Government Pension Fund Global, Oslo, may have to shed some weapons suppliers from its portfolio following a decision by the Norwegian parliament to exclude weapons used in armed conflict from the sovereign wealth fund.
The Storting, Norway's parliament, voted Wednesday in favor of a proposal to add new criterion to the fund's policy following endorsement in April by the Ministry of Finance. The proposal was aimed at breaking any links the fund may have to companies that sell weapons to parties that use them to violate humanitarian law.
The new criterion states that companies operating in conflict zones as well as firms that sell weapons to countries where these weapons are used in violation of humanitarian law should be excluded.
The council of ethics, which advises wealth fund executives on whether investments are in line with its ethical guidelines, will at a later point recommend any observation or exclusion of companies to the sovereign wealth fund's in-house manager, Norges Bank Investment Management.
According to current guidelines, the 11.3 trillion Norwegian kroner ($1.35 trillion) sovereign wealth fund must not invest in companies that sell weapons or military material to states that are subject to investment restrictions, as well as companies that engage in systematic human rights violations or contribute to serious violations of the rights of individuals in conflicts.
A spokeswoman for GPFG did not provide details on the value of the portfolio that may be affected by any enforced change or when any divestment would take place. A spokesman at the Ministry of Finance could not be reached.