A committee set up by the government spent months last year drafting a set of rules to try to ensure "moral" investment of petrodollars. Parliament held heated debates about whether Norway should bar the Petroleum Fund from holding shares in tobacco companies. It finally decided against such a ban, noting that one-third of Norwegians smoke.

For many years, Norwegian politicians and finance officials resisted asking the fund to adopt a moral agenda, says Pia Gaarder, editor of Norwatch, a journal that campaigns for moral corporate behavior. They worried such a request might disrupt the fund's main goal: making enough money for the government to cover future obligations.

In November 2004, the government adopted the new rules, which bar investments "which constitute an unacceptable risk that the Fund may contribute to unethical acts or omissions." At the same time, the government set up an Advisory Council on Ethics to weed out offending
companies, and ordered the fund to use its shareholder rights to promote corporate governance standards set out by the United Nations and Paris-based Organization for Economic Cooperation and Development.

Mr. Syse has the difficult task of trying to change the behavior of companies before the fund has to decide whether to divest. His leverage is the fund's rights as a shareholder in 3,200 companies. But his power is limited by the fund's relatively small holdings in each of the companies. Moreover, he says, "if we just rant in public we will be excluded as Scandinavian moralists."

He says he has been communicating with other investors to try to press ethical issues ranging from executive pay to pollution to labor issues. After three months on the job, he hasn't chalked up any victories yet, but he says the fund has made progress formulating "our principled stand."