Norway’s sovereign wealth fund, managed by Norges Bank Investment Management (NBIM), is divesting from U.S. machinery manufacturer Caterpillar and five Israeli banks. The decision stems from an “unacceptable risk” that these companies contribute to serious rights violations in conflict zones. NBIM manages the fund, valued at around $2 trillion, on behalf of the Norwegian people. It aims to generate the highest possible net returns while adhering to ethical guidelines.
The fund’s ethics council found that Caterpillar bulldozers were being used by Israeli authorities in the “widespread unlawful destruction of Palestinian property.” NBIM held a $2.4 billion stake in Caterpillar at the end of 2024. The council also determined that the Israeli banks – First International Bank of Israel, FIBI Holdings, Bank Leumi Le Israel BM, Mizrahi Tefahot Bank, and Bank Hapoalim BM – provided financial services for construction in Israeli settlements in the West Bank, deemed a violation of international law.
NBIM has faced growing political and public pressure to divest from companies linked to conflict in Palestinian territories. The fund recently announced it would review its investments in Israeli companies and sell holdings outside its benchmark index. Despite these divestments, NBIM Deputy CEO Trond Grande affirmed the fund would remain invested in Israel via the benchmark index, emphasising the importance of ethical investing and adherence to established guidelines.
Analysts note that NBIM’s decision underscores the intersection of business and human rights. Historical data suggests that ethical screens have had minimal impact on the fund’s long-term returns. The move signals a universal application of its mandate, regardless of the company’s location or industry.
