Norway's wealth fund ethics chief warns he will quit over curbs on his council

what happened

Svein Richard Brandtzaeg, who leads the independent ethics council of Norway's sovereign wealth fund, said on Wednesday that he would resign if a recent government proposal to limit the watchdog's powers is adopted. He set out his position in a newspaper column, as reported by Reuters.

The fund, worth $2.3 trillion, is the world's largest investor and holds about 1.5% of all listed shares through stakes in more than 7,000 companies. The council, which operates under Norges Bank, currently advises the central bank's board on which firms should be excluded from the portfolio on ethical grounds.

A commission appointed by the government proposed this month that the council stop recommending actions and only analyze ethical violations by companies. Brandtzaeg warned that this would turn the fund's ethics flagship into a "toothless internal advisory group".

why it matters

The commission's chair said on October 15 that the fund's size has raised its profile abroad amid a more fragmented geopolitical landscape, making it more exposed to threats. For markets, the dispute matters mainly as a signal, since the fund's exclusion decisions touch a large share of global equity holdings.

market impact

Global equities: a dispute over the largest fund's powers could affect which companies it excludes from its portfolio.

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