Norway’s $2 trillion sovereign wealth fund, the largest in the world, has divested from U.S. construction equipment giant Caterpillar and five major Israeli banks, citing concerns over human rights violations linked to the conflict in Gaza and the West Bank.
The fund, managed by Norway’s central bank, confirmed that the six companies were excluded due to what it called “an unacceptable risk” that their activities contributed to “serious violations of the rights of individuals in situations of war and conflict.”
According to fund records, Norway previously held a 1.17% stake in Caterpillar worth $2.1 billion as of June 30. Its combined holdings in the five Israeli banks—Hapoalim, Bank Leumi, Mizrahi Tefahot Bank, First International Bank of Israel, and FIBI Holdings—were valued at $661 million.
Caterpillar under scrutiny
The decision to exclude Caterpillar followed a recommendation from the fund’s Council on Ethics, an independent body tasked with assessing whether portfolio companies meet standards set by Norway’s parliament.
The council said Caterpillar’s bulldozers and other equipment were being used by Israeli authorities for “the widespread unlawful destruction of Palestinian property” in both Gaza and the West Bank. It warned that resumption of machinery deliveries to Israel meant “an unacceptable risk” that Caterpillar was facilitating “extensive and systematic violations of international humanitarian law.”
The council added that Caterpillar had not taken steps to prevent such use of its equipment.
Israeli banks and settlement financing
The exclusion of the Israeli banks stemmed from their financial involvement in settlements across the West Bank, including East Jerusalem. The ethics council noted that by providing loans and other financial services to settlement construction projects, the banks had “contributed to the maintenance of Israeli settlements.”
Israeli settlements are considered illegal under international law. The United Nations’ International Court of Justice ruled last year that construction on land seized during the 1967 war violated international agreements. Israel rejected the ruling, citing historical and religious ties to the territory.
Currently, around 700,000 Israeli settlers live among 2.7 million Palestinians in the West Bank and East Jerusalem. Settlement expansion remains one of the most contentious issues in the decades-long conflict.
Wider impact
The Norwegian wealth fund, which invests in more than 8,400 companies worldwide, has long been regarded as a global benchmark for ethical investment. It makes decisions based on recommendations from the Council on Ethics, though final approval rests with the central bank’s board.
The announcement of the divestments was first made on August 18 as part of an ongoing ethics review, though the companies involved were not named until the sales were completed.
The move highlights growing international pressure on firms with links to disputed territories and conflict zones, and underscores Norway’s willingness to use its investment power to influence global corporate practices.
