Scandinavian countries are often held up as models for a better society. None more so than Norway, flush with North Sea oil wealth, which it can invest responsibly.
The money is put aside in a sovereign wealth fund, owned by the Norwegian government and managed by the country’s central bank, Norges Bank. It is the largest such fund in the world, worth £1.4 trillion.
Called the Government Pension Fund Global (GPFG), or just the Oil Fund, it is supposed to adhere to ethical guidelines by excluding certain companies from its portfolio.
That’s if they are involved in serious violations of human rights – especially in conflicts – gross corruption, the production of nuclear weapons and more.
However, in outright contradiction to these guidelines, the GPFG invests billions of pounds in many of the world’s largest arms companies. In fact, it owns stakes in exactly half of the world’s top 100 arms companies, accumulating at almost £14 billion.
This includes arms companies here in the UK that supply Israel – despite Norway recognising the state of Palestine as recently as May 2024 and excluding companies from the GPFG involved in activities violating international law.
So why is Norwegian money finding its way into Britain’s arms industry, which supplies Israel?
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Arming Israel
Among these investments is QinetiQ in which the GPFG holds over £46 million in shares.
The British defence tech firm has collaborated with the Israeli military to develop the Watchkeeper drone system, a joint project with Israel’s Elbit Systems, a company dropped from the fund in 2009 for supplying surveillance systems for the separation barrier in the West Bank.
Following sustained direct action from Palestine Action, Elbit Systems UK lost its largest-ever British arms contract, worth over £2.1bn, after the UK Ministry of Defence scrapped its Watchkeeper drone programme.
QinetiQ subsidiaries, such as QinetiQ Australia, are involved in the F-35 fighter jet program. Israel has used its fleet of these aircraft to pound Gaza.
Then there is the almost £35m invested in Babcock International, another UK company in Norway’s portfolio. It claims to not provide weapons to Israel, but with partnerships involving Israeli defence firms IAI, Elbit, and Rafael Systems, the line between ‘not involved’ and ‘indirectly arming’ becomes quite blurry.
Babcock also sustains the entirety of the UK’s submarine fleet, including by delivering through-life support and life extension of the UK nuclear armed Vanguard class submarine.
Rolls-Royce and Leonardo
Norway’s largest UK arms investment, however, is in British engineering giant Rolls-Royce, where the fund holds around £1.07bn in shares, representing over 2% of the company.
Rolls-Royce is not just about luxury cars, it is a critical supplier on the F-35 program, powering Israeli military operations. Case in point: Rolls-Royce’s German subsidiary, MTU, produces the engines for Israel’s Merkava tanks and most of the Israeli Navy’s vessels.
Divesting from the UK defence sector is far from unlikely, as the Oil Fund previously decided to exclude BAE Systems, the UK’s largest arms company, from its portfolio in 2018 for its involvement in nuclear weapons production.
However, few investments in Norway’s portfolio illustrate its ethical blind spots as starkly as its stake in Anglo-Italian arms manufacturer Leonardo. Leonardo’s presence in the UK comes largely from its ownership of Leonardo UK, formerly AugustaWestland.
Leonardo operates from several locations in the UK, and has deep collaborations with the UK MOD, BAE Systems, Rolls-Royce and MBDA UK, especially with reference to its joint venture program, the Tempest new-generation fighter jet, expected to enter service in 2035.
With around £165m invested; the company has become a focal point for divestment campaigns – and for good reason.
Leonardo supplies weapons to Israel, including naval guns for Sa’ar 6 warships used in the bombardment and siege on Gaza, and it is a key player in the F-35 program.
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Ignorance or hypocrisy?
Despite a history of corruption – linked to bribery scandals in Indonesia and India – Leonardo remains on the GPFG portfolio, even managing to convince the Council of Ethics (the body tasked with reviewing investments) “that the risk of gross corruption in the company’s operations no longer is unacceptable” as they occupied an observation list for five years until being revoked from assessment in 2022.
The company has recently been accused of providing the military junta in Myanmar with weapons in violation of a UN arms embargo. The company also contributes to nuclear weapons production through MBDA, a joint venture with BAE Systems and Airbus SE. Leonardo’s role in Israel’s military operations and its corruption scandals demand urgent re-evaluation by the Council on Ethics.
The fund clearly channels billions of pounds into corporations that fuel violence, sustain occupations, and profit from human suffering. These aren’t just financial decisions; they’re moral failings, directly contradicting the fund’s stated ethical guidelines.
How does Norway square these investments with its loud-and-proud commitment to peace and human rights? Is this ignorance or hypocrisy? Norway must divest from UK arms companies, sending a powerful message: that peace and human rights are not negotiable, and profit should never come at the expense of human lives.
To see the full list of investments in the world’s top 100 arms companies click here.
Part of a more detailed blog published by Corruption Tracker
