Norway's sovereign wealth fund (the Oil Fund) the world's largest with assets of more than $2.2 trillion, may once again be allowed to invest in firms that make nuclear weapons under a proposal made on Thursday.
Under its current ethical guidelines, the fund excludes 14 companies because they develop or make nuclear weapons or their components, including industry giants Airbus, BAE Systems, Boeing, Lockheed Martin and Safran.
The Norwegian government ordered a review of the guidelines following criticism over its investments in groups accused of playing a role in the war in Gaza.
A commission established for that purpose, chaired by former central bank governor Svein Gjedrem, unveiled its recommendations on Thursday.
The fund could invest only in nuclear arms makers "based in a nuclear-weapon state as defined in the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and allied with Norway", the report said.
"This means that several British, French and American arms manufacturers will be brought back into the fund," Gjedrem said as he presented the 434-page document.
Other ethical exclusion criteria - such as the manufacture of biological and chemical arms, landmines and cluster bombs, as well as coal extraction and the production of tobacco or cannabis - would remain unchanged, the commission said.
The report was submitted to Finance Minister Jens Stoltenberg, a former NATO secretary general.
Stoltenberg noted "the paradox" regarding nuclear weapons manufacturers whereby "the Norwegian fund cannot invest in companies that could be crucial for Norway's security", at a time when Russia is increasingly threatening to use nuclear weapons and China is boosting its own arsenal.
The commission also recommended changes to the Ethics Council, an independent body responsible for making recommendations to Norway's central bank, which manages the fund.
The council would remain responsible for assessing the risk that companies could seriously violate the fund's ethical standards, but it would lose the possibility to directly recommend excluding them from the portfolio, a right already suspended pending review.
The report's recommendations must be submitted to a broad consultation before the government presents its conclusions to parliament for a vote next spring.
Some political parties, particularly those on the left, have already criticised the report, with one Green official calling it "utterly senseless".
The fund is invested in more than 7,000 companies spanning the globe, and in aggregate owns around 1.5 percent of all listed companies worldwide, making it the world's largest single investor.