The committee, led by former central bank governor Svein Gjedrem, released its report on Thursday. It said the fund, which controls assets of nearly $2.3 trillion and is the world's largest sovereign wealth fund, should be given greater freedom on ethical risks, with its manager, the central bank, given more discretion.
The report submitted to the Ministry of Finance argued that decisions about "another state's conduct" should not be made by the fund but "reserved for the ordinary diplomatic channels of the Norwegian authorities". This was a direct reference to the controversy over the fund's disinvestment last year from Caterpillar, which the fund said was prompted by the company's alleged involvement in rights violations committed by Israel in Gaza and the occupied West Bank. Washington has since pressured Oslo over the move.
The committee also unanimously recommended easing the fund's exclusion of companies involved in producing nuclear weapons. Citing Norway's reliance on NATO's nuclear deterrent and a worsening security environment, it suggested allowing investments in nuclear weapons producers based in the United States, the United Kingdom and France.
The proposals would also reshape the role of the fund's independent ethics watchdog, allowing some investment assessments to remain confidential.
The recommendations have already drawn criticism in Norway, with opposition politicians condemning the potential changes. Lawrence Loh, director of the Centre for Governance and Sustainability at the National University of Singapore Business School, said the fund is "often considered a global gold standard". He added: "If the Norwegian sovereign wealth fund changes its posture towards nuclear weapons, it will open Pandora's box for many global investors to follow suit."