The Government Pension Fund of Norway, valued at $1.8 trillion, owns approximately 1.5% of all globally listed shares across 8,700 companies. Operating under ethical guidelines established by the Norwegian parliament, the fund’s Council on Ethics is responsible for monitoring investments to ensure they meet specific ethical standards.

In a document submitted to the finance ministry on October 10, the Council on Ethics stated its intention to “take a closer look at companies involved in cryptocurrencies and gambling/casino, where there is a significant risk of money laundering” in 2025.

The fund holds significant stakes in major cryptocurrency and gambling companies. It owns a 0.83% share in Coinbase Global Inc., a leading cryptocurrency exchange valued at about $453 million. Additionally, it has investments in gambling firms such as Flutter Entertainment Plc, with a 2.13% stake worth approximately $691 million, and MGM Resorts International, holding 0.87%, valued at around $121 million.

Industries like cryptocurrency and gambling are often under scrutiny due to their susceptibility to money laundering activities. The large volumes of cash and digital assets flowing through these sectors, coupled with the decentralized nature of cryptocurrencies, make them attractive for illicit financial activities.

Globally, regulatory bodies have identified these industries as high-risk for money laundering. Countries like Australia and Malta have pointed out that cryptocurrencies and gambling are commonly used methods by criminals to launder money. The United Nations Office on Drugs and Crime has also expressed concerns, particularly in Southeast Asia, about the role of online gambling platforms and crypto exchanges in facilitating illegal financial transactions.

Jeremy Douglas, Regional Representative for Southeast Asia and the Pacific at the UNODC, commented that the rise of underregulated online gambling and crypto platforms has significantly impacted the landscape of money laundering.

In Norway, cryptocurrency adoption is notable, with data from Ernst & Young indicating that 14% of Norwegian men own crypto assets. The country is considered one of the most crypto-friendly nations, alongside Germany and France, according to analysis firm Coincub. Despite this, Norwegian regulators have expressed concerns about the environmental impact of crypto mining and its compatibility with the nation’s sustainability goals.

The Council on Ethics is tasked with evaluating companies in which the fund invests to ensure compliance with ethical standards related to human rights, environmental protection, anti-corruption measures, and other criteria. If companies are found to violate these standards, the council can recommend that the fund be divested from them or place them on a public watch list.

Currently, the fund excludes 189 companies on ethical grounds, including major firms like Airbus SE and Boeing Co. for involvement in nuclear weapons production and Glencore Plc and RWE AG for activities related to coal.

In addition to crypto and gambling firms, the council plans to investigate working conditions at numerous shoe manufacturers in 2025, though specific companies were not named. The fund holds stakes in leading footwear companies such as Nike Inc., Adidas AG, and Puma SE. Issues in the footwear industry have historically included long working hours, low wages, and restrictions on workers’ rights to form unions.

Adidas reported that over the past 25 years, it has implemented various measures to ensure fair and safe working conditions, including conducting extensive factory audits. Puma stated that all suppliers are required to adhere to a legally binding code of conduct and actively investigate any reported violations.

The Council on Ethics submits its recommendations to the board of the central bank, which manages the fund. While the bank often acts on the council’s advice to exclude firms, it may also choose to engage directly with companies or issue warnings for behavioral changes.

Companies slated for divestment are not publicly named until the fund has completed the sale of its shares to prevent market disruptions. The duration of the divestment process can vary from weeks to months, depending on the size of the holdings.