A major shift is brewing in global investing.
Norway’s sovereign wealth fund — the world’s largest (US$2.1T) — may soon lift its long-standing ban on defence companies, signalling a dramatic rethink as geopolitical risks escalate.
🔹 Why now?
• The Ukraine war
• U.S. uncertainty over Europe’s defence commitments
• Defence spending surging across NATO
• Hard questions around ESG vs national security
Former fund CEO Knut Kjaer captured the mood bluntly:
👉 “Freedom is more important than ESG.”
🔹 What changes?
If guidelines are revised in 2027, the fund could invest in 14 major defence firms worth ~US$1 trillion, including:
Lockheed Martin, Boeing, Airbus, BAE Systems, Thales, Northrop Grumman, General Dynamics…
These firms were previously excluded due to nuclear-weapons involvement.
🔹 The ethical dilemma
Norway already buys jets, frigates and systems from these companies — but hasn’t allowed its fund to earn returns from them.
Many policymakers now argue the old rules no longer reflect today’s security landscape.
🔹 A move with global impact
When Norway changes course, ESG-focused investors worldwide often follow (as seen with coal divestment in 2016).
A shift toward defence exposure could spark a broader institutional reallocation into the sector.
🔹 But not everyone agrees
Critics warn that investing in companies tied to nuclear capabilities contradicts the fund’s mission of safeguarding future generations.
Parliament will receive recommendations in October 2026, with a final vote set for June 2027.
📌 Takeaway:
Geopolitics is reshaping investment rules. Defence is no longer a taboo sector — it’s becoming a strategic asset class.