Norway's Sovereign Wealth Fund suspends "ethical divestments," saving US tech giants from massive sell-offs.

The Norwegian parliament voted to temporarily suspend the "ethical" divestment of its $2.1 trillion sovereign wealth fund, while also starting to revise related rules. This move marks a historic moment for the world's largest investor and has raised fundamental questions about its practices in ESG. The Norwegian Labor Party government was able to pass this measure only through the support of the conservative opposition. The measure will allow the fund to continue holding shares in Microsoft Corporation (MSFT.US), Amazon.com, Inc. (AMZN.US), and other tech giants. Under current regulations, the fund may have to divest if these companies are associated with Israel in the Gaza Strip. This is the first time since the establishment of the wealth fund that the work of the Ethical Council has been suspended. With these guidelines temporarily shelved, Norway has opened a new era for this investor, which holds shares in over 8,500 companies worldwide, and the actions of this investment institution are closely monitored by global fund managers. One of the five members of the Ethical Council, Cecilie Hellestveit, stated that it is not yet clear what role the advisory body will play, which is a question that needs to be clarified. She said, "If we pause our daily work, it will undoubtedly have an impact. But it is not yet clear the extent and specific type of this impact." Recent decisions made by the wealth fund based on the guidance of the Ethical Council have sparked dissatisfaction in the United States. In August, the fund excluded Caterpillar Inc. (CAT.US) from its portfolio because the company supplied bulldozers to Israel, which were later used in the Palestinian territories. Leading figures of the US Republican Party quickly responded, demanding retaliatory measures against the fund's executives with visa restrictions. They also called for punitive tariffs on Norway, in addition to the 15% tariffs already implemented by the Trump administration. Norwegian Socialist Left Party legislator Ingrid Fiskaa stated that Norwegian lawmakers who supported the suspension of the Ethical Council's work did so undoubtedly out of concern for potential reactions from Trump. Norges Bank Investment Management, responsible for managing the fund, operates according to instructions set by the Norwegian parliament and follows relevant guidelines on ethical norms regarding various issues from war to climate change. The Ethical Council continues to evaluate the investment portfolio and make recommendations to exclude or observe certain companies. On Tuesday, the Norwegian parliament voted to suspend the council's work and agreed to re-examine the fund's responsibilities after intense debates on the role of the investment tool. The fund's assets had been growing steadily in recent times, sparking much discussion. The measure, led by the Labor Party alone and later supported by right-wing opposition, received the necessary approval for suspending the Ethical Council's work. Most of the Labor Party's traditional left-wing allies opposed this decision. Norwegian Minister of Finance Jens Stoltenberg (formerly Secretary General of NATO) had requested a review of the fund's operating guidelines last month. In an interview later on Tuesday, he stated that even though the council's work had been suspended, "ethical considerations will still apply to" the fund's investment decisions. In July, UN Special Rapporteur Francesca Albanese released a report accusing US companies, including Alphabet (GOOGL.US), Amazon.com, Inc., Microsoft Corporation, and Palantir (PLTR.US), of participating in Israel's economy, citing charges of apartheid, war crimes, and genocide in Israel's treatment of the Palestinian territories and response to the Hamas attacks on October 7. After the report was released, the US imposed sanctions on Albanese.