The Indicator from Planet Money - Inside Norway's sovereign wealth fund dilemma to divest from Israel

Episode Date: October 6, 2026

Norway has the world’s largest sovereign wealth fund, but it’s facing a self-imposed dilemma. Should the fund's investments include companies that directly or indirectly contribute to the ongoing Israel-Hamas war? On today’s show, the ethical tightrope Norway is walking to invest its oil riches responsibly. Fact checking by Sierra Juarez.Your Next Listen —How would a US sovereign wealth fund even work? Connect with The Indicator — Sign up for The Indicator’s weekly newsletter! — Buy the Planet Money book — Find our socials, YouTube and more! — For sponsor-free episodes, subscribe to NPR+ Support public media with NPR+ and enjoy perks for over 25 podcasts like this one. This show’s perks include sponsor-free listening. Learn more at plus.npr.org. See pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

NPR. Norway, it's one of the happiest countries in the world. Maybe because it's also one of the wealthiest. Can't hurt. It's a top producer of oil and gas. And since the 1990s, Norway's government has reinvested its oil money in a sovereign wealth fund. Ooh, buzzwords. Love a buzzword.

As indicator listeners know, sovereign wealth funds are so hot right now. And Norway has the largest one in the world. It's currently worth around 2.3. trillion dollars. But with more money, come mo problems. For the past year, Norway's fund has been facing a public global crisis over its investments in Israel and its own ethical rules. That's become a third rail for a lot of people these days. Most companies and investors don't want to talk politics of any kind right now. But the Israeli-Hamas war and the resulting humanitarian crisis in Gaza is especially fraught. Edda Voldenbaka, the head of Norway's

Central Bank, in February acknowledged that the war has created what she calls dilemmas about responsible investment. And she's not the only one struggling with this. Just ask Ed Sheeran. I don't think you want any more questions about that topic. This is the indicator from Planet Money. I'm Waylon Wong. And back with me is friend of the show, Maria Aspen.

Hey, Maria. Hey there, Wailen. Today on the show, how the world's largest science. Sovereign Wealth Fund is struggling with the ethics of investing in Israel. Sovereign wealth funds are basically a government's way of investing a country's riches. Most of the countries with big funds have a lot of oil money, like Abu Dhabi and Kuwait. So they reinvest that money to help fund the government and have lower taxes. And sometimes they get creative.

Remember Saudi Arabia's attempts to create a new international golf league? Maybe that's part of why President Trump wants to start a U.S. sovereign wealth fund. He does like to golf. Oh, I did an episode on it. But Norway's been doing this for decades. And today, its sovereign wealth fund makes up almost 20% of the government's annual budget. And it's a hugely powerful investor outside of Norway. The fund now owns a small percentage of about 7,000 companies.

That includes pretty much every big stock you've ever heard of. Invidia, Apple, Amazon, Google, J.P. Morgan Chase, etc., etc., etc. That gives Norway some serious power in corporate America. The fund's CEO, Nikolai Tangan, can even get CEOs like Dario Amadeh and Elon Musk to appear on his own business podcast. Hey, competition for us? Some Norwegian competition. But despite its power, Norway's sovereign wealth fund usually tries to be pretty boring, or what investors call passive. It mostly invests in stocks and bonds tracking the broader market, like,

a global index fund. And you won't find any big golf leagues or other boondoggles here. Norway's fund isn't even allowed to invest in more mainstream alternative investments like private equity. And only a very small percentage of its money goes to active managers making judgment calls. But the active choices can still cause big problems. They're extremely passive. It's really a passive fund. But the discussion is always around the active choices. Last week, I hopped on an international Zoom with Karin Thorburn. She's a finance professor at the NHH Norwegian School of Economics, and she's also served on government committees about the sovereign wealth fund's investing strategy. If you look at research, the best way to achieve the highest possible

risk-adjusted, expected return on a portfolio is to include all stocks. All stocks. But here's the problem. Norway can't do that. Unlike most sovereign wealth, funds, Norway follows the guidance of an independent ethics committee, which tells it not to invest in some companies. We're talking tobacco companies like Philip Morris, coal miners, nuclear weapons companies, and even big defense contractors like Boeing and Lockheed Martin. Seems like there were always some inherent ethical contradictions in this model for an oil fund.

Right. Making money from oil, that's fine. But investing in coal, oh no. And we saw this during the heyday of ESG, when invests. investing for environmental, social, or governance reasons was popular. Ethical investing is always a tricky balance. But it got a lot more complicated for Norway after Hamas attacked Israel and Israel declared war. Last August, Norway's funds said it would divest from some but not all of its Israeli stocks at the recommendation of its ethics committee. It also said it would divest from the U.S. company Caterpillar, because the Israeli government was using Caterpillar bulldozers to destroy Palestinian. Dinoe homes in Gaza. This started a crisis for Norway, became a big issue in last year's elections, with some Norwegians saying the fund wasn't divesting enough from Israel. But the Caterpillar

decision also created a big foreign policy mess for Norway in the United States. The White House and the late Senator Lindsey Graham publicly criticized Norway and threatened retaliation. Because look, when a foreign government's fund decides to divest from a U.S. company, that looks like foreign policy more than internal ethics. As our Norwegian finance expert, Karin points out, this decision also opened the door to questions about what other big companies are involved with the war in Gaza and whether Norway should divest from all of them.

It's a very fine line to decide which companies assist in the war. You could say that Apple is useful because soldiers may communicate by cell phone, that all kinds of car producers contribute because the military drives their cars. And then the question is, where do you set that limit? These are existential questions for a big investor that's supposed to largely follow the market, especially when the market is powered by the biggest tech companies like Microsoft and Amazon and Alphabet. A lot of them also do business with the Israeli government.

Norway's influential minister of finance, Jan Stoltenberg, has the last word on a lot of what the fund does. In a recent conversation with fund CEO Nikolai Tangan on Tengen's podcast, the minister talked about the Israel dilemma when it comes to investing in big tech. If we cannot be invested in the big tech companies, which deliver, of course, different services to many defense companies, then we cannot be a broad-based sovereign wealth fund anymore. This all came to ahead in November,

when Norway's parliament voted to suspend part of the ethical guidelines governing the fund. Yan Stoltenberg told the Financial Times the suspension would help the fund avoid having to sell out of big tech companies. Since then, the government has been reviewing the fund's ethics guidelines. It's due to deliver a report by next week. The fund and Norway's Ministry of Finance both declined to comment. But Karin points out that the ministry doesn't have to follow whatever the report recommends about the ethics committee. And she says there's a lot of political and financial reasons for the fund to stick to its passive of investing roots. Norway is really trying to avoid creating political conflicts with the fund.

It's hard to be rich actually in the world and you need to tread carefully. With great riches come great responsibility. It must be a nice problem to have. Maria, great to have you with us. We'll see you on the next episode. This episode was produced by Julia Ritchie and engineered by Travis Hagan. It was fact-checked by Sierra Juarez. Kaking Canon is our show's editor and the indicator is a production of NPR.