more defence companies.

It has previously been prohibited from backing defence primes such as Boeing, Airbus, BAE Systems and Lockheed Martin, which make parts for nuclear weapons.

“The time has come to go through these ethical guidelines,” Mr Stolenberg said.

He added: “We face serious dilemmas, being one of the biggest sovereign wealth funds in the world. There are no easy answers to these questions. But we need to handle them better than we have done so far in the ethical guidelines.”

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