In Oslo, where the world’s biggest sovereign wealth fund decides how to allocate $1.4-trillion (R20-trillion), a huge contradiction lurks.

The fund is trying to reconcile a sustainable-investing mantra with the billions it owns in companies that source cocoa from regions where children pick beans that feed the world’s craving for chocolate. So far, it has chosen to stay involved rather than sell so it can push for positive change.

“We expect companies to work against child labour, but at the same time we recognise that child labour in supply chains and agriculture has complex underlying causes,” said Line Aaltvedt, a spokesperson for the fund...